Anthem Blue Cross, WellPoint’s California subsidiary, has told 700,000 of its individual health insurance customers that their premiums will rise 39 percent. The President and other proponents of ObamaCare think this news helps make their case that insurance companies need to be reined in. They note in particular that WellPoint had a $2.7 billion profit in the last quarter of 2009.

But, points out the Wall Street Journal, Obamacare proponents are ignoring the role of regulations here. Anthem lost $58 million last year insuring Californians who elect to continue the coverage they had under a former employer. Anthem has no choice but to cover that population and to cover it under rates set by state regulators. Increasing premiums on individuals not covered by those regulations, says Heritage fellow Robert Book, is WellPoint’s attempt to stem the losses on its California business.

Further, says Book, we should expect the same price contortions on a national level if ObamaCare passes. Both the House and the Senate health care bills give bureaucrats even greater power than California regulators possess to determine benefit levels and control prices. And both bills prevent insurers from discriminating against sicker patients. Under that set-up, healthier individuals will forgo insurance until they get sick. And if the insurance pool gets sicker, then premiums must spike nationally if insurers are to remain in business under ObamaCare.