Big Health Care Costs Make Consumers Ill

In Los Angeles, skyrocketing health care costs have a lot of people feeling sick.

Anthem Blue Cross, California's largest private health insurer, plans to raise rates on 700,000 households in the state. As of May 1, 2010, most monthly premiums would jump 25 percent with some climbing as much as 39 percent.

Anthem Blue Cross customer Ilene Lisak is seven months pregnant, but she wasn't expecting this letter from Anthem raising her premium from $525 to $708 per month, a 34.8 percent hike.

Nationwide, major insurance companies want to raise premiums by 20 percent in Oregon, 23 percent in Maine, 24 percent in Connecticut and a whopping 56 percent in Michigan, according to the U.S. Department of Health and Human Services.

President Obama wants the government to be able to block large premium increases and demand rebates for consumers.

But insurance companies say they have to charge more because medical costs keep going up and fewer people are paying premiums after losing their jobs, reports CBS News correspondent Ben Tracy.

"Hospital costs are going up over 11 percent. Pharmaceutical costs are going up over 13 percent," says Brad Fluegel, executive vice president at Wellpoint, Inc. "That's what we really need to be focused on."

Wellpoint says last year it received an estimated $525 million in profit from Anthem.

Monday California's insurance regulator announced 732 violations by Anthem, including late payment of claims and misleading consumers.

"We want them to, number one, pay all claims on time. Number two, pay all claims completely," says California insurance commissioner Steve Poizner.

Lisak just wants to focus on picking out her baby's name. "You know, things that bring you joy," she says. "This is not joyful."

Not when you can't afford insurance but can't afford to live without it.
  • Ben Tracy

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