House expanding inquiry of health insurance rate hikes

Mar 3 2010

The House Committee on Energy and Commerce, which held a hearing last week on a California insurer's rate increases, is expanding its investigation.

The committee is summoning "the chief executives of four of the nation's largest for-profit health insurers to testify about medical claims denied for individuals with preexisting conditions," the Los Angeles Times reports. Lawmakers "are targeting the practices of WellPoint Inc., UnitedHealth Group, Humana Inc. and Aetna," which "provide insurance to a large share of the estimated 17 million Americans who buy individual insurance policies because they do not have health coverage through jobs." The committee has scheduled a hearing with the executives on March 23.

As part of the new inquiry, the committee chairman, Rep. Henry Waxman, D-Calif., and the subcommittee chairman, Rep. Bart Stupak, D-Mich., "are asking the companies to provide internal e-mails and documents related to underwriting policies, guidelines and practices for the last five years" (Helfand, 3/3).

San Francisco Chronicle: "The broadened investigation is part of an ongoing inquiry into Anthem's proposed rate increases of up to 39 percent, which would affect many of the insurer's 800,000 individual California customers. Last week, WellPoint CEO Angela Braly testified before the investigations subcommittee a day after Anthem CEO Leslie Margolin attempted to explain the rate hikes to members of California's Assembly Health Committee" (Colliver, 3/3). 

Financial Times: "If Democrats ultimately move to vote on healthcare reform, it is expected to occur before the Easter break. Lobbyists on Tuesday said the timing of Mr. Waxman's hearing showed that he was seeking to focus attention on an extremely popular provision of proposed healthcare reform, which would guarantee coverage for individuals with pre-existing conditions, just days before a potentially contentious vote" (Kirchgaessner, 3/2). 

Reuters: "The CEOs of Aetna, WellPoint, UnitedHealth and Cigna Corp were also scheduled to meet with U.S. Health Secretary Kathleen Sebelius on Wednesday, but the meeting has been postponed until Thursday and will be held at the White House" (Heavey, 3/2). 

Anthem's premiums increases "are more the result of bad market timing than anything sinister, some insurance brokers say...," The Denver Post reports. "But brokers note that Anthem is simply playing catch-up to the rest of the insurance world and that its rates aren't too askew of the market. 'It varies depending on where you live, but the rates are still competitive to most,' said health-insurance broker Dan Fosco, president of Bolder Benefits Inc. in Boulder" (Migoya, 3/3).

Meanwhile, The Wall Street Journal profiles WellPoint Inc. Chief Executive Angela Braly, who "is facing her biggest test yet as the nation's largest health insurer comes under fire for its plans to raise rates as much as 39% in California. So far, Ms. Braly has chosen to fight back. Instead of issuing a Toyota-style apology, she is turning her critics' argument around, citing rising health-care costs driven by doctors and hospitals, which she says aren't addressed by the current health-overhaul bills." That strategy "is playing well with investors," who "said they are relieved that the company is standing by the increases… But Ms. Braly's combative approach risks making WellPoint even more of a lightning rod for Democrats" (Johnson and Mathews, 3/2).