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Obama admin. demands justification for health insurerâs 39 percent rate hike
Posted: Feb 9, 2010
Monday, February 8th, 2010 -- 8:09 pm
Insurer spent nearly $9.5 million lobbying against health reforms; CEO's annual salary tops $10 million
It's an issue that strikes at the core of America's health reform debate: How much should one have to pay to ensure their health care needs are met?
Now take that price and inflate it by up to 39 percent -- just to get a feel for what it is like to be one of roughly 800,000 Anthem Blue Cross customers in California who hold individual policies.
The company said its dramatic rate hike would take effect on March 1.
State regulators almost immediately promised to investigate the increase. Then, on Monday, the Obama administration got involved.
In a letter faxed to Anthem Blue Cross, US Health and Human Services Secretary Kathleen Sebelius called for the insurer to publicly explain why it raised premiums.
"With so many families already affected by rising costs, I was very disturbed to learn through media accounts that Anthem Blue Cross plans to raise premiums for its California customers by as much as 39 percent," or 15 times faster than inflation, Sebelius wrote.
The rate hikes were "even more difficult to understand" in the light of soaring profits at Anthem Blue Cross's parent company, WellPoint Incorporated, Sebelius said.
WellPoint earned 2.7 billion dollars in the last quarter of 2009, she said, calling on the insurance company to "provide a detailed justification" for the increase.
Additionally, WellPoint CEO Angela Braly earns an annual salary of nearly $10 million and held nearly $2 million in stock options at the end of 2008. Additionally, WellPoint spent nearly $9.5 million on lobbying against health reforms in 2009, labor advocate group AFL-CIO noted in a recent release.
"As we continue the health insurance reform debate in Washington, this announcement reminds us that too many Americans can be left with unaffordable insurance each time the rates or rules change in the private market," Sebelius said.
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