Dems Blame Anthem Exec Pay for Rate Hikes

(CBS/ AP)  A major health insurer that wants to boost rates in California by up to 39 percent was trying to maximize profits by purging its sickest customers while spending millions on exorbitant salaries and retreats for its executives, congressional Democrats said Wednesday.

Rep. Henry Waxman, chairman of the House Energy and Commerce Committee, said at a hearing on WellPoint Inc. that his panel's investigators had received internal company documents showing that in 2008, 39 company executives received salaries of $1 million or more. And in 2007 and 2008, it spent $27 million for 103 executive retreats.

"Corporate executives at WellPoint are thriving, but its policyholders are paying the price," said Waxman, D-Calif.

WellPoint owns Anthem Blue Cross, which wants to raise rates on individual policy holders in California and blames those increases on rising medical costs.

In prepared testimony for the panel, Angela Braly, president of WellPoint Inc., blamed the increases on the growing price tags for hospital care and pharmaceuticals. She also cited the ailing economy, which has caused many younger, healthier people to save money by dropping coverage, leaving her company covering an older, sicker population.

"Raising our premiums was not something we wanted to do," Braly said. "But we believe this was the most prudent choice."

Anthem's rate boosts in California have made it a poster child for Democrats arguing that the nation's health system must be overhauled. Wednesday's hearing comes a day before President Barack Obama hosts bipartisan congressional leaders for a daylong, televised discussion of health care, a session he hopes will provide new momentum to Democrats' stalled legislation.

"This is a national problem," said Rep. Bart Stupak, D-Mich., who chairs the oversight subcommittee holding the hearing.

In fact, the Center for American Progress Action Fund released a report today showing that "double-digit hikes have been implemented or are pending in at least 11 other states among the 14 where WellPoint's Blue Cross Blue Shield companies are active: California, Colorado, Connecticut, Georgia, Indiana, Maine, Nevada, New Hampshire, New York, Virginia and Wisconsin."

Republicans on the committee said little to defend Anthem, but noted the hearing's timing just before what Rep. Michael Burgess, R-Texas, called Obama's "six-hour photo op."

It also was occurring the same day the House planned to vote on legislation repealing the health insurance industry's exemption from federal antitrust laws. Obama and Democrats say the measure would help spur competition, but analysts say it would have little impact on how insurers do business because they already are regulated by states.

Democrats also invited some California residents to describe their experiences with Anthem.

In prepared testimony, Jeremy Arnold of Los Angeles said Anthem informed him last month that his rates would grow by 38 percent to $319 a month, which could force him to take a less expensive policy with higher deductibles and hope he doesn't get sick.

"Hope is not an adequate health care policy," Arnold said.

Braly expressed some sympathy.

"Clearly, we understand that rate increases create a challenge for many of our members," Braly said. "However, it is important to know that many of our members often have a choice of coverage."

She said the company was dismayed when the health overhaul debate in Washington turned into "an attack on the health insurance industry," which she said was "very misleading."

After its rate announcement generated criticism, Anthem said it was postponing the increase from March 1 until May 1 while it is reviewed by California regulators.

Anthem covers more than 8 million Californians, including about 800,000 who buy their policies directly. It is on those individually covered people that Anthem has proposed rate increases of up to 39 percent, though the company says the average increase is 25 percent -- which the company says is in line with competitors.

Braly said the company lost $10 million on individually insured Californians last year.

In a report earlier this month, the Obama administration cited WellPoint's reported profit of $2.7 billion in the fourth quarter of last year as evidence that insurers' rate boosts need to be curbed.

But Braly cited a one-time sale of an asset and said the profit excluding that was $380 million after taxes. She said even if the company returned that profit entirely to its customers, they would each receive an average $5.13 per month.

Braly said the rate increases and growing costs show why a health overhaul is needed. She said the Democratic bills debated so far have been inadequate because they don't control the growth of medical costs.

"Changing how we finance health care without changing how we deliver health care is simply not sustainable," she said.

[HGOODGUY]

Maybe you anti Government Healthcare people will realize that it is not a Socialist Conspiracy.

Government employees do not get any bonus's let alone huge ones based on corporate earnings because Medicare is NON PROFIT

Even if there were massive government waste, as some of you think, it still would not even come close to how you are being ripped off by insurance companies.

It ain't going to change folks unless you change it!!!

[starving1968-3]

by Berkeley-SkirtLifter February 24, 2010 3:54 PM EST
No one wants healthcare reform? Are you nuts? We all want reform, just because we don't like current proposals doesn't mean we don't want reform. sheesh.

reining in big pharma, tort lawyers, hc providers and everyone else getting freakin' rich off of our hc dime ain't gunna be easy. Not to mention higher ed and research dollars...holy crappola it's a big problem, but we ALL want reform.







BS.

Conservatives and republicans want NOTHING to change except the tort reform laws, so that the insurance companies can make EVEN MORE money, by paying out EVEN LESS money in settlements.

That's not reform. That's "industry protectionism at the expense of the citizenry".

[IndepTex20]

Starving you ignorantslut..........BSL exspoused exactly wherein the problems lie and many, many conservatives I know want to see exactly that done. Regardless of party, you liberal twit, "We the People" should demand that those issues be addressed and real reform persued for sake of this country and all therein.

[jeff-fla]

--IndepTex20. So what do we need to do?

