February wasn’t a good month for Anthem Blue Cross. While the health insurer was defending itself in Los Angeles Superior Court for refusing to allow a policyholder to receive a liver transplant at an out-of-state/out-of network hospital because it cost too much, a Los Angeles Times analysis of the company’s regulatory findings revealed that since 2004 Anthem increased it’s parent company’s profitability by $4.2 billion. See Lawsuit Targets Anthem Denial Policy, Los Angeles Times,and “Anthem Profit Shifts Scrutinized,” Los Angeles Times.
Anthem is also being investigated by the California Department of Insurance for more than 700 violations in the past three years for failing to pay medical claims on time and misrepresenting policy provisions to its policyholders. And to top it off, President Obama’s revised healthcare overhaul proposal, which includes federal authority to regulate premium increases, appears to be in response to Anthem’s decision to raise premiums for individual policyholders up to 40 percent. See “Anthem is Accused of Breaking Laws,” Los Angeles Times, http://www.latimes.com/business/la-fi-anthem-claims23-2010feb23,0,186309.storyand “Obama Plan Would Curb Health Insurers on Rate Hikes,” Los Angeles Times.
Hmmmm… if the Department of Insurance proves that Anthem violated state law 700 times, and the insurer were have to pay up to $10,000 per violation. That’s $7,000,000, but when you make a $4.2 billion profit, that merely amounts to part of the cost of doing business, not a punishment for ignoring the law. Toyota is probably wishing it had gone into the health insurance business.