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Tuesday, March 2, 2010

WellPoint strikes back

The news of WellPoint's Anthem Blue Cross Blue Shield hiking up premiums for its customers in California by 39% made waves across the country, and many other of WellPoint's affiliates will soon follow suit.

California consumers are not alone as they face huge premium hikes. Other consumers in states across the country also will see rate hikes from WellPoint this year. According to the Center for American Progress,

In fact, double-digit hikes have been implemented or are pending in at least 11   other states among the 14 where WellPoint's Blue Cross Blue Shield companies are active: California, Colorado, Connecticut, Georgia, Indiana, Maine, Nevada, New Hampshire, New York, Virginia, and Wisconsin.

This means that families who are already struggling to pay for their health costs will have to dig a little deeper to afford premiums.

Although WellPoint claims that they will increase rates to make up for lost costumers, they are still making huge profits. According to the Center for American Progress, the company in 2009 made $4.7 billion in profits.

Why does a company that is making huge profits need to raise insurance rates up to 50% on their costumers?

The answer to that question may not be clear. But we do have a solution to begin fixing the problem: health reform.

The bills already passed by both the House and Senate-and in the President's proposal-include rules that will give states and the federal government authority to ask insurance companies to justify high premium increases. If an insurance company isn't spending a specified portion of premium dollars on health care expenses, then the company will have to provide a refund to consumers.

Health reform will help to balance the relationship between consumers and insurance companies in the marketplace-no longer will insurance companies have all the power.