Panel hot about premium hikes: WellPoint’s state chief, state insurance agency pressed for explanations [The Indianapolis Star]

Feb. 18--State lawmakers grilled the Indiana president of WellPoint's Anthem Blue Cross and Blue Shield on Wednesday about the company's rising premiums as it disclosed that average rates for the 107,000 individual policyholders in Indiana are rising 21 percent this year.

For more than a week, Indianapolis-based WellPoint has endured withering criticism for raising rates on some Indiana and California customers by up to 39 percent. Beyond the Statehouse, one Indiana customer complained this week of a rate hike of more than 50 percent.

The criticism resulted in Indiana's Anthem President Robert Hillman and representatives from the Indiana Department of Insurance appearing before the House Insurance Committee on Wednesday to justify the rate increases.

"I don't ever see Anthem being proactive, trying to help us help the people get coverage. It's always bottom-line stuff. That can be said about every insurer," Rep. Craig Fry, committee chairman, told Hillman in a crowded Statehouse hearing room. "I see you guys as part of the problem, not part of the solution. And that shouldn't be."

Hillman blamed a bad economy and rising health-care costs as the main causes of the increases.

Fry, D-Mishawaka, wasn't buying it. He suggested lawmakers might need to study the issue this summer to determine what, if anything, the state could do to address rising health-care costs.

Doug Webber, chief counsel and acting commissioner of the Indiana Department of Insurance, was quizzed by the committee about how the agency reviews and approves premium rates for plans that consumers purchase on their own when they don't have access to employer group coverage.

Webber defended the department's preapproval process for premium-rate increases on individual plans.

He said the agency uses an independent actuary to review increases before they are passed on to consumers. He said the contracted actuary has reviewed premium increases on individual plans for about 15 years.

Webber noted that in California, independent actuaries are being brought in to review premium increases on the back end of the process.

"Our consumers on the front end are protected, the citizens of Indiana, as best we can," said Webber, who is filling in for Commissioner Carol Cutter, who is on medical leave. "That process has worked well for us."

Nevertheless, U.S. Rep. Andre Carson, D-Ind., has asked the department to provide him with information on all rate hikes approved for WellPoint and Anthem since June 30.

At Wednesday's Statehouse hearing, Webber said Indiana uses a national benchmark to require that at least 55 percent of premium dollars on individual plans be paid for benefits.

California requires at least 70 percent of individual plans' premium dollars go for benefits.

But Webber said a minimum requirement such as in California would hurt competition in the Indiana market, which he said has about 150 insurers offering individual coverage.

Hillman said that for individual plans in Indiana, 76 percent of premiums went for benefits in 2009, up from 68 percent in 2007.

Hillman said Anthem is investing in initiatives to promote wellness and quality care and works to negotiate competitive rates on behalf of its members. "We understand and share our members' concern about the rising rates."

WellPoint has come under fire from the Obama administration and other critics of the insurance industry amid reports of escalating premium increases. In California, regulators asked for and received from WellPoint a postponement in planned increases reported to be as high as 39 percent.

At least one Indiana customer has seen rates skyrocket even higher.

Jack Altekruse, Westfield, said the premiums for his wife's individual policy jumped from $390.33 a month in December to $588.11 in January -- 51 percent.

"It just seemed like wow, that's quite an increase," Altekruse said. He said his wife is 64 and would soon be eligible for Medicare.

WellPoint spokeswoman Kristin Binns said that sort of increase was an exception. "Only a very small number may have experienced a rate adjustment similar to this," she wrote in an e-mail.

Fry, in an interview after the hearing, said he was most struck by the fact that the Department of Insurance's preapproval for individual policy rates is based on a single contracted actuary reviewing increases.

"As I sleep tonight, I'm going to figure out what I'm going to do and figure out if there's a bill where I can make some changes," Fry said. "We have one guy who's not even a state employee. We don't know who he is. We don't know what his interests are."

About 107,000 of Anthem's 2.8 million members in Indiana purchase individual coverage.

Call Star reporter Daniel Lee at (317) 444-6311.

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