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Anthem cuts, delays premium rate hikes
Anthem Blue Cross, the WellPoint subsidiary in California, announced it will raise individual premium rates by less than originally planned and will also delay increases to co-payments and deductibles. The move comes just days after Blue Shield of California said it wouldn't raise individual rates for 2011 amid intense political and public pressure.
Scaling back rate increases for the second time in less than a year, Anthem is reducing average hikes planned for July 1 to 9.1 percent from 16.4 percent. It also is putting on hold until January 2012 plans to hike policyholders' deductibles and co-pays for medical services, reports the Los Angeles Times.
Anthem said its decision would reduce rate increases for more than 500,000 members, while 80,000 members who have basic hospital plans would see rate decreases. Anthem lost approximately $110 million on individual health insurance coverage in California in 2010 and expects to do so again in 2011--even with the rate increase, according to the Sacramento Business Journal. A WellPoint spokeswoman cautioned that the rate increase isn't enough to cover medical costs and will cause the company to lose money this year on the market for insuring individuals in California, which is its largest state, reports the Wall Street Journal.
California Insurance Commissioner Dave Jones estimated Anthem customers will save at least $40 million as a result of the decision, notes the Sacramento Bee. However, he added that Anthem's rate reduction does not change the fact that prior rate hikes remain in effect and they have hit consumers hard.
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