Anthem Blue Cross—a subsidiary of WellPoint, the country’s second largest insurer—and its 39 percent rate increase in California became somewhat famous early in 2010 as the health reform law stumbled to the finish line. Democratic politicians used the new rate card to help push the Affordable Care Act over the line. California senator Dianne Feinstein called the rate hike unconscionable, saying it was proof of the need for comprehensive health reform. California representative Henry Waxman’s comment made it on ABC World News. “Health insurers like WellPoint may get richer,’’ the congressman said, “but our nation’s health will suffer. We cannot go down this road forever.” The New York Times questioned whether such “unsustainable” pricing is driven by the “bloodless economics of risk or a corporate culture of greed.” The Times story concluded with a prediction from “several insurance analysts,” who said it was possible “but not necessarily likely” that such increases would become common while the economic downturn persisted.
What a difference two years makes! This winter, Anthem announced an average rate increase of 10.4 percent; for some customers, the rate rose by as much as 30 percent. State insurance regulators, who have no power to stop such increases, did some jawboning, and Anthem rolled back its rate hike to an average of 8.2 percent, and as much as 20 percent for policies sold to small business owners. A few California news outlets reported the news, but the national media paid no attention. “Raising rates in the double digits is now happening with more frequency,” says Jamie Court, the president of Consumer Watchdog, a California advocacy group that fights such increases. “But that’s not news.”
This raises an important question: Is a story a story only when politicians make it one, or when it fits into the narrative of some big national issue, like the struggle to pass health reform legislation? Though insurance rate increases can lead to stories that are tricky for reporters and boring to editors, they will be part of the health care scene for the foreseeable future. After all, wasn’t that what the Affordable Care Act was all about: making health insurance more affordable?
The anecdotes laced throughout the few California media stories there were make that point. Chad Terhune, a reporter for the Los Angeles Times who knows how to cover health insurance, described the predicament of a 57-year-old marketing researcher named Josh Libresco, whose family premium for an Anthem policy will rise 29 percent come May 1. That’s on top of an increase in the family deductible from $5000 to $5900 and increases in copayments. ‘“I don’t know how people can afford these increases every year. We are about at our limit,’” said Libresco. “‘Whether it’s 20 percent or 29 percent, it’s still an enormous number.’”
Victoria Colliver at the San Francisco Chronicle described what happened to small business owners Christopher and Janet Hildreth, who have a policy with one of Anthem’s competitors, Blue Shield of California. Blue Shield did not hit the Hildreths with a premium increase. Instead it replaced their old policy with a new one that gives them less coverage at a higher cost. In insurance jargon, that’s called “closing off a block of business,” and insurers do it all the time when certain policies become unprofitable. Welcome to the Great Health Care Cost Shift, which is occurring alongside double-digit rate increases.
Anthem is not the only California insurer in quest of higher rates. Aetna has just announced increases averaging eight percent annually, and as high as 21.4 percent for some small employers. California insurance commissioner Dave Jones said the increase amounts to 30.3 percent over two years, which he called “unreasonable and not justified by the company’s claims experience.” But Jones can’t do much about it. In states like California without strong regulations, the media is the only watchdog.