WellPoint says the 39% increase reflects rising medical costs and that its profit margin in California is 'in line with and below that' of competitors.
The parent company of Anthem Blue Cross on Thursday defended its 39% increase in premiums for individual policyholders in California, saying the rising rates reflect soaring medical costs but are "very competitively priced when compared with other California plans."
An investigation in California over dramatic health insurance increases is spurring a federal inquiry. Two congressional committees have asked executives from WellPoint, the parent company of Anthem Blue Cross of California, to explain why the company is raising premiums by as much as 39 percent for some customers.
Anthem Inc. (NYSE:ANTM), the second-largest US health insurer by market value, continues to take the blame for its unsatisfactory response in protecting its customers against the recent data breach, one of the biggest of all times. Almost ten US states sent a letter to Anthem on Tuesday, blaming the company for being too slow in informing its customers whose personal data was compromised after the attack by hackers.
A six-month battle in California over health insurance has come to an end. When health insurer Anthem Blue Cross announced rate hikes last March of up to 39 percent for individual policyholders, it made national news. The Obama Administration weighed in, and the state refused to approve the increase. After examining the company's accounting, California's insurance watchdog has approved a rate hike, though a smaller one.