The Obama administration may not be able to get health reform legislation through Congress right now, but that doesn’t mean it isn’t still a thorn in the side of health insurers. Earlier today, while most government employees in Washington, D.C., were still shoveling out their driveways, the press staff at the Department of Health and Human Services put out a news release calling on Anthem Blue Cross to justify a planned double-digit premium increase for its California members.
In a letter to the President of Anthem Blue Cross, dated Feb. 8th, HHS Secretary Kathleen Sebelius said she was “very disturbed” to learn through news reports that Anthem plans in California were gearing up to raise premiums by as much as 39%. And she took the company to task for essentially making premiums unaffordable for many California families. The increase would dramatically outpace inflation and is in stark contrast to the enormous profits earned by Anthem’s parent company WellPoint Incorporated, Ms. Sebelius noted. Wellpoint, according to HHS, earned $2.7 billion in the last quarter of 2009 alone.
Here’s a brief excerpt of some of the tough talk in the letter from Ms. Sebelius:
“I believe Anthem Blue Cross has a responsibility to provide a detailed justification for these rate increases to the public. Additionally, you should make public information on the percent of your individual market premiums that is used for medical care versus the percent that is used for administrative costs. Policy holders in the individual market deserve to know if their premium increases would be invested in better medical care or insurance company overhead costs like salaries, profits, and advertising. I am aware that the State of California is investigating this matter, and urge Anthem Blue Cross to cooperate fully. In the meantime, I will be closely monitoring the situation.”
This week in the House of Representatives, Democrats are expected to go after the anti-trust exemptions enjoyed by health insurance companies. It’s unclear if a similar bill would be supported in the Senate, but if the HHS letter is any indication, health insurers can expect tough treatment in 2010.
— Mary Ellen Schneider (on Twitter @MaryEllenNY)