Anthem BC /BS has provided ObamaCare supporters with a talking point: profit-mongering health insurance companies are arbitrarily jacking up premiums to unprecedented and unconscionable levels. ObamaCare will put a stop to that pronto.
Further the President said that insurance execs can’t come up with any reasonable explanation for the rate changes.
Well, Anthem has penned a letter to Sec. Sebelius explaining the rate changes (link to letter is below)
While the letter is a bit long-winded, here are the key points … which, incidentally, make sense to me.
- In 2009, Anthem’s average premium increase was 2%.
- But the average claims per member — the underlying cost of serving subscribers — increased by 8% in 2009.
- So, Anthem’s individual health insurance business in California lost money in 2009.
- An independent actuarial firm concluded that Anthem’s proposed 2010 rates were actuarially sound, reflecting the expected medical costs associated with the membership in these plans.
- Anthem’s proposed 2010 rates satisfy or exceed the medical loss ratio required by California law i.e. the underlying medical costs are driving the rates
- The 39% increase reported in the media is an isolated case; some premiums went down by as much as 20%.
- After these premium changes are enacted, the average individual market premium in California will still be about 1/2 the average individual market premium in New York.
Full letter:
http://www.wellpoint.com/pdf/SebeliusLetter02112010.pdf
Thanks to DNF for feeding the lead.
The Homa Files 
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