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The Obama administration has asked state regulators to double-check premium hikes from Indianapolis-based health insurer
WellPoint Inc. after an audit found problems with proposed California increases.
U.S. Secretary of Health and Human Services Kathleen Sebelius said in a letter to state governors and insurance commissioners
they should re-examine any WellPoint rate increases in their states "to the extent you have authority to do so."
Sebelius asked them in the letter, sent Tuesday night, to check whether any "mistaken assumptions" were made in
their states.
"Even small errors can mean unaffordable premiums for policyholders," the letter said.
Last week, WellPoint's California subsidiary, Anthem Blue Cross, withdrew plans for individual insurance premium increases
that averaged about 25 percent after state Insurance Commissioner Steve Poizner said an independent audit found the hike was
based on flawed data.
Poizner said the application for rate increases—which would have stretched to 39 percent for some customers—contained
mathematical errors and double counting of data.
WellPoint said in an e-mail Wednesday it believed the miscalculation was unique to its California individual insurance business.
"Further, we believe that our rates are in compliance with statutes and regulations in the states that we do business,"
the statement said.
WellPoint, the largest health insurer based on enrollment, runs Blue Cross Blue Shield plans in 14 states and Unicare plans
in several others.
WellPoint's planned California rate increase first drew criticism from President Obama and Sebelius in February. They
used the proposed hike to illustrate the need for a health care overhaul to help cover millions of uninsured people.
WellPoint has said they were forced to raise rates in part because of the rising cost of care.
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