Some Truths About Wellpoint's 39% Health Insurance Rate Increase in California

Prior to Obama's Health Care Summit, the Democrats were up in arms and were quick to repeat that health care reform was needed to keep bad health insurers from jacking insurance rates up by 39%; as was the case with Wellpoint Anthem Blue Cross in California. But, the 39% is a political exaggeration that is being used, not to control the health insurers, but, instead, takeover health care in America.

It is true that Wellpoint will raise "some" insurance premiums by 39%. But, the operative word is "some" and not all; as the Democrats would have you believe. As it is, they will raise premiums by an average of 25% which, too, is still very high; but, significantly lower than the exaggerated claim by the Democrats.

What people seem to forget is that health insurance is a highly regulated activity in all 50 states; with extremely liberal California being one of the most avid regulating entities. For that reason, you should know that Wellpoint didn't just raise their rates without getting prior approval from the State of California's Insurance Commission.

Since 2007 and the beginning of the recession, Wellpoint's profits had been falling. From 2007 to 2008, their profits fell nearly 40%. But, by the end of 2009, Wellpoint's profits were actually double that of 2007. Therefore, the need for a rate increase was being distorted by Wellpoint and, apparently, the California Insurance Commission fell for it; hook, line, and sinker.

In typical fashion, the Democrats love to use "extremes" as an example of why they should do something. But, in reality, all extremes are hardly the norm and the use of them is more theatrics than reality. Probably the worst case of using extremes was when Rep. Louise M. Slaughter told a story where a woman was forced to use her dead sister's dentures because she didn't have insurance (Click to See Full Story: HEALTH: Slaughter’s story goes national ). Of course, the reality is that we don't have a rash of people running around with the dead people's dentures in their mouths. More importantly, most health insurance doesn't cover dental. So, even if the Democrats do pass health care reform, that woman will still have to wear her sister's fake teeth.

For sure, Wellpoint's rate increase, by any measure, is totally out of line. However, under the current state-by-state regulation of health insurance providers, it is up to the State of California to come down hard on Wellpoint for distorting it's earnings numbers in an attempt to justify an outrageous rate increase. Also, the Democrat's attempt to portray this single incident as the "norm" in the industry is also out of line and irresponsible. They, too, should be punished by being thrown out of office on their ears in November's mid-term elections.