U.S. wants health insurer to justify rate hikes
LOS ANGELES – The Obama administration Monday asked California's largest for-profit health insurer to justify plans to raise customers' premiums by as much as 39 percent, a move that could affect some 800,000 customers.
In a letter to the president of Anthem Blue Cross, Health and Human Services Secretary Kathleen Sebelius said she was very disturbed to learn of the planned increases, calling them "extraordinary."
"I believe Anthem Blue Cross has a responsibility to provide a detailed justification for these rate increases to the public," Sebelius wrote.
She said the company should also make public what percentage of customers' premiums go to medical care versus administrative costs.
In a statement, Anthem Blue Cross of California blamed the weak economy and rising health care costs for the rate hike, while pledging to reply to Sebelius' query promptly.
The rate hike "highlights why we need sustainable health care reform to manage the steadily rising costs of hospitals, drugs and doctors," the statement said.
Sebelius said Anthem Blue Cross' parent company, WellPoint Inc., "has seen its profits soar, earning $2.7 billion in the last quarter of 2009 alone."
Not counting roughly $2.2 billion it gained from the sale of a pharmacy benefit management subsidiary, WellPoint earned $536 million in the final three months of last year.
In a rare move, California Insurance Commissioner Steve Poizner is hiring an outside actuary to determine whether Anthem is abiding by state regulations and spending at least 70 percent of premium dollars on medical care as opposed to administrative costs. Poizner's spokesman, Darrel Ng, said that's the only recourse because rate hikes do not need to be approved by the state.
President Barack Obama cited the Anthem rate hikes in an interview with CBS' Katie Couric on Sunday as a reason to move forward with his health overhaul legislation, which is stalled in Congress.
"That's a portrait of the future if we don't do something now," Obama said. "It's going to keep on beating down families, small businesses, large businesses."
Health insurance analysts agreed that the rise in individual premiums will be echoed on a smaller scale in the rest of the health insurance market. Employer-based insurance and group policies are expecting 10 to 20 percent increases in the next year, said health industry consultant Robert Laszewski.
About 13 million Americans purchased health insurance through the individual market in 2008, the most recent data available.
Surges in their premiums can be explained by competing interests: Insurance companies are working to maintain earnings expectations in the face of rising costs, while rising premiums are driving healthy people to drop coverage, Laszewski said.
Individual buyers "get clobbered in an economy like this," said Laszewski. "If it becomes unaffordable for (policyholders) and they're healthy, they tend to walk away, leaving sicker, more expensive patients on the policy."
Anthem notified customers that rates would go up beginning March 1 and might start increasing more frequently than the usual annual increases. The increases ranged from 30 percent to 39 percent.
The company has declined to provide details on the rate increases. It's also not clear whether customers in other states are being affected.
Health care department breaches privacy
The Department of Health Care Services said Monday it has breached the privacy of 49,352 people who receive adult day-care services from the state.
The department said that letters it mailed a week ago to 49,352 Medi-Cal beneficiaries wrongly included each patient's Social Security number on their address labels.
The department said the security incident took place Feb. 1, but it was only told about it on Thursday. It started to notify the 49,352 beneficiaries about the problem over the weekend.
"At this point, there is no evidence that unauthorized parties have acquired or accessed beneficiary personal information," the department said in a prepared statement.
DHCS officials said they regretted the breach, which has so far cost the state $50,000. It blamed itself and a private vendor for the problem mailings.
Karen Johnson, a deputy director at the department, said officials are investigating and will figure out who pays for what when they get the findings.
On Saturday, the department said it began sending notification letters to the 49,352 beneficiaries alerting them to the security breach.
The letter also advised beneficiaries how to protect themselves from identity theft by contacting the three credit reporting agencies and placing a fraud alert on their files.
Department of Health Care Services Director David Maxwell-Jolly said the breach occurred when officials sent a notice to beneficiaries, entitled: "Notice of Change in Medical Necessity and Eligibility Criteria for Authorization of ADHC Services."
In preparing a mailing list, beneficiaries' Social Security numbers were mistakenly included on mailing labels.
"We have implemented additional safeguards governing the release of Social Security numbers, and our mailing vendor has implemented additional quality control measures to prevent such errors from occurring in the future," Maxwell-Jolly added.
"We regret this error. We will redouble our efforts to ensure that all beneficiary information entrusted to the state is aggressively and appropriately protected," he added.
The SSNs didn't have spaces or dashes and may have appeared to be a random nine-digit number to people other than recipients, the department said.
Poizner urges Anthem Blue Cross to delay increases pending inquiry
California Insurance Commissioner Steve Poizner dispatched a letter Monday to executives at WellPoint, the parent company of Anthem Blue Cross, urging them to postpone rate increases until May 1 so an independent actuary can investigate.
California law requires health insurers to pay out at least 70 cents of each premium dollar for benefits.
"If the independent actuary concludes that Anthem's rates are not actuarially justified and do not meet the 70 percent loss ratio requirement, I will take all legal action available to me to stop the rate increase," he said.
In his letter to Angela Braly, president and chief executive officer of the Indiana-based insurer, Poizner noted the "unprecedented economic distress for consumers in America."
He said his agency has received numerous complaints "from irate Californians describing how Anthem's proposed rate increases would cripple them financially."
Anthony Wright, the executive director of Health Access California, has long been a critic of Anthem Blue Cross and its pricing practices.
"Consumers who buy coverage as individuals have no bargaining power and are at the mercy of the big insurance companies," he said Monday.
UC Davis study suggests autism risk grows with mother’s advancing age
UC Davis researchers say that a 40-year-old woman's risk of having a child with autism is 50 percent greater than a woman between of 25 and 29 years old.
The researchers' exhaustive new study also found that advanced paternal age is associated with higher autism risk only when the father is older and the mother is under 30.
The study was published today in the February issue of the journal "Autism Research." It is one of the largest population-based studies to report how each parent's age affects the risk of autism.
Advanced parental ages has been known as a risk factor. However, a UC Davis Health System news release states previous research has shown contradictory results on whether it is the mother, father or both who contribute the most to risk.
Janie Shelton, the study's lead author and a doctoral student in the UC Davis Department of Public Health Sciences, said the study challenges a current theory that identifies the father's age as a key factor in increasing the risk.
"It shows that while maternal age consistently increases the risk of autism, the father's age only contributes an increased risk when the father is older and the mother is under 30 years old," said Shelton.
Among mothers over 30, increases in the father's age do not appear to further increase the risk of autism.
Autism is a disorder that affects language and social skills. During the 1990s, according to the press release, the number of California women over 40 who gave birth increased by more than 300 percent.
The researchers obtained records for all births in the state during the 1990s. Understanding the relationship between the age of mothers and fathers and autism is crucial to understanding the cause of autism, researchers said.
The reason that having an older parent places a child at risk for autism is not known, said Irva Hertz-Picciotto, a researcher at the UC Davis MIND Institute and the study's senior author.
McClatchy High to study health center idea
McClatchy High School received a $50,000 planning grant from Kaiser Permanente to look into creating a school health center for McClatchy students and their families.
The center would be on the Freeport Boulevard campus. It would be patterned after one recently opened at Hiram Johnson High School, said Mary Shelton, the acting chief academic officer for the Sacramento City Unified School District.
District staff will hold a public meeting Wednesday at 5:30 p.m. at McClatchy High.
Shelton said the timeline for the opening depends on the district's ability to secure additional grants and community partners.