SANTA MONICA, Calif., Oct. 28, 2015 /PRNewswire-USNewswire/ -- Anthem's announcement of increased third quarter profits is the latest in a string of hefty health insurer profit reports that illustrate why consumers need protections against unreasonable and unjustified rate hikes, Consumer Watchdog said today. The advocacy group announced that it has endorsed legislation by Sen. Dianne Feinstein and Rep. Jan Schakowsky that would protect consumers from unreasonable rates.
S 2172, Protecting Consumers from Unreasonable Rates Act, which has a companion bill in the House, would give the Secretary of Health and Human Services the authority to modify or block premium insurance increases that are considered unreasonable in states where insurance regulators do not have the power to do so.
"Insurance companies answer to Wall Street, not consumers demanding quality healthcare at an affordable price. Lawmakers need to give regulators a shield to protect consumers, and we believe Sen. Feinstein's bill will do exactly that," said Edward Barrera, from Consumer Watchdog.
Anthem Blue Cross has repeatedly been criticized by state regulators for failing to justify rate increases on consumers. Unlike 35 other states, California regulators do not have the legal authority to reject excessive health insurance rate increases.
Since 2013, Anthem has imposed $145 million in rate hikes deemed by California regulators to be unjustified. In 2014, Anthem spent $18.7 million of the $56 million insurance companies kicked in to defeat Proposition 45, which would have regulated health insurance rates the way that auto, home and business rates are in California.
A recent national study found that those states with the authority to regulate health insurance rates had lower rate increases as compared to states like California that do not have the authority to regulate health insurance rates.
In the third quarter, Anthem posted a profit of $654.8 million, up from $630.9 million a year earlier. Anthem expects full-year revenue to be an estimated $78 billion. Anthem and others, including Kaiser Permanente, UnitedHealth Group, Health Net and Aetna, have posted sterling profits in the past few years as consumers are forced to buy health insurance or be penalized.
Consolidation will only exacerbate the situation, said Consumer Watchdog. In July, Anthem agreed to buy Cigna Corp. for $48 billion. If approved, the deal would combine the second- and fifth-largest health insurers. Aetna and Humana have also proposed a $37 billion merger.
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SOURCE Consumer Watchdog