Washington lawmakers turned their ire on health insurers last week in the wake of hefty premium increases.
Insurers get premium roast ...
Legislators go on offensive over insurers' profits, suggested rate hikes
The anger about insurance premiums was set off by Anthem Blue Cross of California, part of for-profit insurance giant WellPoint, which last week was fending off attacks from state and federal officials over a planned steep increase in its premiums. Even President Barack Obama chimed in, using a rare White House news conference to knock Anthem for its up to 39% increase in premium costs. The president said that he would stop the cuts himself if he could, but “I don’t have the authority, as I understand it.” “If I could, I would have done that already and saved myself a lot of grief on Capitol Hill,” Obama added. The focus on premiums came days as Republicans and Democrats began to jockey for position ahead of a Feb. 25 bipartisan congressional healthcare summit that was announced last week by Obama. While the president and members of Congress painted Anthem as the poster boy for needed health reform, a new report issued by the liberal advocacy group Health Care for America Now showed that they were hardly alone. The report, released Feb. 11, showed the top five insurance companies last year notched their highest profits on record—doing so despite losing some 2.7 million customers (See related story below). “How do you accomplish this feat in the midst of a sharp economic downturn that reduced wealth across the board?” asked Rep. Rosa DeLauro (D-Conn.), a member of the House’s leadership team and a staunch proponent of health reform. “Easy. They delayed payments to doctors, hospitals (and) patients.” Last year, Anthem made a push to raise premiums in Connecticut by 32%—a number later negotiated down to 20%, DeLauro said. “Right now we’re looking at California, and the same company is trying to pull the same trick,” she said. Anger over the Anthem move prompted Rep. Henry Waxman (D-Calif.), chairman of the powerful House Energy and Commerce Committee, to call WellPoint President and CEO Angela Braly to testify on Capitol Hill on Feb. 24. The same scene could play out in the Senate, too, where lawmakers also expressed outrage over the rate increase. “We’re working to make sure they can’t do that because we think it’s violative of state law,” Sen. Barbara Boxer (D-Calif.) said. California Insurance Commissioner Steve Poizner instructed his department to hire an outside actuary to examine Anthem’s rates, adding that if the ratio is found to be excessive, “I will use the full power of my office to bring these rates down.” Poizner has called on the company to stay the increase until the results from the actuary come in. Anthem, however, sought to justify the increase, which it says will affect 10% of its members in the Golden State. In a letter sent to HHS Secretary Kathleen Sebelius, Anthem said its profit margins are in line with competitors in the state, with net income on a per-member basis of $12.62 per month in 2008. The company reported that it had made $2.7 billion in the last quarter of 2009. “Clearly, we understand that these increases create a challenge for many of our members,” wrote Brian Sassi, president and CEO of the Consumer Business Unit at WellPoint. “However, it is important to know that our members often have a choice of coverage.” Regardless, DeLauro, Boxer and other lawmakers used the Anthem case to bolster the need for health reform. Meanwhile, lawmakers in the House and Senate remained at an impasse over how to move two bills that have stalled on Capitol Hill. Instead, the Senate moved ahead with a legislative package meant to boost jobs. The jobs bill at one point included several key healthcare provisions that were removed, including one that would have frozen current Medicare reimbursement rates for physicians until Oct. 1 and one that would have extended COBRA benefits until later this year. Also struck from the bill were provisions that would have extended federal electronic health-record subsidies to so-called “hospital-based physicians” who practice in “outpatient” settings, amending the terms of the American Recovery and Reinvestment Act of 2009. Hospital groups will push for this extension to be included in future legislation. Key Democrats have said that they would return to the healthcare agenda once the jobs bill passes. Both the House and Senate are out this week for Presidents Day recess.
—with Joseph Conn
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