WellPoint Rate Hike Brings Calif. Probe

Even UnitedHealth Group (UNH) only had a group health profit margin of 3.3%. Losses at some subsidiaries masked the largest margins of any insurer at others. UnitedHealthcare of Colorado reported a health margin of over 29%.

These margins suggest that it is unlikely any investigation by California will result in a finding that the margins are excessive. Insensitive as it might appear to be raising rates by large margins, up to 40% according to a report in the Los Angeles Times, it could be that it can be justified.

California, unlike every other state, doesn't release sufficient details of its registered insurance companies to examine the profitability levels. It is, therefore, impossible to establish the precise margins that the insurer operates with or the appropriateness. In the meantime, Poizner did want to remind Californians that they do have over 70 insurers from which to choose.

-- Reported by Gavin Magor in Jupiter, Fla.

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