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Record Profits Don’t Stop Health Insurer’s Record Rate Hikes
Click to enlarge chart.
There’s a theory that trends happen first in California before spreading to the rest of the nation. If that’s true in health insurance, we’re all in deep trouble.
Last week, Anthem Blue Cross—whose parent company WellPoint posted a record $4.7 billion profit in 2009—announced it was gouging even more money from its 800,000 California customers by raising premiums as much as 39 percent.
Deborah Burger, RN, and co-president of the National Nurses United (NNU), says Anthem Blue Cross’s ”disgraceful behavior may be particularly offensive,”
but it is not out of character for an industry engages systemically in price gouging and denial of care.
At a press conference this week, President Obama told reporters Anthem’s rate hike makes the need for health care reform even more clear.
if we don’t act, this is just a preview of coming attractions. Premiums will continue to rise for folks with insurance; millions more will lose their coverage altogether; our deficits will continue to grow larger.
On Tuesday, Health and Human Services Secretary Kathleen Sebelius said in a White House blog post that “too many Americans are at the whim of private, for-profit insurance companies.” She said those companies also are
raking in billions in profits each year, while policyholders struggle to make ends meet in this tough economy. Insurance companies can raise premiums or slash benefits, and there’s not much families can do about it, especially if they have preexisting conditions that would make it hard to get other coverage….What’s happening in California can happen in any state.
Keep in mind the figure $4.7 billion in profits and then see if you or anyone else can swallow Anthem’s claim that the bad economy has forced many people to drop their health insurance coverage and in turn Anthem is being forced to raise rates by 39 percent. It’s not flying. Even with WellPoint’s 4 percent drop in customers in 2009, its profits—the $4.7 billion—jumped by 90 percent over 2008. (See chart above.)
Sebelius and congressional leaders are demanding answers. In a letter to Anthem President Leslie Margolin, Sebelius says the company must provide justification for the rate hikes.
The extraordinary increases are up to 15 times faster than inflation and threaten to make health care unaffordable for hundreds of thousands of Californians, many of whom are already struggling to make ends meet in a difficult economy.
Your company’s strong financial position makes these rate increases even more difficult to understand. As you know, your parent company, WellPoint Incorporated, has seen its profits soar, earning $2.7 billion in the last quarter of 2009 alone.
House Energy and Commerce Committee Chairman Rep. Henry Waxman (D-Calif.) announced the Oversight and Investigations subcommittee will held a hearing Feb. 24 on the rate hike. In a letter to WellPoint CEO Angela Braly, Waxman and subcommittee chairman Bart Stupak (D-Mich.) say Braly must provide the committee detailed records including:
For each year from 2005 to 2008, a table listing, as applicable, premium revenue, claims payments, sales expenses, other general or administrative expenses, and profits for all individual health insurance products, including an explanation of the methodology used for these calculations, for Anthem Blue Cross in California;
A table listing all proposed premium increases from January 1, 2009, through December 31, 2010, in the individual health insurance market for all WellPoint subsidiaries, including the amount of the proposed premium increase, the subsidiary, the state affected, and a detailed explanation of reasons for the increase.
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10 Comments
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Oh, we can get all indignant about health insurance providers but it doesn’t do any good except to give us a nice self-righteous glow. Years ago, when workers believed in mutual aid, they provided for their own health care. In Ybor City, Florida, entire health care systems were developed by social clubs that were the cultural and political heart of the mostly-working-class community. Not only did the health care systems provide affordable insurance, they hired their own doctors and built their own hospitals and old-age homes. If you ask me, they had a good thing going. It’s too bad we’re so willing to let profiteers – both employers and insurers – control so much of our lives.
Sounds familiar. I was working for GM back when they were making record profits. They still asked for more concessions in contract talks. After giving concessions in the 70′s (raises and sick days) and seeing their game (still went up on price of cars and gave millions in executive bonuses), we got smart on the next contract to keep our salary and benefits in line with the everyday cost of living. That is not what caused GM bankruptcy though. Bankruptcy was caused by the executives giving themselves millions in bonuses every year and very, very poor management. Now the working machine behind GM has to pay by losing pensions and benefits. I bet if you check the executive bonuses in the Insurance industry, you’ll find out where the problem is.
