It’s good to be king. As long as shareholders are happy, ratepayers continue to scramble to keep their health insurance.
What’s to stop insurers? Nothing in California, that’s for sure.
Anthem announced today that its first-quarter earnings jumped 23 percent. It earned $865.2 million in the quarter, more than $160 million than it did last year. Anthem joined UnitedHealth Group Inc. and Aetna Inc., among others, that have recorded record profits. Anthem's stock has hit several new all-time high prices in recent months.
It’s unsurprising, because in California, Anthem Blue Cross’ profits…(ahem)…premium rate hikes for its policyholders don’t need approval by the state.
Last week, Insurance Commissioner Dave Jones called out Anthem Blue Cross for failing to justify a rate increase on consumers, overcharging policyholders $33 million. Instead of the power to reject an outrageous rate hike, the commissioner has a bully pulpit that Anthem and others ignore. Since 2013, Anthem has imposed $145 million in rate hikes deemed by regulators to be unjustified.
Consumer Watchdog sponsored Proposition 45 last year, which would have given the insurance commissioner the power to regulate health insurance rates the way that auto, home and business rates are in California. It would have allowed the commissioner to make health insurance companies justify their rate hikes under penalty of perjury, and to reject excessive rate increases. Thirty-five states have already enacted such laws, but not California.
Anthem spent $18.7 million of the $56 million insurance companies kicked in to defeat Prop. 45. A $164 million profit spike in three months compared to last year tells you why.