Insurers, Reaping Huge Profits, Hike Rates

Health and Human Services Secretary Kathleen Sebelius, left, speaks with various state insurance commissioners and insurance industry executives in the Roosevelt Room of the White House in Washington, Thursday, March 4, 2010. From left are, Sebelius; Pennsylvania Insurance Commissioner Joel Ario; and West Virginia Insurance Commissioner Jane Cline. (AP Photo/Gerald Herbert)
AP Photo/Gerald Herbert
As the battle over health care reform resumes this week, Democrats remain split over whether a bill will pass before the end of the month. But the White House is now ramping up its case that time is money and Americans who need insurance are the ones getting stuck with the bill as CBS News correspondent Sharyl Attkisson reports.

As Obama administration officials push the president's health care plan, exhibit A is a stunning series of rate hikes by private insurance companies.

Special Report: Health Care Reform

"15,000 people a day lose their insurance, and some of those folks are being actually priced out of the marketplace," said Health and Human Services secretary Kathleen Sebelius.

In fact, major insurers are seeking premium hikes for individual policies - people not covered through work: 56 percent in Michigan, more than 25 percent in California, and 20 percent or more in Oregon, Maine, and Connecticut. And double digit increases are completed or pending in at least eight other states.

That's why the president has often co-opted the maddening rate hikes to make the case for health care reform, mentioning them in this weekend's address and in a Super Bowl interview with Katie Couric when he noted that "one of the major insurers in California just announced in the individual market they are increasing their premiums by 39 percent."

That company is Anthem Blue Cross, and Ilene Lisak is one of the unlucky customers. The company notified her by letter that her $525 a month premium is going up to $708, an almost 35 percent hike.

"I was so overwhelmed. I just started crying," Lisak said.

Other customers recently told their stories to congress.

"This is outrageous. My benefits have not improved in any way, and I don't go to the doctor that often," said Jeremy Arnold

With so much controversy, Anthem has been forced to put off rate hikes until May 1, while state officials review them. Anthem's parent company, Wellpoint, made $380 million profit in just the fourth quarter last year. But executives argue they have no choice but to raise rates.

"Hospital costs are going up over 11 percent. Pharmaceutical costs are going up over 13 percent," said Wellpoint executive vice president Brad Fluegel. "That's what we really need to be focused on."

  • Sharyl Attkisson On Twitter»

    Sharyl Attkisson is a CBS News investigative correspondent based in Washington.