California's Anthem Blue Cross admits 'miscalculation' in 39 percent rate hike

The Sacramento BeeApril 30, 2010 

Anthem Blue Cross used deeply flawed math and assumptions when it announced plans to hike premiums by as much as 39 percent for thousands of California subscribers, the Department of Insurance announced Thursday.

Acknowledging that it had made "inadvertent miscalculations," the state's largest for-profit health insurer said it would withdraw its controversial rate filing. The company said it is considering re-submitting its filing as soon as next month but did not disclose specifics.

The decision to withdraw its original proposal brings relief to more than 700,000 Blue Cross subscribers in California who buy health policies on their own.

The proposed rate hikes caused an uproar not only among cash-strapped consumers, but also among elected officials in Sacramento and on Capitol Hill. They summoned company executives for hearings that served as a sideshow to the unfolding political spectacle over a massive health care overhaul.

Some considered the health care legislation all but dead in January, when the rate hikes stoked public anger and rekindled passion among advocates for change.

Insurance Commissioner Steve Poizner, a Republican running for governor, hired an outside actuary in February to investigate the proposed rate hike.

"We found substantial mistakes," Poizner said, adding that the errors "would have led to massive and unjustified rate increases. We notified Anthem of these errors, and they admitted to the mistakes."

To read the complete article, visit www.sacbee.com.

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