Anthem Blue Cross
Encyclopedia
Anthem Blue Cross is a major US health insurance provider which is a subsidiary of insurance giant Wellpoint
. Anthem has about 800,000 customers, and has more individual policyholders in California
than any other insurer. It is an independent licensee of the Blue Cross Blue Shield Association
based in Thousand Oaks, California
.
Wellpoint had a net income of $2.49 billion in 2008, and $4.7 billion in 2009.
for the problem of rising US health costs, in February 2010, when it announced that it was raising rates on some individual policy holders by as much as 39% as of March 2010. The rate increase came one year after Anthem had raised rates 68% on individual policy holders.
To explain the latest rate increases, some which were four times the rate of medical inflation, Anthem said the company has experienced a death spiral, as unemployment
and declining wages lead healthy customers to drop their insurance, the remaining risk pool becomes sicker and more expensive to insure, and, in turn, prices are forced up and push more people out of the market.
In response to the outrage from politicians and consumers, Anthem postponed the rate increase until May 1 2010.
Given Anthem’s rate increase plans, Senator Diane Feinstein, Democratic Senator of California, has proposed giving the federal
government authority to block insurance premium hikes considered to be “unjustified.”
WellPoint
WellPoint, Inc. is the largest health plan company in the Blue Cross and Blue Shield Association. It was formed when WellPoint Health Networks, Inc. merged into Anthem, Inc., with the surviving Anthem adopting the name, WellPoint, Inc...
. Anthem has about 800,000 customers, and has more individual policyholders in California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
than any other insurer. It is an independent licensee of the Blue Cross Blue Shield Association
Blue Cross Blue Shield Association
The Blue Cross Blue Shield Association is a federation of 39 separate health insurance organizations and companies in the United States. Combined, they directly or indirectly provide health insurance to over 100 million Americans. The history of Blue Cross dates back to 1929, while the history of...
based in Thousand Oaks, California
Thousand Oaks, California
Thousand Oaks is a city in southeastern Ventura County, California, in the United States. It was named after the many oak trees that grace the area, and the city seal is adorned with an oak....
.
Wellpoint had a net income of $2.49 billion in 2008, and $4.7 billion in 2009.
Management
Anthem was led by Leslie Margolin, company president. She was named to the position in January 2008, and also served as CEO of the firm’s Life and Health affiliate. Angela Braly is currently serving as CEO of the company.Recissions
In 2007, the California Department of Managed Health Care (DMHC), a California state regulatory agency, investigated the company's policies for revoking (rescinding) health care insurance policies. The DMHC randomly selected 90 instances in which the company canceled the insurance of policy holders after diagnoses with costly or life-threatening illnesses, to determine how many cancellations were legally justified. The agency concluded that Anthem Blue Cross lacked legal grounds for canceling policies in every single instance. "In all 90 files, there was no evidence (that Blue Cross), before rescinding coverage, investigated or established that the applicant's omission/misrepresentation was willful," the DMHC report said.2010 rate increases
Anthem gained worldwide media attention and became a poster childPoster child
A poster child is a child afflicted by some disease or deformity whose picture is used on posters or other media as part of a campaign to raise money or enlist volunteers for a cause or organization...
for the problem of rising US health costs, in February 2010, when it announced that it was raising rates on some individual policy holders by as much as 39% as of March 2010. The rate increase came one year after Anthem had raised rates 68% on individual policy holders.
To explain the latest rate increases, some which were four times the rate of medical inflation, Anthem said the company has experienced a death spiral, as unemployment
Unemployment
Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...
and declining wages lead healthy customers to drop their insurance, the remaining risk pool becomes sicker and more expensive to insure, and, in turn, prices are forced up and push more people out of the market.
In response to the outrage from politicians and consumers, Anthem postponed the rate increase until May 1 2010.
Given Anthem’s rate increase plans, Senator Diane Feinstein, Democratic Senator of California, has proposed giving the federal
Federal government of the United States
The federal government of the United States is the national government of the constitutional republic of fifty states that is the United States of America. The federal government comprises three distinct branches of government: a legislative, an executive and a judiciary. These branches and...
government authority to block insurance premium hikes considered to be “unjustified.”
2009-10 security breach
In June 2010, Anthem sent letters to 230,000 customers in California warning them that their personal data might have been accessed online. After a routine upgrade in October 2009, a third-party vendor stated that all security measures had been properly reinstated, when in fact they hadn't. As a result, thousands of applicants for coverage who were under the age of 65 had their personal information exposed in the open. After a Los Angeles-area woman discovered her application for coverage was publicly available, she filed a class-action lawsuit against Anthem. While gathering evidence for the proceeding, the woman's lawyers downloaded some confidential customer information from Anthem's Website and alerted Anthem about the breach. According to the lawyers, confidential information had remained out in the open for five months.External links
- Summary of Anthem rate increase news http://www.kaiserhealthnews.org/Daily-Reports/2010/February/13/anthem-rate-hike-delay.aspx
- Sourcewatch profile - www.sourcewatch.org
- Center for Responsive politics profile (Blue Cross/WellPoint)- www.opensecrets.org