Anthem Draws California Rivals Into Fray

Anthem Blue Cross' controversial premium increases are dragging other California health insurers into the spotlight.

California Attorney General Jerry Brown subpoenaed financial records for Anthem and six other insurers doing business in the state to sniff out "possibly illegal practices." Brown, who is running for governor, says he is concerned over rate increases, which he says may not be justified. The insurers targeted are Aetna, Anthem, Cigna, Health Net, Blue Shield of California, Kaiser Permanente and UnitedHealth Group's PacifiCare. The companies have 30 days to turn over their documents.

Brown already was looking at these companies as he investigated their reimbursement practices. That inquiry follwed a union report by California Nurses Association questioning why millions of insurance claims were being rejected.

"We have been looking at these companies for a number of months and are very concerned that some of them are unjustly raising premiums and denying payment of legitimate claims," Brown says. "Not only are the rate increases devastating to Californians strapped by the economy, but in some cases, they are possibly illegal."

Of course, Brown is seizing on the brouhaha over Anthem's proposed rate hikes that include a premium increase of almost 40 percent for some individuals. The increase has gained national attention, making Anthem and its parent WellPoint Inc. the poster boys for what's wrong with the health care system. President Obama is proposing federal rate controls on insurers. WellPoint CEO Angela Braly faced a U.S. House panel this week in which her company was accused of manipulating data to win rate hikes so company execs could enjoy lavish corporate retreats and get big bonuses.

And fighting Anthem from the beginning on this rate hike is state Insurance Commissioner Steve Poizner, who is seeking the Republican nomination for governor. So it's hardly surprising Brown, a Democrat, would want a piece of the action.

"Our best attorneys are going to get to the bottom of this, and where we find violations of California's unfair business laws, we intend to stop them," Brown says.

None of this can be good for the insurance companies. So far, WellPoint has dug in its heels, though it agreed to delay the rate increases for a couple of months. This saga is far from over.