Insurance: USA's Anthem backs down on premium rate increase
The US government continues to interfere in the management of financial services businesses. The latest target is Anthem, a California insurance company which, Speaker Nancy Pelosi, says has made an announcement that will have an impact on all insurance companies in the USA.
Speaker Nancy Pelosi welcomed an announcement that California insurance company Anthem will withdraw its proposed 39 percent rate increase. She said "Anthem's announcement is another sign that America's insurers are getting the picture: the days of shameful insurance practices, including outrageous rate hikes, will not be tolerated."
She went on "This decision is good for California's families - and sets the stage for insurers nationwide to follow suit. It comes on the heels of announcements that our country's largest insurance companies will end the shocking policy of dropping people when they get sick and allow young Americans to stay on their parents' plan until age 26 earlier than the health insurance reform legislation required, with employers getting the assurance that providing the immediate coverage for young people will be tax-free."
Anthem is a medical insurance provider - operating under hte Anthem Blue Cross and Blue Shield brands. It also has a life insurance company.
The company's parent, Wellpoint, had said that Anthem's Californian business was in need of a substantial premium increase and planned to increase premiums for around a quarter of its Californian customers by between 35 and 39% to counter the double whammy of rapidly increasing medical bills and the loss of many healthy customers. The company said that the average rise would be approx 25% but that some customers would actually see a decrease in premiums as rates were re-assessed.
Without the increases, the company said, its profit margin would fall far below that of its competitors.
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