Anthem lowers rate requests

Instead of premium increases of up to 39 percent, Woodland Hills-based Anthem Blue Cross is now asking for a maximum rate hike of 20 percent on individual policies. Average increase would be 14 percent. The pullback comes after numerous errors were found in the original rate proposal. From the LAT:

"The rates do not cover our costs and are not going to be sustainable over the long term, but it made sense to move ahead," said Brad Fluegel, WellPoint's chief strategy officer. "Given the environment, it was in the best interest of everyone to get this behind us and move forward."

Policyholders and consumer advocates who assailed Anthem's initial rate hikes also blasted the new increases as excessive. They question whether Anthem will try to recoup its losses in subsequent rate increases. The company expects to impose a new round of rate hikes in the first half of 2011.

The California Department of Insurance now has 30 days to review the rate request. Keep in mind, however, that in California health insurers can raise rates without state approval. So be prepared to pony up.