Health Insurance Industry Profits Soar, Premiums For Americans Increase

Today, the Los Angeles Times reported that Californians who have purchased individual health insurance policies with Anthem Blue Cross and Blue Shield can expect to see their premiums increase between 30% and 39% this year alone. Moreover, the company has announced they are changing their practice of adjusting the rates on an annual basis and now reserve the right to adjust the premiums more frequently.

In a statement defending the change, Anthem Blue Cross said:

"We understand and strongly share our members' concerns over the rising cost of healthcare services and the corresponding adverse impact on insurance premiums," the company said in a statement.

"Unfortunately, the individual market premiums are merely the symptoms of a larger underlying problem in California's individual market -- rising healthcare costs."

Blaming rising health care costs is an interesting gambit -- given the parent company of Anthem Blue Cross is WellPoint, which reported a staggering $2,740,000,000 in profits for the fourth quarter of 2009 alone -- eight times more than the last quarter of 2008 -- and more than $4,750,000,000 for all of 2009. In fact, the company reaped these record profits even as it lost more than 1.4 million members. Other health insurance company figures recently released show the same trend:

Earlier this week, the Centers for Medicare and Medicaid Services (CMS) released a report showing the largest increase in health care spending in 50 years and estimates that spending on health care is projected to grow to 19.3% of the US economy by 2019, or account for 1 of every 5 dollars spent. The need for health insurance reform could never be more clear.