Insurance execs defend rate hikes before Congress

Lawmakers said Anthem Blue Cross, the California insurer that proposed raising premium rates for some individual policyholders by as much as 39 percent, sought to boost profits at the expense of its insured, the Los Angeles Times reports. During a congressional hearing Wednesday, "Democrats said internal documents from [Anthem's parent firm] WellPoint Inc. showed that proposed rate increases of as much as 39% for California customers who buy individual policies would 'return California to a profit of 7%.'"

In a statement, submitted to the Energy and Commerce panel's oversight subcommittee, WellPoint CEO Angela Braly "said that WellPoint appreciated the burden of rising premiums but that it was unfair to hold health insurers responsible for the underlying cause -- the soaring healthcare costs of doctors, hospitals and drug companies, among others" (Simon and Helfand, 2/24). 

Reuters: Rep. Bart Stupak, D-Mich., who chairs oversight subcommittee, "said a review of thousands of internal documents from the nation's largest health insurance company 'tell another story. Democrats said an internal company email showed WellPoint saw the California rate hike as a way to return Anthem Blue Cross to its target profit rate of more than 7 percent" (Heavy, 2/24).

The Wall Street Journal: "The panel on Wednesday heard testimony from Californians enrolled in Anthem Blue Cross plans who said their premiums repeatedly spiked, leaving them with a dilemma: either stay in their Anthem Blue Cross despite the rising premiums or face even higher premiums at another company because they had a pre-existing health condition" (Yoest, 2/24).

The New York Times: "The hearing comes amid growing criticism of WellPoint and the health insurance industry by President Obama and Democrats in Congress, who say the proposed rate increases show the need for federal review and regulation of insurance premiums." WellPoint CEO Braly, meanwhile, criticized the overhaul proposals that have passed Congress would further damage the health insurance market by allowing people to avoid buying insurance until they become sick (Pear, 2/24).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.