The Los Angeles Times (2/12, Helfand) reports that WellPoint, Inc., "offered a spirited defense" of premium increases "for customers with individual health insurance policies in California," by its subsidiary Anthem Blue Cross, saying that the increases "reflect soaring medical costs and an exodus of healthy consumers from its ranks." The firm also said that "less than a quarter" of its policy holders will have rate increases at the oft-cited level of 39%, explaining that "the average will be about 25%." In response, HHS Secretary Kathleen Sebelius said, "It remains difficult to understand how a company that made $2.7 billion in the last quarter of 2009 alone can justify massive increases that will leave consumers with nothing but bad options."

        The AP (2/12, Murphy) reports, "Sebelius had called the increases 'extraordinary' and told the insurer in a letter she was disturbed to learn about them. She also has demanded that the insurer answer questions about how much of a profit it will make from the hike." WellPoint executive Brian Sassi said that "the Anthem Blue Cross unit at the heart of the inquiry lost millions in 2009."

        The New York Times (2/12, A21, Seelye) reports that Secretary Sebelius "declared the explanation inadequate." The company's rate increases are said to have "galvanized some Democrats in Washington."

        Politico (2/12, Marr) reports on WellPoint's letter, adding that "Sebelius shot back that the company's explanation didn't jibe with its financial statements." CQ HealthBeat (2/12, Reichard, subscription required) also notes the firm's defense of its premium increases, and says, "Sebelius wasn't buying it."

        In a separate article, the AP (2/12, Murphy, Alonso-Zaldivar) reports that President Obama is using WellPoint as "Exhibit A in his campaign to revive the healthcare overhaul." Noting criticisms of the firm by Secretary Sebelius, White House spokesman Reid Cherlin, and Senate Majority leader Harry Reid (D-NV), the AP notes, "Whether it will be enough to re-ignite the sputtering healthcare legislation, remains uncertain," as the bills "are stalled" because "Democrats in the House can't accept the healthcare bill that Democrats in the Senate have produced, and vice versa." The rate increases "could help Obama make his case that Republicans need to come to the table on healthcare." Meanwhile, "Sebelius ordered a federal inquiry." Reuters (2/12, Heavey) also reports the story.

        ABC News (2/11, Miller), on its "Political Punch" blog, reported, "Anthem Blue Cross responded to the letter from Health and Human Services Secretary Kathleen Sebelius in which she asked the California insurance company this week to 'provide a detailed justification' for their 39% premium hike." The article does not cover Sebelius' response, but noted, "President Obama in recent days [has] used this California insurance company as an example of why healthcare reform is so urgent."