The Obama administration has already sent a sternly-worded letter to Anthem Blue Cross over the company's excessive rate increase for individual policy holders in California. How excessive? Up to 39 percent. But that's not all. Anthem Blue Cross and Blue Shield also informed their customers that they are changing their practice of adjusting rates annually, and as of now are reserving the right to raise premiums basically whenever they feel like it.
There's little beyond sternly-worded letters that the administration can do, other than something like maybe advocating strongly for some kind of legislative remedy, say in the form of serious competition to private insurers in the form of a robust public option for health insurance. But there's something Congress can do, and that's put the insurers on the hot seat and investigate. From the Speaker's blog, The Gavel:
As Secretary Sebelius pointed out, WellPoint [parent company to Anthem Blue Cross/Blue Shield] reported a staggering $2,740,000,000 in profits for the fourth quarter of 2009 alone – eight times more than the last quarter of 2008 – and more than $4,750,000,000 for all of 2009. In fact, the company reaped these record profits even as it lost more than 1.4 million members.....
Today, Energy and Commerce Committee Chairman Henry Waxman and Subcommittee Chairman Bart Stupak announced that the Subcommittee on Oversight and Investigations will hold a hearing on February 24th regarding the premium rate increases.
The hearing, conveniently, will be held on February 24, the day before the bipartisan White House healthcare summit. From Waxman's letter to Wellpoint:
To assist the Committee with the preparation for the hearing, we request that you provide the following information and documents:
- All internal communications, including e-mail, to or from senior corporate management relating to the company’s decision to increase premium rates in California in the individual health insurance market;
- All presentations to senior corporate management, or government agencies, relating to increases in premium rates in California in the individual health insurance market;
- A detailed explanation of the reasons for the premium rate increase proposed by Anthem Blue Cross in California;
- 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; and
- 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.
For purposes of this request, “senior corporate management” includes all company officials at the level of Vice President and above for Anthem Blue Cross and WellPoint, Incorporated.
This will provide Dems with a little extra ammunition going into the summit. It also could give some strong backing evidence for progressives, who will use the summit as the last-stand for a public option. Anthem is probably not going to be the only insurer that chooses to respond to the threat of reform with excessive rate increases. A strong public option remains the most effective check on insurers.