Forward from MoveOn.org:
Blue Cross has just announced that it’s immediately raising premiums charged to hundreds of thousands of individual customers by as much as 39%—even though their parent company’s profits soared to a record $4.7 billion last year.1
Even worse, the insurer has so far refused to explain why they’re increasing their rates, and warned that they might do so again this year without warning.
The Obama administration is demanding answers from Anthem Blue Cross, and Congress has opened an investigation.2 But Blue Cross is only going to respond if this story becomes a major public-relations problem for them.
So it’s time to turn up the heat. Let’s join the growing call for an explanation and send a powerful public message that these abuses by Big Insurance are unacceptable.
Clicking here will add your name to the petition:
http://pol.moveon.org/bluecross/o.pl?id=18913-3669796-CZ34pEx&t=3
The petition says: “Anthem Blue Cross must provide a detailed explanation for their exorbitant rate increases, or else roll them back immediately.”
These latest rate increases in California—reportedly the largest ever by Blue Cross for individual policyholders in the state—are yet another powerful example of how badly broken our health care system is and how desperately we need to hold Big Insurance accountable for exploiting their customers.
Anthem Blue Cross’s parent company made record profits last year despite losing 1.4 million customers—increasing their profit margins by cherrypicking the healthiest people to insure.3
Then they can turn around and dramatically increase the rates they charge to the customers they’ve kept, because there’s almost no rules governing rate increases. In fact, the company doesn’t even have to publicly reveal how many customers’ rates they’ve increased, or by how much.
The good news is that Kathleen Sebelius, President Obama’s Secretary of Health and Human Services, is already publicly demanding answers from the company. And the House Energy and Commerce Committee has announced plans to hold hearings to investigate.
But to get Anthem to clean up their act—and show politicians and the media that we can’t afford any more abuses by Big Insurance—we all need to lend our voices. Clicking here will add your name to the petition:
http://pol.moveon.org/bluecross/o.pl?id=18913-3669796-CZ34pEx&t=4
Thanks for all you do.
–Kat, Michael, Carrie, Stephen, and the rest of the team
Sources:
1. “Anthem Blue Cross dramatically raising rates for Californians with individual health policies,” The Los Angeles Times, February 4, 2010
http://www.moveon.org/r?r=86432&id=18913-3669796-CZ34pEx&t=5
“WellPoint sees profit grow eightfold in fourth quarter,” The Los Angeles Times, January 28, 2010
http://www.moveon.org/r?r=86433&id=18913-3669796-CZ34pEx&t=6
2. “Sebelius Calls on Anthem Blue Cross to Publicly Justify 39 Percent Premium Increase,” U.S. Department of Health and Human Services, February 8, 2010
http://www.hhs.gov/news/press/2010pres/02/20100208c.html
“Congress opens probe into Anthem Blue Cross rate increases,” The Los Angeles Times, February 10, 2010
http://www.moveon.org/r?r=86434&id=18913-3669796-CZ34pEx&t=7
3. “Waxman and Stupak to WellPoint: We Request Your Testimony,” Office of House Speaker Nancy Pelosi, February 9, 2010
http://www.speaker.gov/blog/?p=2149
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After the repubs and the democrats sucked up $4.4 billion from lobbist last year, I hope they will now listen to the people they are suppose to represent. I whole/heartly beleive that the American people have had all the talk they want to hear! Now is a time of action or the democratic party is going down! Hope congress and the senate hears the people and are ready to act…if not, they will be sorry next election.
Relying on the present insurance systems and corporations leads to some 45,000 Americans dying each year because of lack of affordable health insurance and care. The Republican party, by doing everything it can to prevent change and to continue this death toll deserves to be called THE PARTY OF DEATH. For the Republicans, for killing and war, there’s always plenty of money. But to prolong life and quality of life, we can’t afford it. They should really be called THE PARTY OF DEATH. They’ve earned that name over and over again.
