Obama Administration Attacks Health Insurance Company For Sound Business Practices

Anthem Blue Cross is a financially sound health insurance company. Unfortunately, the company is hiking premiums for its customers and the Obama administration is demanding that the company justify the hikes.
The Obama administration called on Anthem Blue Cross on Monday to justify its controversial new rate hikes of as much as 39% for individual policyholders, saying the increases were alarming at a time when subscribers are facing skyrocketing healthcare costs.
In a letter to the company’s president, Health and Human Services Secretary Kathleen Sebelius voiced serious concern over the rates, which go into effect March 1 for many of the insurer’s estimated 800,000 individual policyholders. …
“With so many families already affected by rising costs, I was very disturbed to learn through media accounts that Anthem Blue Cross plans to raise premiums for its California customers by as much as 39%,” Sebelius wrote to company President Leslie Margolin.
“These extraordinary increases are up to 15 times faster than inflation and threaten to make healthcare unaffordable for hundreds of thousands of Californians, many of whom are already struggling to make ends meet in a difficult economy.”

Make it clear that this attack on Anthem by Obama and Sebelius is blatant political grandstanding, per the article this letter managed to make its way into the media before it was ever received by Anthem.
Regardless, Sebelius demands to know why rates are going up but she answers her own question in her letter. Health insurance premiums are going up because health care costs are going up.
We can argue and debate about why health care costs are going up, but the simple fact of the matter is that they are going up. And in order to remain fiscally solvent, insurance companies must adjust premiums accordingly. Because unlike the federal government, the private sector cannot live in a fantasy world were outlays aren’t in any way correlated to income.