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.
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.