Rate Proposal by WellPoint Is Withdrawn

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DavidRoss
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Joined: Mon May 30, 2005 7:05 am
Location: Northern California

Rate Proposal by WellPoint Is Withdrawn

Post by DavidRoss » Sat May 01, 2010 11:23 am

Rate Proposal by WellPoint Is Withdrawn

By ANNA WILDE MATHEWS

WellPoint Inc. said it would revise its request for steep rate hikes in California's individual market, after a state regulator said it found flaws in the company's application.

The proposed premium increases by the company's Anthem Blue Cross unit would have affected more than 700,000 consumers, who would have seen their rates go up by as much as 39%. The hikes became a big political issue at the state and federal levels, leading to high-profile hearings in Washington, D.C., and helping to generate momentum for the recently passed health overhaul.

WellPoint said it would submit a new rate application as soon as possible, likely in May. A spokeswoman said it didn't yet know how the new rate proposal would compare to the prior one.

California Insurance Commissioner Steve Poizner, who is a Republican candidate for governor, said an outside actuary hired by the state had found "multiple, significant errors," including in how the company calculated medical-claims trends. He said the agency had informed Anthem of the results recently, and he argued the company withdrew its rate request because of the findings. Mr. Poizner said he expected the new rates proposed by Anthem to be "way down" from the original request.

A WellPoint spokeswoman said it decided to revise the application for several reasons, including "miscalculations" flagged by the commissioner's office. The company also wanted to incorporate updated medical-claims data and to bring the application into early compliance with a new federal requirement dealing with insurance-industry administrative costs, she said. However, the details of this standard haven't yet been laid out by regulators.The company had in February agreed to delay the higher rates until May. They were originally supposed to start in March.

The move comes as regulators in several states are clashing with insurers over premiums. In Maine, a court recently rejected a WellPoint unit's challenge to a state regulator's decision there to refuse part of a requested premium boost. In Massachusetts, insurers are fighting a decision by a regulator to deny 235 of the 274 rate increases they had requested in the small-group market. A Colorado regulator is also examining rate hikes there by a WellPoint unit and Aetna Inc.

http://online.wsj.com/article/SB1000142 ... 43580.html
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