Anthem Blue Cross rolls back rate increase In response to pressure from California regulators, Anthem Blue Cross agreed to a slightly lower rate increase for about 630,000 individual policyholders that will save consumers an estimated $54 million. Anthem, a unit of Indianapolis insurance giant WellPoint Inc., had sought to raise rates an average of 18% beginning Feb. 1. California Insurance Commissioner Dave Jones said Thursday that the company had agreed to reduce the average increase to 14% after regulators reviewed Anthem's rate filing. Some Anthem customers will still see their premiums rise as much as 25% under this agreement with the state. "Health insurance premiums continue to increase substantially, and health insurance has become unaffordable for far too many Californians," Jones said. I appreciate that Anthem Blue Cross has agreed to lower these rates so policyholders will pay $54 million less than they otherwise would have. The state cited a number of factors that led it to deem Anthem's proposed rate hike excessive, including unsubstantiated estimates of expected medical costs. Insurance officials review these rate filings, but they don't have authority to reject them for being unreasonable as they do for property and auto policies. Voters will get a chance to change that in November 2014 with a ballot measure that would give the California insurance commissioner the power to approve or reject health insurance rate increases. Anthem said it plans to issue refunds or premium credits to customers who paid the higher rates this month. It also said policyholders who either dropped or changed coverage because of the planned rate increase would be able to reinstate their prior benefits without having to reapply. Even with these higher rates, Anthem said, it expects to lose money on its individual health insurance business in California this year, primarily because of rising medical costs. "This agreement with the Department of Insurance and rate filings by our competitors reinforce the fact that escalating healthcare costs are an economic reality faced by the entire industry," said Anthem spokesman Darrel Ng. A separate rate hike of 15%, on average, for an additional 100,000 Anthem policyholders remains under review by another regulator, the California Department of Managed Health Care. These increases don't affect most Californians, who are insured through employer group plans. Anthem is the dominant player in California's individual insurance market with a 43% share of the market in 2011, according to Citigroup research. Nonprofit Kaiser Permanente was second with a 25% market share. The federal healthcare law aims to dramatically change how people buy their own health coverage starting in January. Californians will be able to shop for standardized coverage in a state-run exchange called Covered California and check whether they are eligible for federal premium subsidies or coverage under an expansion of Medi-Cal.