Wednesday
Feb242010
Anthem Customers Say Their Provider Began Raising Premiums In 2009
Wednesday, February 24, 2010 at 4:23PM
By Chingyu Wang - Talk Radio News Service
WellPoint, Inc., California's largest individual health insurer, as well as the parent company of Anthem Blue Cross, was accused of profiteering during a hearing on Wednesday before the House Committee on Energy and Commerce.
Though the news that Anthem Blue Cross in California had decided to raise premiums broke recently, several witnesses from the state of California testified that their provider has been raising its premiums since March 2009.
"In March 2009, Anthem raised those premiums to $231 per month, or $2772 or year - an increase of 26%," said Jeremy Arnold, a self-employed writer from Los Angeles. "In January 2010, Anthem informed me that my rates were going up again, to $319 per month, or $3828 per year - a further increase of 38%."
Committee Members expressed alarm over the fact that WellPoint increased some rates as much as 64% to help pay for large executive salaries and employee retreats.
"Between 2007 and 2008, WellPoint spent over $27 million to host 103 executive retreats," said Congressman Gene Green (D-Texas). "In 2008, during the high of the recession, WellPoint paid over $1.3 million to host 360 attendees at the Four Season Hotel in San Diego."
The committee cited data showing that WellPoint paid its top executives over $347 million in 2007 and 2008 combined. In 2008, WellPoint paid $115 million to 85 senior executives, according to the data.
WellPoint President/CEO Angela Braly, who received stock compensation valuing $8.5 million, and a salary of $1.1 million in 2009 alone, defended the rate increases, attributing them to market conditions.
"The increases in premium costs are driven by prices charged by clinicians, hospitals, medical device manufacturers, pharmaceutical companies and other suppliers in health care that are accelerating much faster than general inflation," Braly said.
Braly also invoked the struggling economy during her defense of the rate hikes, explaining that because younger and healthier policyholders have dropped their insurance, "there are fewer policyholders among whom to spread risk, and those remaining have higher health care costs. The result is higher premiums for those left in the pool."
WellPoint, Inc., California's largest individual health insurer, as well as the parent company of Anthem Blue Cross, was accused of profiteering during a hearing on Wednesday before the House Committee on Energy and Commerce.
Though the news that Anthem Blue Cross in California had decided to raise premiums broke recently, several witnesses from the state of California testified that their provider has been raising its premiums since March 2009.
"In March 2009, Anthem raised those premiums to $231 per month, or $2772 or year - an increase of 26%," said Jeremy Arnold, a self-employed writer from Los Angeles. "In January 2010, Anthem informed me that my rates were going up again, to $319 per month, or $3828 per year - a further increase of 38%."
Committee Members expressed alarm over the fact that WellPoint increased some rates as much as 64% to help pay for large executive salaries and employee retreats.
"Between 2007 and 2008, WellPoint spent over $27 million to host 103 executive retreats," said Congressman Gene Green (D-Texas). "In 2008, during the high of the recession, WellPoint paid over $1.3 million to host 360 attendees at the Four Season Hotel in San Diego."
The committee cited data showing that WellPoint paid its top executives over $347 million in 2007 and 2008 combined. In 2008, WellPoint paid $115 million to 85 senior executives, according to the data.
WellPoint President/CEO Angela Braly, who received stock compensation valuing $8.5 million, and a salary of $1.1 million in 2009 alone, defended the rate increases, attributing them to market conditions.
"The increases in premium costs are driven by prices charged by clinicians, hospitals, medical device manufacturers, pharmaceutical companies and other suppliers in health care that are accelerating much faster than general inflation," Braly said.
Braly also invoked the struggling economy during her defense of the rate hikes, explaining that because younger and healthier policyholders have dropped their insurance, "there are fewer policyholders among whom to spread risk, and those remaining have higher health care costs. The result is higher premiums for those left in the pool."
Insurance Providers May Soon Have To Reveal Rationale Behind Premium Increases
Health and Human Secretary Kathleen Sebelius told reporters Thursday that through the administration's health care reform effort, health insurance providers could soon be required to publish the rationale behind premium increases on American's policies.
“Right now we have a situation where the top 5 companies filed earning reports of $12.7 billion for 2009 in terms of profit statements and yet pivot around with double digit rate increase," Sebelius said during a conference call with reporters. “People have no bargaining power, they have no leverage and often are desperate in terms of what in the world they are going to do."
According to the secretary, posting the reasons behind raised premiums online will provide additional transparency.
Sebelius's remarks came shortly after a meeting with a variety of the heavy hitting insurance company CEO's and commissioners, including those from UnitedHealth Group, Aetna and WellPoint.
President Barack Obama stopped in during the meeting, according to Sebelius, to share a letter that he received from a cancer survivor in Ohio. Her rates were increased 25 percent last year, which put her insurance premiums at $7,000, with $4,000 in out of pocket costs, and has been informed that her rates will go up another 40 percent this year.
Sebelius quoted Obama saying “that kind of rate increase is just unacceptable and unsustainable.”