This is a typical wallstreet remade industry.The global economy says, highest profits by any means necessary.This is just the opposite values of the American work place.Federal as well as state legislators should use their power to create an work place environment with is prosperous for all.The true cause of these profits are no insurance,under insurance,higher taxes,fees and deeper deficits.When we look at companies like McDonald and even to some degree walmart,we are loking at food stamps,welfare and medicaid offices in disguise.Even large companies like Verizon and at&t are using these global tactics for short term wallstreet favor .It is no longer good enough for these companies to be profitable , but must meet wallstreet global expectations by reducing service and layoffs.So far the only Senator i heard address this issue is Sen.Bernie Sanders .
The bosses are theives, pure and simple. Their stranglehold on politics, the media, and debate in our country is complete, and can not be broken short of revolution. They will pay half of us to murder the other half if there is money in it for them. They have us playing their game by their rules and scratching our heads wondering why we can’t win. Our union ‘leaders’ are more afraid of the militancy of their own members than the bosses. Without an independent Labor party, things will continue to get worse with no end in sight. Anyone who sees a difference between the Democratic and Republican parties must be using a high-powered electron microscope.
The have all the laws rigged in their favor, so they can steal billions with impunity anytime they want, while we go to jail for smoking weed. They have dumbed us down so much that we settle for football on TV, bad food and cheap beer while we look down our noses at the rest of the world, ignorant of the fact that it is actually the rest of the world that is passing us by. They give us a uniform and a gun and send us around the world to kill people for no reason other than profit, and we do it, because we are leaderless drones who have had curiosity beaten out of us so much that we can’t see how ignorant and brutish we have become.
The entire world is struggling mightily against American imperialism — hoping to survive and outlast the crumbling and doomed American empire. We can either join them is this struggle or continue sinking into oblivion.
The truth is disturbingly unpleasant. Apparently, in order to change things for the better, we will all have to get up off of our fat, diabetic asses and actually do something for ourselves, because we can’t count on the bosses bought-and-paid-for representatives in government to do it for us. It is much easier just to sit here and watch reality TV on Fox. I think American Idol is on tonight. America — idle.
One simple way to correct this: pass HR676 and do it now.
Otherwise, I favor total nationalization of the entire healthcare industry.
Yes, passing a repeal of the anti-trust exemption for Healthcare folks would help. Passing an excess profit tax on these folks would help as well.
Please do not hold your breath waiting for health-care reform for that could be hazardous to your health.
There is a deafening silence across America and the world. The bosses have finally played their ace in the hole — taking all the money and running. Now that they have stolen everything, ripping even the copper out of our nation’s walls, their great capitalist engine, the “magic of the marketplace” has ground to a halt, and is revealed for the ponzi scheme that it is The rich are split as to how to proceed, as tumbleweeds roll down the main streets of America’s ghost towns. The population is stunned and immobilized, bitter and completely left out of the debate. The rulers don’t know whether to move forward to a more obvious form of dictatorship, riding a racist and xenophobic hysterical wave from our neglected backwaters, or to step back and buy time by printing paper money round the clock. The spectre of the kind of inflation that gave rise to Hitler in Germany looms.
This is the calm before the storm. In the past, in times of crisis, the oppressed masses have been able to produce leaders such as Frederick Douglas, W.E.B. DuBois, Big Bill Haywood, Susan B, Anthoy, Eugene V. Debs, Martin Luther King, and Malcolm X. The last two were mudered by the government almost 50 years ago, and we have seen noone emerge that could even tie their shoes since. Without new, militant leaders like Nelson Mandela or Che Guevara coming up from our own ranks, the deafening silence, the calm before the storm, wil be followed by a whirlwind that could destoy the future of America’s and the world’s working people for untold generations to come. Make no mistake, our enemies are at home, and they want to use the coming thunderous storm to put armed guards at our workplaces and arrest all of our fighters.
This deepening crisis will eventually force us to stop wringing our hands and start marching our feet. We will have a chance – WE WILL HAVE OUR CHANCE to turn that muderous thunder into the sound made when justice rolls down like waters, and righteousness like a mighty stream.