Record Profits Don’t Stop Health Insurer’s Record Rate Hikes
Last week, Anthem Blue Cross—whose parent company WellPoint posted a record $4.7 billion profit in 2009—announced it was gouging even more money from its 800,000 California customers by raising premiums as much as 39 percent.
Deborah Burger, RN, and co-president of the National Nurses United (NNU), says Anthem Blue Cross’s ”disgraceful behavior may be particularly offensive,”
but it is not out of character for an industry engages systemically in price gouging and denial of care.
At a press conference this week, President Obama told reporters Anthem’s rate hike makes the need for health care reform even more clear.
if we don’t act, this is just a preview of coming attractions. Premiums will continue to rise for folks with insurance; millions more will lose their coverage altogether; our deficits will continue to grow larger.
On Tuesday, Health and Human Services Secretary Kathleen Sebelius said in a White House blog post that “too many Americans are at the whim of private, for-profit insurance companies.” She said those companies also are
raking in billions in profits each year, while policyholders struggle to make ends meet in this tough economy. Insurance companies can raise premiums or slash benefits, and there’s not much families can do about it, especially if they have preexisting conditions that would make it hard to get other coverage….What’s happening in California can happen in any state.
Keep in mind the figure $4.7 billion in profits and then see if you or anyone else can swallow Anthem’s claim that the bad economy has forced many people to drop their health insurance coverage and in turn Anthem is being forced to raise rates by 39 percent. It’s not flying. Even with WellPoint’s 4 percent drop in customers in 2009, its profits—the $4.7 billion—jumped by 90 percent over 2008. (See chart above.)
Sebelius and congressional leaders are demanding answers. In a letter to Anthem President Leslie Margolin, Sebelius says the company must provide justification for the rate hikes.
The extraordinary increases are up to 15 times faster than inflation and threaten to make health care unaffordable for hundreds of thousands of Californians, many of whom are already struggling to make ends meet in a difficult economy.
Your company’s strong financial position makes these rate increases even more difficult to understand. As you know, your parent company, WellPoint Incorporated, has seen its profits soar, earning $2.7 billion in the last quarter of 2009 alone.
House Energy and Commerce Committee Chairman Rep. Henry Waxman (D-Calif.) announced the Oversight and Investigations subcommittee will held a hearing Feb. 24 on the rate hike. In a letter to WellPoint CEO Angela Braly, Waxman and subcommittee chairman Bart Stupak (D-Mich.) say Braly must provide the committee detailed records including:
For each year from 2005 to 2008, a table listing, as applicable, premium revenue, claims payments, sales expenses, other general or administrative expenses, and profits for all individual health insurance products, including an explanation of the methodology used for these calculations, for Anthem Blue Cross in California;
A table listing all proposed premium increases from January 1, 2009, through December 31, 2010, in the individual health insurance market for all WellPoint subsidiaries, including the amount of the proposed premium increase, the subsidiary, the state affected, and a detailed explanation of reasons for the increase.
This article originally appeared on the AFL-CIO blog.
Posted on 02/11/2010 • Permalink