California's Health Insurance Woes Shape National Debate

Los Angeles-based Anthem Blue Cross' recent attempts to raise insurance premiums among some of its customers by as much as 39 percent has drawn national attention and has likely given new life to the ailing health-care reform legislation being pushed by the Obama administration.

" ... There was a report that Anthem Blue Cross, which is the largest insurer in the largest state, California, is planning on raising premiums for many individual policyholders by as much as 39 percent," President Obama said last week. "If we don't act, this is just a preview of coming attractions. Premiums will continue to rise for folks with insurance; millions more will lose their coverage altogether; our deficits will continue to grow larger. And we have an obligation -- both parties -- to tackle this issue in a serious way."

Anthem states its increases -- which it has agreed to put off until May 1 as the California insurance commissioner investigates -- are the result of high unemployment that has trimmed tens of thousands of paying customers from its clientele base while remaining patients are forced to make up the difference.

Interestingly, as the New York Times notes, Obama's proposal would mandate that everyone get at least minimal health insurance, which would take such an excuse away from insurers.

"Paradoxically," the Times reports, "since [Anthem parent] WellPoint has lobbied vigorously against the legislation, the company argued last week that its 'unfortunate but necessary' rate increases demonstrated the need for a major fix."


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