From the AP, via the Washington Post, “Anthem Blue Cross withdraws big CA rate hike”:
Insurance giant Anthem Blue Cross, the company criticized by President Barack Obama when it proposed raising rates for Californians by as much as 39 percent, withdrew plans for the proposed hike Thursday.
Los Angeles-based Anthem made the decision after an independent audit determined the company’s justification for raising premiums was based on flawed data, state Insurance Commissioner Steve Poizner said.
The decision also came one day after Anthem’s parent, Wellpoint, Inc. of Indianapolis, announced its first-quarter profit soared by 51 percent.
Anthem said separately it will file a new application for a rate increase with the California Department of Insurance and the Department of Managed Health Care, perhaps as early as next month. It added that any errors in its original application were inadvertent.
“The current application that was withdrawn today was just flawed,” Poizner said during a conference call with reporters. He added that it contained mathematical errors and in some instances double counting of data.
Poizner said state insurance officials will review the [proposed] change to make sure it adheres to all state statutes. He added that state officials immediately suspected Anthem’s original proposal was inaccurate, but company officials insisted it was not. However, the company agreed to the independent evaluation by outside experts that subsequently uncovered the errors.
The study, more than 100 pages in length, will be released in the next few days, Poizner said. He said the cost of the study, which was not disclosed, is being billed to Anthem.
Yes, it’s a temporary reprieve, but it’s still good news for Anthem’s California customers… and a small net positive for the political success of “Obamacare”.
Are these audits standard, or do insurance conglomerates just have the new grads slap something together in excel that, surprise, surprise, necessitates a rate hike and hopefully no one double checks their work?
What a racket.
Hahahahah. I hope whoever said that had a shoe thrown at them.
@ChrisS: Not new grads, MBA summer interns. They typically work on two-three projects during the summer. It seems to me that a rate hike scheme is perfect for a risk management MBA.
I’m going to take a wild guess and bet that virtually all of the “inadvertent errors” were in favor of the company charging higher premiums.
Anthem asks for a 40% rate increase, and then says they didn’t check the math?
That’s insulting. They ought to be investigated and prosecuted for attempted fraud and gross arrogance.
This fits perfectly with mistermix’s post one down, and the comment to the effect that we’re going to start seeing insurance companies “voluntarily” doing the right thing — thus nicely setting the table for a HCR Repeal argument that goes, “See, the industry corrects itself, no need to shove all this governmentreform down our throats” (paraphrasing like mad but that was the gist).
Regardless, it *is* good news, and not only for Californians.
This is completely in keeping with the way most (or all) corporations do their math. The power companies that are trying to build a massive high-voltage transmission line to run through three states (WV, VA, and MD) had to withdraw their application in VA after the state commission forced them to conduct better analysis on their claims of need – the companies had to acknowledge the line isn’t needed in 2014 (four of the six scenarios show it’s not needed until 2021 – and given the changes taking shape in our national energy policy, I’m willing to bet it won’t be needed then, either).
Sorry to go on, but I don’t think we can believe much of anything companies tell us any more. I know many people feel that way about the government, but at least we have some ways of compelling answers from federal agencies.
Doctor in my family has previously described Wellspring as the worst of the worst in predatory insurance companies.
I testify in CA legislature all the time on health issues. On every issue of ensuring patient protection or even just getting people some actual benefits for all the money they paid, the insurance companies send in an army of well paid lobbyists to cry over and over, “If you make us do that prices will go up and it won’t be our fault that uninsured numbers rise”
This just proves they are and have always been full of shit.
Wait a second, because I need to type this out in order to believe it. They were set to increase rates a whopping 39%. A rate increase so huge it must have made everyone on their board do triple takes (follow by triple flips, I assume). An increase so huge it tipped the balance of power in the public’s mind on insurance reform. And they didn’t bother to double check their numbers before dropping this bombshell in the middle of the HCR debate???
I can’s grok this. Either they are complete buffoons or they have a level of hubris unseen since Dick Cheney said we’d be greeted as liberators.
Or both. But I think it was a case of shoot-the-moon: They figured if ‘Obamacare’ failed, they would get their unearned blood money; and if it succeeded, they were going to have to re-calculate everything using honest numbers anyway. One last big grab, before the cops swept through & confiscated the loaded dice…
Comrade Colette Collaboratrice
These are not mutually exclusive. I’m just grateful that our premiums won’t be going up after all (at least for now); my boss had privately told me that he was worried that, non-discrimination laws notwithstanding, we might no longer be able to hire anyone over 30 because we wouldn’t be able to afford their premiums.
Poizner must feel all icky acting as a consumer advocate. I can’t wait for the Whitman ad attacking him as being the enemy of free-enterprisey medical insurance companies.
This doesn’t help me and my family. The truth is, Anthem has been increasing premiums for over a year. That 39% increase was just one of many increases. The timing of that particular increase was bad and attracted scrutiny. My premiums were raised by 36%, my husband’s by 49% and my daughter’s by 24% earlier in 2009 and will NOT be withdrawn, despite the fact that the justification for those increases were based on the same flawed data.
Poizner is a far right loon now running for governor. If Wellpoint hadn’t withdrawn its application itself, Poizner wouldn’t have rejected it.
And yet, Team Meg is cramming themselves to the right of Poizner. Two really rich people, sitting together on a toothpick, running for a monumentally crappy job.