The Obama administration recently picked a high-profile fight with insurance giant Wellpoint, Inc. The issue: reports that one of its health plans was planning a major rate hike for some of its California customers.
The war of words began on Feb. 8 when Health and Human Services Secretary Kathleen Sebelius sent a letter to Anthem Blue Cross, a subsidiary of Wellpoint, saying that she was “very disturbed” to learn through news reports that the California plan was planning to raise premiums by as much as 39%. For more on that letter, check out an earlier post to this blog: https://egmnblog.wordpress.com/2010/02/08/hhs-takes-anthem-b-c-to-task/.
Wellpoint responded quickly to the criticism with a letter of its own. The company said that the rate hike simply reflected rising medical and pharmacy costs. Another factor impacting costs, Wellpoint said, is that the bad economy is driving healthy individuals to drop coverage, leaving a pool of sicker people in the individual market.
If the federal government wants to address the volatility in the individual insurance market, it should enact reforms that require individuals to purchase health coverage and find a way to reduce underlying medical costs, Wellpoint wrote in its letter to HHS.
But the sparring between Wellpoint and Democrats appears to be far from over. On Feb. 11, Ms. Sebelius issued another statement saying that Wellpoint is leaving consumers with “nothing but bad options: pay more for coverage, cut back on benefits or join the ranks of the uninsured.” Meanwhile, Democrats on the House Energy and Commerce Committee plan to investigate the rate hike in California and have scheduled a hearing for Feb. 24.
— Mary Ellen Schneider (on Twitter @MaryEllenNY)