[reveal4]

The senior Republican medicare folks just don't care if Medicare goes bankrupt, just as long as it is after these elderly GOP'ers are done with Medicare. They also want the children and grandchildren of America to pay for their current medical bills. They are fighting for their own Socialistically subsidized medicare. They know they get 3 times the benefits that they paid for. They know the taxpayer pays more than 50% of their medical care costs. They just don't care a damn about other folks. They are just narcissistic and narcissism is incurable. They don't give a damn about anyone else. Get used to it. This is an entirely "Lost" generation of old narcissists. They are incurable. Narcissism is incurable. No one has ever reached these old Republican narcissists, and no one ever will....

[retm-w]

Yada, Yada, Yada, Same old cut and paste from reveal4. Nothing new It's all the seniors and republicans fault.

[reveal4]

Is everyone simply missing the fact that after record setting, mind bending health insurance company payoffs to Republican Congress people, that now they are raising rates. They are trying to get the money back that they paid off the GOP and the "Tea Party" people with. Duh! They used your medical care dollars to payoff the GOP, and now they want you to repay them for the money that they spent on the GOP, which was your money. Does this qualify as a political ponzi scheme?

[myopinionpal]

Is it just me, or are Republicans investing in America's failure for political gain?

[rightbehind]

They use medicare as a dumping ground for all the insurance companies don't want. Then because health care insurance companies clientele are mostly young and healthy they say look how successful the private market is. I say get rid of these worthless parasites. We need to go single payer medicare for all. Health care insurance companies eat up 1 of every 3 dollars spent on health care and don't provide any service to the patient.

[rightbehind]

Get rid of these health care insurance parasites. We need to go single payer / medicare for all!

[hateisafourletterword]

Great. Now how do you fund it so it does not go broke. Obviously the current system is going broke already. And no the solution is not to burden only people making over a certain amount of money.
In 1989, Michael Millken made over $500,000,000 in salary & bonus. Say what you want about him, but between his employer and him, in that one year he paid around $15,000,000 to medicare. Is that enough for you for one year?

[myopinionpal]

No one wants healthcare reform but they will be the first to complain whenever their premiums and copayments are raised so high that on their next pay stub there wont be any bring home pay the insurance premium will have taken the entire paycheck. I guess this is what most americans want right!!!!

[Berkeley-SkirtLifter]

No one wants healthcare reform? Are you nuts? We all want reform, just because we don't like current proposals doesn't mean we don't want reform. sheesh.

reining in big pharma, tort lawyers, hc providers and everyone else getting freakin' rich off of our hc dime ain't gunna be easy. Not to mention higher ed and research dollars...holy crappola it's a big problem, but we ALL want reform.

[lmartink]

Yep. If you shoot healthcare reform down, that's what you get. Predatory insurance company jerks smell blood in the water. Time to increase your rates by close to 40%. Today it's Blue Cross / Anthem. Soon it will be all of them.

Like a bad case of gangrene, or metastases, the healthcare crisis is only going to get worse.

[pstibbons]

Brayl is correct, health insurance costs are the biggest factor behind rate increase, but the complete issue is private run health insurance companies. There is nothing evil (hopefully) behind how health insurance companies operate but as private entities they need to make money, and lots of it to keep talented business people running their companies. For private health insurance to be affordable and comprehensive, for everyone, Americans need to make the commitment to never get sick, require hospitalization or buy prescription drugs.

Of course we could adopt some commie public run system, and guarantee us all mediocre health services or adopt a unique American public and private system that will give a range of health services options AND:
(a) Ensure that everyone have the preventive care needed to keep us healthy and save this country some serious money
(b) Create a comprehensive system that will force down hospital and pharmaceutical costs
(c) Relieve the burden on States having to cover the costs of treating the uninsured
(d) Reduce the medical costs for the majority of Americans signifcantly

[pragmatist1]

...they also need to charge high premium rates for coverage and profit...many uninsured are illegals or those on disability/medicaid who are able bodied and can work...there's also too much fraud and the government isn't aggressively doing anything to stop this abuse in medicare and medicaid...the government has to accept a major share of the problems in health care in this country by what it does and has failed to do...

[jtdev1]

and how do you plan on making this happen???

We already know the problems, just no one has solutions.

[hull7777]

How can any politian complain about $27 million on 103 executives retreats when the Congressmen give "tax payor's money" to Wall Street who donate big$$$ to their campaigns; pay their exec's millions of dollars plus hugh bonuses. Who are we kidding!!

Congress does not want to include tort reform because trial lawyers contribute big time to Democratic candidates (a big percentage of medical costs/ insurance & extra procedures). Who are we kidding!!

Its all about the special interest groups (those that pay big) and the minority interest groups. What happened to the majority who elects the Congress and is suppose to represent them?

[jxknowles]

I expect them to complain when taxpapyers are being robbed by the Healthcare INSURANCE Industry and Lobby. That's Insurance Companies. Not doctors and nurses. Now these companies are shedding the sickest of their customers to go on Medicaid so the U.S. taxpayer can foot the bill. The system is broke.

Most families pay a huge percentage of their monthly income for healthcare coverage. When premiums go up $400 month, where does that money come from? Income taxes have not increased. Inflation is very low. Healthcare Insurance and energy costs are what's eating up the average citizen these days.

[lmartink]

Wrong. Obama has said he would be willing to consider tort reform. Do-nothing Repukes haven't brought it forward. Get your facts straight, and consider going back and getting that GED.