So WellPoint wants to raise rates for its individual health plan members in California by up to 39%, and everyone is shocked – shocked and appalled. HHS Secretary Kathleen Sebelius is “very disturbed” and leading an inquiry. WellPoint chief executive Angela Braly is being called to Washington to testify before Congress. If the whole farce wasn’t so sad for the tens of millions of people without health insurance or with inadequate coverage, it would be laughable. So what got us to this point? Here’s a brief chronology:
The health insurance industry says it supports reform and even makes some important concessions on guaranteed issue and community rating of individual insurance. Conservatives do everything they can to block legislation and unjustly demonize reformers. In time, the industry shows its true colors by secretly funding advertising aimed at killing or significantly scaling back the reform effort.
Despite this — and despite the influencial Congressional Democrats and Republicans who are in the pocket of the healthcare industry — both the House and Senate manage to pass legislation that would dramatically expand coverage and reform the nation’s broken individual health insurance market. The Senate version would mean flat or reduced premiums (or subsidies that reduce an individual’s share of premium costs) for 177 million people, according to the Congressional Budget Office. Another 14 million would pay more but receive much better coverage.
Then the liberal state of Massachusetts – the only state with near-universal coverage — shocks the nation by electing as U.S. Senator a Republican who has vowed to vote against healthcare reform. Democrats retreat faster than the Union army at Bull Run. Obama backtracks, calls on lawmakers “to coalesce around those elements of the package that people agree on” (apparently forgetting that Republicans and Democrats basically agree on nothing regarding healthcare reform), and doesn’t even address the topic until halfway through his hour-long State of the Union address — and only for five minutes.
Then a for-profit health plan called WellPoint seeks to raise premiums on a money-losing product – even though it is making substantial profits overall — and people are stunned by what is in essence a completely logical action for a for-profit company.
You almost get the feeling that Congress, the President and the American people ought to really push hard for some kind of legislation that starts to address some of the underlying issues that bring about these eventualities — sort-of like the Senate bill that House Democrats could send to Obama’s desk simply by using their majority to vote yes. Of course, that would take a little more courage than dragging Angela Braly on the carpet to explain why a for-profit company usually tries to make a profit.
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How is this in defense of Wellpoint? Apparently, you don’t care about the unconstitutionality of federal government mandated health care?
Wellpoint – just as any other private corporation – has the right to make a profit in this country. If you really want reform in the health insurance industry – get the federal government out of it – and let the states decide – as it is clearly stated in the 10th amendment.
Your so-called “defense of wellpoint” is just another liberal slanted smear against the health insurance industry and is taken out of the progressive playbook. I thought you guys were supposed to be looking out for the best interests of the insurance and managed care markets?
You couldn’t tell that from this pro-Obamacare fluff piece.
You say, “Wellpoint — just as any other private corporation — has the right to make a profit.”
I say, “WellPoint seeks to raise premiums on a money-losing product…a completely logical action for a for-profit company.”
Let’s call the whole thing off.
Hello Carl. I respectfully disagree! From my blog below…..
Egads, doesn’t Ms. Sebelius have enough to worry about? She faxed a letter to California-based Anthem Blue Cross, expressing how ‘disturbed’ she was by ‘unaffordable’ rate increases ‘as much as 39%’ in the face of $2.7 billion profits. She calls for greater transparency on the ratio of medical vs. overhead costs and urges Anthem to ‘cooperate fully’ with California’s Insurance Commissioner, because [gulp!] she will be ‘closely monitoring the situation.’
I think this is really the latest example of perma-campaign mode political grandstanding. Ms. Sebelius is not a national health insurance comissioner with jurisdication over state regulated plans. She’d do better with her considerable administrative and political skills addressing the government’s 10.4% trend rate, relentless growth to the point of accounting for 50% of all health care costs, a budget increase in 2011 in excess of $80 million with close to 3000 additional FTEs, not having anyone at the helm at CMS, and a looming deficit that has perilous national security implications.
I can only hope Ms. Sebelius’ puffery wasn’t completely orchestrated by the White House’s Four Horsmen and that she actually took the took the time to personally look at Wellpoint’s 2009 financials. If she did, she’d know the company lost 1.4 milion members, mostly from its small group business. Operating revenue went down compared to 2008, the cost trend was high at 8.9% thanks to rising provider costs and investment income was lower. It all adds up to a toxic brew of premium increases due to a combination of higher medical costs and unfavorable underwriting: in the current economy, healthy persons that can do without insurance drop it, leaving behind relatively more sick persons with high health care costs. It can be argued that a rate increase was the responsible thing to do in the face of relentless health system cost increases – unless, of course, you’re willing to trample on State’s rights, fudge entitlements, print money and borrow from the Chinese.
Ms. Sebelius can fuss all she wants. The there are only so many premium dollars to cover the cost, the State of California is in charge, and the Obama Administration’s time would be better spent on dealing with bigger problems that it can actually do something about. In fact, I’m going to double down and predict that, once the news cycle moves on, Anthem will quietly provide all its pricing information to all the various Committee Chairs, Senators, Commissioners, Commissars and Potentates. After a requisite amount of nit-picking and face-saving adjustments, the bulk of the premium increases will stand. That’s because, in this particular instance, health care inflation and the political process are the real problems, not the health insurance industry.
Best regards,
Jaan
Actually, Jaan, I think we’re essentially in agreement except I’d say that the Obama Administration and Congressional Dems should focus their energies on getting tough and doing whatever it takes to push through reforms that really address the broken individual insurance market, fix the problem of the uninsured, ensure adequate coverage, and bend the trend. The Senate/House efforts — for all their flaws — were a decent start.