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Blue Cross of California has been under fire recently for the way they handle their claims – from policyholders and politicians alike. Just last week, the state announced plans to hold a public hearing in Los Angeles to see how the company has lived up to promises that it made back in 2004 as part of a $21B acquisition of Blue Cross of California’s parent company, Well Point Health Networks, Inc. by Anthem, Inc. The company is now called Well Point, Inc.

As part of that agreement, the company promised to do better by insureds, but is now imposing fee reductions on doctors and increasing policyholders’ premiums – exactly what regulators did not want to happen. Unfortunately for Blue Cross, that’s just the beginning of their troubles. The state has ramped up its efforts concerning the company’s actions, including:

• A recent announcement of the results of an investigation in which the company mishandled over half of the claims files from 2004 and 2005 which were reviewed by the state.
• An investigation into whether a $950M payment Blue Cross made to Well Point in the spring of 2007 violated the state’s terms on the acquisition.
• An investigation into why the company paid out $1.3 B in 2006 for claim processing that should have been for medical care.
• Issuing the company a $1M fine in March of this year after finding that many of Blue Cross’s policy cancellations violated state law.

All in all, it doesn’t appear that the company has kept their word.

Healthcare is a hot button

Health care insurance is a hot button these days. It is one of the major issues with presidential candidates in the 2008 election and is the subject of Michael Moore’s new film, Sicko, which is gaining national attention. As you might have guessed, the issue is even hotter in California. Here’s what’s going on:

• The California Senate Health Committee recently heard a measure that would require health insurers to justify rate increases and profits and transfers to out of state companies.
• Several California consumer groups launched a website last week to highlight the healthcare crisis
• Governor Schwarzenegger has proposed that insurers must spend at least 85% of their revenue on healthcare instead of keeping it as profits.

It seems that politicians have joined consumers in their desire to have insurance companies cover the claims for which they’ve promised coverage. Only time will tell whether or not universal healthcare will become a reality with the new Administration, but what’s happening in California is a start.