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Anthem Blue Cross to boost insurance premiums

February 23, 2010 12:00:00 AM PST
A plan by Anthem Blue Cross to boost insurance premiums is under fire.Protestors in Woodland Hills and angry lawmakers in Sacramento blasted the company Tuesday.

The rate increase is scheduled to take effect on May 1. Individual insurance premiums will go up by as much as 39 percent and that has policyholders and lawmakers outraged.

The company says don't blame them, they say blame it on rising health care costs.

Coffee shop owner Jessie Fink is one of 700 thousand Californians who was told their rates are going up. His annual premium would increase by nearly four thousand dollars.

"Feels sort of like someone has a gun at my head and they're saying take this or leave it," Fink said.

Hundreds of medical providers and patients came to Anthem's headquarters in Woodland Hills to let the company know they will fight. They say Anthem is not only trying to raise rates, it's also cutting payments to a number of providers. Many say it will be impossible to stay in business.

"They're decreasing payments to us by as much as 40 percent," medical provider Dan Souza said. "Sacramento needs to hear this."

Sacramento is hearing about it. Anthem executives are testifying before members of the Assembly's Health Committee.

The company says it needs to increase premiums in part because younger, healthier people have been dropping health insurance coverage during the recession, leaving it with a pool of policy holders that is older and more dependent on health care services.

Jim Sharp worries he might not be able to continue his medical treatment.

"I was just told and I read a letter that was handed to me from my physical therapist showing that Blue Shield Anthem was going to be dropping and cutting the rates and that they won't be able to provide me the service."

Anthem's customers in California that are covered by employer-sponsored plans will not be affected by this rate increase. Anthem officials say they are offering to work with state lawmakers on health care reform.