Attorney General, Healthcare Advocate Say Insurance Dept Rejection Of New Evidence In Anthem Rate Case Is Troubling

July 31, 2009

Attorney General Richard Blumenthal and Healthcare Advocate Kevin P. Lembo said they are deeply troubled that the Department of Insurance (DOI) has rejected new evidence proving that the Anthem Blue Cross Blue Shield rate increase is excessive and should be rejected.

The DOI rejected Blumenthal's and Lembo's filing, refusing to reopen the record in the Anthem rate case, even after accepting supplemental information from Anthem after last week's public hearing.

"This decision is a reckless refusal to review new and significant evidence that Anthem's proposed rate increase is excessive," Blumenthal and Lembo said. "Even after accepting supplemental statements from Anthem, the Insurance Department is refusing to even consider counterproof that Anthem's rate increase deserves rejection. This decision is inexplicable and incomprehensible. It gives the insurance company the last word.

"The Insurance Department is abandoning a moral responsibility to accept and scrutinize every shred of evidence in this massive rate case. This powerful and profitable company -- already sitting on huge reserves -- is asking for a rate increase that will drastically devastate consumers, and make health insurance unaffordable.

"Only after last week's public hearing did new evidence emerge that a significant portion of Anthem consumers -- more than the company first characterized -- will suffer severe rate increases of at least 30 percent. Some will receive even much higher increases because they will move to a higher age bracket."

Blumenthal and Lembo have urged the DOI to reject any rate increase in any Anthem individual health insurance policy because:

• Anthem is profitable. Anthem has consistently generated millions of dollars in profits from its health insurance business in Connecticut. Less than 80 cents of every premium dollar from individual health plans have funded medical services for consumers, yet Anthem wants significantly more money.

• Anthem could use reserves to shield their insureds from any rate increase. Anthem is seeking a huge rate increase during an economic downturn, when consumers are struggling with lower wages or being laid off and despite having huge reserves for unexpected losses.

• Actual insurance costs do not justify a rate increase. Anthem relies on faulty and phantom factors to justify its rate increase, inflating its projected health care costs by double counting rising health claims of insureds as they age, assessing all consumers for the cost of broker commissions even if the individual did not use a broker.

• Insureds are unprepared for significant increases in insurance costs. Although policies are sold on a calendar year basis, Anthem wants a mid-term increase effective on Oct. 1. Consumers were never notified that such an increase was possible.

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