Something interesting is happening in California. Anthem Insurance Company is delaying its massive insurance rate increase. Anthem insurance company has been under fire this week because they are going to invoke an average price increase of 25 percent on about 700,000 insurance customers who purchase their own coverage. For some it would be as high as 39 percent. Anthem is getting grief all the way up to the White House.
Anthem has agreed to delay implementing their rate increase from March 1 to May 1.
Insurance Commissioner of California Steve Poizner has been working with Anthem Insurance to determine if they are living up to a law that was passed in 2006. This says that an insurance company must spend 70 cents of every premium dollar on medical care.
I personally think that is whimsical says Los Angeles Business Attorney Steven C. Peck. That means your expenses and administration come out of 30 cents on the dollar. Companies can do that if the expenses go down after the first year but I sincerely doubt that 70 cents on the dollar is realistic. And that can cause this type of problem.
The commissioner has brought in an outside firm to examine the summations of Anthem. He is skeptical that they have come to the right conclusions.
If they did not live up to the law then the Commissioner can make the company reduce the rates at risk of losing their license to sell in the state.
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Contact Steven Peck's Premier Legal Toll free at 1.866.999.9085 to talk to an experienced California Business Lawyer and visit us on-line at www.premierlegal.org.
