Brian Sassi, head of WellPoint’s consumer business unit, justifies the company’s planned California individual premium price increase in a letter to HHS Secretary Kathleen Sebelius:
In 2009, affordability concerns led a high proportion of Anthem individual members to switch from higher-cost products to lower-cost products, resulting in an average 2009 premium increase after product migration of 2 percent, considerably lower than the average rate increase of 13.8 percent initially reported in 2009. Meanwhile in 2009, the average claims per member increased by 8 percent, dramatically more than our premium increase of 2 percent. The fact that the weak economy caused more people to move to lower-cost options in 2009 contributed to the fact that Anthem’s individual business in California operated at a loss during 2009.
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