WellPoint Anthem To Cut, Delay Calif Rate Increase

WellPoint Inc.'s (WLP) Anthem Blue Cross of California has agreed to delay and reduce its 2011 rate increases for individual health plans, a move that will save customers in the state at least $40 million, the state's insurance commissioner said Monday.

Anthem Blue Cross, the state's largest health plan, projected it will lose money on individual health-insurance coverage in California this year after losing some $110 million there in 2010. The losses, however, are anticipated to be less than the $40 million in savings that the commissioner referenced, the company said, without giving a specific projection.

Anthem will delay its rate increase to July 1 from April 1 and will cut the growth to an average of 9.1% from the average 9.8% planned in its original filing. The insurer also will delay until Jan. 1, 2012, increases in copayments and deductibles it had planned for some individual policies, California Insurance Commissioner Dave Jones said in a news conference.

Jones said Anthem's original request really would have amounted to a 16.4% rise in part because it would have boosted copays and deductibles for most individual plans in the middle of this year. Some 600,000 policy holders will benefit from the decision, he said.

The insurer, in its own announcement, stuck with the 9.8% figure for the initially planned increase; Anthem had originally filed for higher deductibles and copays in some individual plans as a means of moderating its rate increase, a spokeswoman said.

Jones early this year asked Anthem, Aetna Inc. (AET), UnitedHealth Group Inc.'s (UNH) PacifiCare and nonprofit Blue Shield of California to delay their 2011 rate increases while his department reviewed them.

Blue Shield of California, whose rates Jones had called excessive, last week withdrew its rate filing and said it wouldn't raise rates for any individual or family-plan member for the rest of the year, even though it, too, is losing money on individual coverage.

Jones is pushing state lawmakers to give his office authority to reject excessive health-insurance premium increases.

WellPoint's Anthem Blue Cross said Monday that an estimated 80,000 California customers will receive rate decreases this year, per the original filing.

"We are the largest health plan in the state of California, and our mission is to ensure quality health care for residents of the state at the most affordable price," said Anthem Blue Cross President Pam Kehaly.

"We are pleased with the resolution of this matter, but feel all stakeholders in the health-care market in the state must do more to control the unrelenting rise of underlying health-care costs. We plan to be an active participant in helping forge that dialogue, and bringing together the major health-care players to find the best solutions for California consumers," she said.

WellPoint last year withdrew a California filing calling for rate increases as high as 39% in individual policies after actuaries found miscalculations--and after considerable criticism from state and national policymakers. Backlash over the company's original 2010 rate filing played into the national debate over a health-coverage overhaul, which ultimately became law.

-By Dinah Wisenberg Brin, Dow Jones Newswires; 215-982-5582; dinah.brin@dowjones.com

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