Segregation, not good in race relations, not good in health care

Health Insurance giant Anthem Blue Cross said it was raising rates on thousands of individual policyholders in California because the cost of their medical care exceeded the premiums they paid last year.

At the same time, other parts of Anthem reaped a profit. A Times analysis of the company’s regulatory filings shows that $525 million in Anthem’s earnings in 2009 was shipped to its corporate parent WellPoint Inc. The analysis was not disputed by Anthem.

Anthem Blue Cross has been so profitable that, since WellPoint acquired it in 2004, it has contributed more than $4.5 billion to the parent company’s bottom line.

Medicynical note: These hikes reveal the insurer’s strategy of segregating patients into risk groups. It allows Anthem to selectively raise rates on those who cost them more. So if you have a small group with a few patients with illnesses your rates will go up. If you are an individual buying health insurance you rates go up if you have illness, frequently to the point that you can’t afford the coverage. The rate hikes are designed to do just that.

Quite a system. Insurer’s can systematically extinguish their risk. Patients who need the coverage most are priced out of the market. They are forced to bankruptcy, government programs, and “free” ER use–the republican health plan.

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