On the Front Lines of the Culture Wars

Insurance customers in California should thank God for David Axene. A scheduled 39 percent rate hike was averted by the mathematician who from his hospital bed discovered a major insurer had made serious errors in predicting its costs.

David Axene

The 60-year-old will tell you candidly that he couldn’t have done it without God’s help.

“David Axene ,” writes Duke Helfand of the Los Angeles Times, “was flat on his back in a hospital bed with a swollen left leg. His kidneys had shut down. His blood pressure had plunged. Doctors pumped him with potent antibiotics to stave off a deadly infection

“Yet there he was sifting through spreadsheets on his laptop, cradling his cellphone to his ear, waving off doctors to finish another conference call.”

California’s top insurance watchdogs had asked Axene to go through a mountain of paperwork from Anthem Blue Cross, trying to find flaws in the company’s request for a massive rate increase. Anthem’s plan to impose higher premiums had incurred the wrath of California consumers and politicians. President Obama heard of the furor and cited Anthem’s planned increases as he promoted his healthcare plan.

California insurance regulators are required by law to accept insurance company rates as long as a company can show it used at least 70 cents of every dollar in premiums to pay medical claims. So, Axene was asked to look over the Anthem Blue Cross numbers.

Blue Cross logo

He prayed. His is a deep, personal faith. He’s a preacher’s son. Raised believing in the importance of faith, love and hard work, he says God blessed him at an early age with a natural gift for numbers. He dreamed of becoming an aeronautical engineer, maybe for NASA. However, in the early 1970s, jobs were scarce for college graduates with degrees in physics and applied mathematics. Axene got a job at a gas station. A friend told him Travelers Insurance Company was hiring. He applied for a sales position, but the recruiter’s assessment didn’t exactly fill him with hope: “Axene, you couldn’t sell your way out of a wet paper bag.”

However, he asked if Axene had ever considered becoming a health actuary – using his math skills to calculate insurance rates by evaluating life expectancies, medical histories and other risk factors.

Axene began a career with some of the nation’s most influential accounting and actuarial firms, including Ernst & Young. There, he supervised 45 employees. However, in 2003, Ernst & Young downsized, leaving Axene, then 53 years old, unemployed. He started picking up freelance jobs.

When he got the call from the California regulators, he sorted though more than 1,000 pages of documents and spreadsheets in search of errors. In the midst of the investigation, he became sick, but still logged in 66 hours of work from a hospital bed while recovering from surgery.

Finally, he found a key error. Anthem had double-counted a critical factor and made a handful of other mistakes. The discoveries had big implications. Anthem had to withdraw its rate increase. 

Axene says he relied not only on his math skills but also on God.

“He prayed for insight and wisdom each morning before launching into another round of numbers sleuthing, often drawing inspiration from a worn Bible he keeps in his office,” reports Helfand.

“I’m one of those crazy people who believes that God listens to our prayers,” Axene says. “When you’re a numbers guy and things don’t appear to be consistent, it annoys you.”

So, when he caught the mistakes, “it was sort of like finding the Holy Grail. It opened up a big can of worms.”

Now new clients are calling. Axene is thinking of expanding.

“He slew the giant,” says Anthony Wright, executive director of Health Access California, a consumer group in Sacramento. “It was David versus Goliath, except David was armed with a calculator rather than a slingshot.”