The recent proposal by Anthem Blue Cross Blue Shield in California to raise its rates by 39 percent for 2010 demonstrates what has been discussed in the health-care debate and why we need health reform now.

An estimated 800,000 California Anthem customers would be affected by the proposed rate increase. Yet Anthem posted a $2.8 billion profit for 2009 just the month before it sent out letters to its customers announcing the rate hike.

The average Anthem family health-care plan costs $800 a month. For the employed, this cost is split between the employer and employee. The self-employed and unemployed bear all the cost.

So an average $800 monthly plan increases to $1,112 per month per customer, which raises the company’s profits greatly ($312 times 800,000 customers equals $3 billion a year).

What is Anthem going to do with its $2.8 billon profit? Distribute it to shareholders, many of whom do not live in California, or line the pockets of some large Wall Street investment company? You can do a lot with $2.8 billion to improve health-care resources in a cash-strapped state like California.

People who have lost jobs cannot afford $1,112 a month in health-care costs. It’s more than the unemployment checks these people get each month, and it nearly doubles the contribution businesses have to pay to cover their employees.

Such unnecessary and uncompassionate actions by health insurance companies also have a de-stimulative effect on our economy and will delay our nation’s ability to recover from this deep recession.

For the employed, the increase takes away consumer spending that really hurts our economy, and California businesses will have a harder time reinvesting and creating jobs. Some businesses may have to reduce their employee coverages, opt for plans with larger deductibles or suspend offering health-care plans to their employees altogether.

This is why health insurance reform is necessary.

Tim Maroney

Pinehurst