Anthem Increases Rates 25% As It Spends $12.9 Million With Parent Company WellPoint To Defeat California Ballot Initiative To Regulate Rate Hikes, says Consumer Watchdog Campaign

SANTA MONICA, Calif., Jan. 31, 2014 /PRNewswire-USNewswire/ -- Anthem Blue Cross and its parent company WellPoint have given $12.9 million to defeat a California ballot initiative that would require health insurance companies to get approval for rate hikes, like the increase of up to 25% Anthem proposes for over 306,000 Californians on April 1. If approved on this November's ballot, the measure will allow the state insurance commissioner to order refunds to consumers of excessive rate hikes that took place over the last year.

"Anthem is gambling that $12.9 million in political cash today will protect its ability to charge Californians many millions more in excessive premiums tomorrow. Voters can call Anthem's bluff and demand that California's health insurers publicly justify and get approval for rate hikes at the ballot this November," said Carmen Balber with Consumer Watchdog Campaign, the sponsors of the ballot measure. "Consumers will need more protection than ever from Anthem's unchecked premium hikes as the company positions itself as the dominant insurer on the state's new health insurance marketplace."

The California Public Interest Research Group examined Anthem's proposed April 1 rate hike and found the health insurance company had failed to justify why it is raising rates well in excess of medical inflation. Anthem Blue Cross has a history of unreasonable rate hikes in California, including: an unreasonable increase on 120,000 Californians with individual policies in 2011, an unreasonable rate increase on more than 250,000 small business customers in 2012, and multiple unreasonable increases on small business policyholders in 2013.

"I am shocked that Anthem is now raising my premium by another 25 percent.  They're spending millions on their campaign against the ballot measure to prevent rates from going up and now they're using their policyholders to pay for that. It's outrageous!  They have to be stopped.  Under this reform we can vote to prevent health insurers from raising rates to pay for lobbying or political expenditures," said Laurel Kaufer, a self-employed, single mom and Anthem policyholder.

The committee opposed to the measure, named "Californians Against Higher Health Care Costs," is funded exclusively by health insurance companies. Four other health insurers -- Blue Shield of California, Health Net, Kaiser, and UnitedHealthcare -- and their associations, have given an additional $958,672 to the committee.  

Unlike at least 35 other states, California's insurance commissioner does not have the power to reject a health insurance rate hike that is found to be excessive. California law, known as Proposition 103, already requires public justification and approval of auto, home and business insurance. The ballot initiative extends that law, which has saved drivers $102 billion according to the Consumer Federation of America, to health insurance.

The ballot measure would require health insurance companies to publicly justify rate hikes under penalty of perjury, prohibit excessive rate hikes, allow the public to challenge unjustified rate increases and require approval before a rate hike takes effect. Health insurance companies would be prohibited from passing on the cost of campaign contributions and lobbying to policyholders.

Health insurers' campaign contributions to oppose the rate justification ballot initiative as reported to the California Secretary of State:

Read more about the Health Insurance Public Justification and Accountability Act here: http://www.justifyrates.org

Consumer Watchdog Campaign is chaired by insurance reform Proposition 103 author Harvey Rosenfield. Consumer Watchdog Campaign is the campaign affiliate of Consumer Watchdog, which was founded by Rosenfield and whose president, Jamie Court, an award-winning consumer advocate and author, is the proponent of the ballot initiative.

SOURCE Consumer Watchdog Campaign