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 said on Friday it would buy Cigna Corp in a deal valued at US$54.2 billion, creating the largest U.S. health insurer by membership.
The deal – the biggest ever in the health insurance industry – comes three weeks after Aetna Inc agreed to buy Humana Inc for US$37 billion and is part of an industry-wide consolidation following the roll-out of President Barack Obama’s healthcare law.
Antitrust authorities are expected to aggressively scrutinize how the combinations will affect competition for Medicare and individual and commercial insurance.
WASHINGTON (AP) — The leaders of two major health insurers planning separate multi-billion dollar acquisitions made the case for the deals to Congress as senators questioned whether they would hurt competition and raise prices for consumers.Blue Cross-Blue Shield insurer Anthem plans to buy Cigna for $48 billion, and rival Aetna is looking to buy Medicare Advantage coverage provider Humana for $35 billion. As a wave of consolidation sweeps through the industry, the deals came under scrutiny at a Senate Judiciary subcommittee hearing Tuesday.