As reported earlier, Anthem Blue Cross of California is raising insurance rates as much as 39% for California consumers. Today it is reported, Secretary of the Department of Health and Human Services, Kathleen Sebelius, wrote a letter to the company asking to “provide a detailed justification for these rate increases to the public.”
Sebelius also addressed an issue important to the Senate health care reform bill, Medical Loss Ratios- or the amount an insurer spends on care in comparison to profits, administration and advertising. “Additionally, you should make public information on the percent of your individual market premiums that is used for medical care versus the percent that is used for administrative costs.” As Jake Tapper reports, Anthem earned $2.7 billion and sales rose 26% in just the last quarter of 2009. Under reform if a company were to see large profits without significant increases in health care costs, consumers would be reimbursed for their premium payments rather than see premiums skyrocket.
The Obama administration has been criticized in recent weeks about the slow response to addressing health care reform since the election of Scott Brown. This move is perhaps a signal from the administration that they are readying to become aggressive about health care reform. Coupled with President Obama’s announcement yesterday of a February 25th summit with GOP leaders about health proposals, the White House appears to be going on the offensive to speeding the health care reform process.
By Emma Sandoe