She said the increases would be tough for many customers but were necessitated by soaring medical costs.
In prepared testimony for a House investigative subcommittee, Angela Braly, president of WellPoint Inc., blamed the increases on the growing price tags for hospital care and pharmaceuticals. She also cited the ailing economy, which has caused many younger, healthier people to save money by dropping coverage, leaving her company covering an older, sicker population.
"Raising our premiums was not something we wanted to do," Braly said. "But we believe this was the most prudent choice."
WellPoint owns Anthem Blue Cross, whose plan to boost rates in California has made it a poster child for Democrats arguing that the nation's health system must be overhauled. Wednesday's hearing comes a day before President Barack Obama hosts bipartisan congressional leaders for a daylong, televised discussion of health care, a session he hopes will provide new momentum to Democrats' stalled legislation.
It also was occurring the same day the House planned to vote on legislation repealing the health insurance industry's exemption from federal antitrust laws. Obama and Democrats say the measure would help spur competition, but analysts say it would have little impact on how insurers do business because they already are regulated by states.
Consumer advocates say the hike proposals show how little control states have over insurerers.
"About half of all states don't have the regulatory power to keep skyrocketing health insurance premiums in check. In many states, insurers are simply required to file their rate plans with the state but regulators have little or no authority to challenge premium hikes," said DeAnn Friedholm, the campaign director for health care reform for Consumers Union.
Friedholm added, "In California, for example, no state agency has the authority to challenge health insurance rates except in very limited situations. Even in those states that do require rate review, regulators may not have the resources they need to take on powerful insurers."
In prepared testimony, Jeremy Arnold of Los Angeles said Anthem informed him last month that his rates would grow by 38 percent to $319 a month, which could force him to take a less expensive policy with higher deductibles and hope he doesn't get sick.
"Hope is not an adequate health care policy," Arnold said.
Braly expressed some sympathy.
"Clearly, we understand that rate increases create a challenge for many of our members," Braly said. "However, it is important to know that many of our members often have a choice of coverage."
She said the company was dismayed when the health overhaul debate in Washington turned into "an attack on the health insurance industry," which she said was "very misleading."
After its rate announcement generated criticism, Anthem said it was postponing the increase from March 1 until May 1 while it is reviewed by California regulators.
In a report earlier this month, the Obama administration cited WellPoint's reported profit of $2.7 billion in the fourth quarter of last year as evidence that insurers' rate boosts need to be curbed.
