Tuesday, March 09, 2010

Anthem also raises rates for Virginians

Several plans have gone up in cost, and drop-outs drive up premium costs for those who remain in.

Health insurance rates for individual plans offered by Anthem Blue Cross and Blue Shield of Virginia have increased as much as 20.5 percent within the past six months, with more increases planned for April.

As health insurance rate increases have surged around the country, President Obama and his administration have stepped up their criticism of the insurance industry. On Monday, Health and Human Services Secretary Kathleen Sebelius wrote a letter to health insurance executives asking them to publicly justify proposed premium increases that she called "jaw-dropping."

In particular Anthem's parent company, WellPoint, has been under scrutiny since raising premiums on some Californians 39 percent.

In Virginia, Anthem administers a dozen different individual plans that are medically underwritten. All but three were approved for a recent rate increase by the state bureau of insurance. That is according to bureau documents for Anthem rate increases that went into effect in October or January, or those scheduled to take effect in April.

In each case, Anthem justified the rate increase as necessary because of rising costs of health care.

In addition, Anthem spokesman Scott Golden said that increased use and an aging population are contributing to the need to raise prices.

"This is pointing to an underlying bigger problem, and that is the cost of health care and what we can do to control those costs," Golden said.

Anthem also administers guaranteed issue plans, where insurance must be provided regardless of pre-existing conditions. The guaranteed issue plans tend to have higher premiums and some have also undergone recent rate increases. Additionally, Anthem offers a short- term option with coverage for up to six months, for which rates were not recently raised.

As of Oct. 1, premiums for the HealthSmart plan increased an average of 20.5 percent, taking the average yearly premium to $3,886.01. The increase was a first for the plan, which had 10,921 people enrolled in October.

But it wasn't enough. A month later, Anthem asked for, and was granted, a second increase. On April 1, premiums will rise another 7 percent.

Several other Virginia Anthem plans that saw increases in October also will in April.

One of the largest plans affected by double rate increases was the KeyCare Flexible Choice plan, with 41,528 Virginians enrolled in October. On average those policyholders will see a 6.8 percent increase in April, after already enduring a 15.3 percent increase in October. The increases bring the average estimated annual premium to $2,770.47.

Rates on another large plan, Essential KeyCare with about 21,700 policyholders, will go up 7.5 percent in April, after having already risen 8.5 percent in October.

The double rate increases don't just apply to the larger plans. The Lumenos HSA, which had 6,250 people enrolled in October, increased on average by 15 percent in October and will jump 12 percent in April.

For all the individual plans, premiums differ based on age, health and gender, which is why average increases are given.

Golden noted that the economy has played a unique role in the current situation because more healthy people decided to drop their insurance. That results in a smaller insurance pool of people who require more care, he said.

In her letter to insurers, including WellPoint, Sebelius asked that the same kind of data shared with state bureaus of insurance be made available to customers online.

"We're just asking them to put that same kind of data on their Web site and provide some kind of transparency for the American people," Sebelius said during a conference call with reporters.

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