Sebelius urges states to investigate Wellpoint math on rate hikes

Kathleen Sebelius, secretary of the Department of Health and Human Services, said states should investigate if WellPoint Inc. made math errors in how it justified rate hikes this year, The Wall Street Journal reports. "In a letter being sent to state insurance commissioners and governors late Tuesday, Health and Human Services Secretary Kathleen Sebelius calls for a national inquiry into the data underpinning rising health-insurance costs. Ms. Sebelius is seizing on WellPoint's decision last week to withdraw a request for up to a 39% price increases on individual plans in California after an actuary hired by the state found several mistakes in the filing."

California's Department of Insurance found mathematical mistakes in WellPoint's rate hikes such as "overestimating future medical costs and double-counting the effect of its policyholders aging, according to insurance commissioner Steve Poizner, a Republican candidate for governor. ... Ms. Sebelius's letter urges states to tighten their review processes, noting that [the] new health law makes available $250 million to states for that purpose. Some state officials have already started acting in the wake of WellPoint's admission last week" (Johnson, 5/5).

Los Angeles Times: Consumer groups, too, are calling for reviews of Anthem Blue Cross (a business unit of WellPoint) in California. "The request by Health Access California follows Anthem's decision last week to withdraw rate hikes of as much as 39% for many of its 800,000 individual policyholders. ... The group wants rate increases scrutinized when they affect any of the more than 5 million Californians who have individual insurance policies or coverage purchased as part of a small employer group. Two state agencies regulate insurers and review filings for rate increases. Neither has authority to block the hikes unless insurers fail to meet minimum standards for healthcare spending" (Hefland, 5/4).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.