LOS ANGELES — Insurance giant Anthem Blue Cross, the company criticized by President Barack Obama when it proposed raising rates for Californians by as much as 39 percent, withdrew plans for the proposed hike Thursday.
Anthem made the decision after an independent audit determined the company’s justification for raising premiums was based on flawed data, state Insurance Commissioner Steve Poizner said.
The decision also came one day after Anthem’s Indianapolis-based parent company, Wellpoint Inc., announced its first-quarter earnings soared by 51 percent.
Anthem said separately it will file a new application for a rate increase with the California Department of Insurance and the Department of Managed Health Care, perhaps as early as next month. It added that any errors in its original application were inadvertent.
“The current application that was withdrawn today was just flawed,” Poizner said during a conference call with reporters. He added that it contained mathematical errors and in some instances double counting of data.
Neither Poizner nor Anthem officials said just how big the insurance giant’s next proposed increase would be.
But Poizner, who is seeking the Republican nomination for governor, said he expected it would be substantially less than the original.
“You can count on this,” he said. “A 25 percent average rate increase up to a maximum of 39 percent rate increase, that’s not going to happen in California.”
