WellPoint’s premium rate hikes reinvigorated the Democrat’s health care reform push and provided fresh evidence of the need to control rising health care costs and improve the affordability of insurance. But Anthem Blue Blue Cross Blue Shied in California — a subsidiary of WellPoint — is now canceling the scheduled increases after regulators “found that the company overstated future medical costs used to justify increases” and committed numerous other methodological errors. “Correcting the flaws could drop the rate hikes to an average of 15%,” the analysis concluded:

“There will be no rate increases at this point,” Insurance Commissioner Steve Poizner said. “The application was in error. There were all kinds of methodological mistakes.” [...]

WellPoint acknowledged the errors in its rate filing, calling them “inadvertent miscalculations.” Anthem, it said, would file new rate increases for individual policy holders in May, but a spokeswoman declined to say exactly when or indicate how large they would be. …The report from the actuarial consulting firm, Axene Health Partners of Winchester, said that, among its errors, Anthem overstated medical costs by inflating the effect of aging. Reworking the numbers could reduce the average rate hike by 10.2%, it found.

For months, WellPoint, along with AHIP, insisted that growing provider costs and the departure of healthier people from the risk pool necessitated the steep increases, but this report helps explain why the rates were so much higher than medical inflation. Even if we bend over backwards and assume that the company was inadvertently making mistakes without checking its math that doesn’t bring us to a comfortable solution. The sheer carelessness of committing “methodological errors” that cost beneficiaries thousands of dollars is appalling, particularly for an industry that spends millions convincing the public it’s moving to contain health care spending.

In too many states, regulators don’t force insurers to live up to their own hype and as a result companies don’t have any incentive to double check their figures or submit lower increases. Democrats have already seized on the story to argue for a national rate review board that could reject unreasonable increases in states that lack such authority, but I suspect that any real action will occur on the state level. State regulators must begin auditing insurers and literally reviewing the math behind premium increases.

Consumer Watchdog has also put out a release urging Congressional investigators to look into “whether Anthem Blue Cross executives made misrepresentations to Congress in testimony claiming the company’s rate increase was actuarially sound,” arguing that if Americans are required to purchase coverage, insurance companies should be required to show that the premiums they charge are reasonable.

If they don’t, more stories about insurer antics and abuses could very will bring about the kind of public option and rate review provisions that Democrat’s weren’t able to stuff in this health care bill.

Earlier this year, Sen. Chuck Grassley (R-IA) took credit for parts of the health care law he opposes and today, during an interview with NPR, House Minority Leader John Boehner (R-OH) also highlighted the Republican ideas in the bill, while promising to repeal it:

INSKEEP: As you know, Democrats are already pointing to things that are changing in America because of this bill. They will point to the fact that college seniors, who would have been kicked off their families’ insurance plans when they graduated, will get to stay on. Insurance companies are now saying they’re going to end the practice of “rescission,” where they take, or at least modify…

BOEHNER: Both of those ideas, by the way, came from Republicans, and are part of the common sense ideas that we ought to have in the law.

INSKEEP: Well, are you going to repeal those two specific things?

BOEHNER Uh, what I want to repeal are the other 158 mandates, commissions, boards that set up all the infrastructure for the government to take control of our health care system.

Listen:

If Boehner is unwilling to repeal the Republican ideas in the health care law, he’ll have to preserve a good deal of the legislation, which at its core is built on the Republican principles of personal responsibility and managed competition.

His refusal to call for a full repeal, moreover, could cause a rift with the more conservative members of the Republican party. Last week, for instance, Rep. Steve King (R-IA) — who has proposed a bill calling for complete repeal — warned leadership that “if we leave any component of it in there, it has, it’s just become a malignant tumor that’s attacking our liberty and our freedom and it’s diminishing our aspirations and it saps our overall productivity as a nation,” King said. “If we can’t come to that conclusion, then I want some new people to come help me.”

Currently, repeal legislation has has no more than 62 co-sponsors in the House and 20 in the Senate.

Last month, the Arizona legislature eliminated funding for KidsCare, the state health program covering 38,000 children of the working poor, to help close the state’s $5 billion budget gap. By ending the program, the state forfeited billions of dollars in federal matching funds and left uninsured children with few health care options.

But the new health care law — which Arizona is challenging in court — has led them to re-think this decision. The law requires states that want to continue receiving federal health care funds to maintain eligibility in Medicaid and CHIP. And so yesterday, as the legislative session came to a close, the Republican controlled legislature did a do-over and restored state funding to the program so that it can benefit from the increased federal funds under health reform. East Valley Tribune explains:

What happened in the interim, though, was President Obama signed new health care legislation. That law eventually will provide extra cash to help Arizona with health care costs. But that law also says states must maintain their health care programs as they were the day he signed the bill, not only to get future increases but even to maintain existing federal aid. Legislative budget staffers pegged the loss at $7.8 billion a year.

Arizona is trying to preserve the federal dollars from the very health care reform it thinks is unconstitutional. Gov. Jan Brewer (R-AZ), in fact, “urged legislators to restore the programs” and plans on signing the legislation into law, proving once and for all that the money states will receive under reform will trump any ideological repeal effort.

As Emma Sandoe explains in this report, states that choose to opt out of the Medicaid expansion will lose billions of dollars in federal funding and will be no closer to grappling with the strained public health programs in their states.