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Health insurers urged to explain rate hikes

- The Washington Times - Thursday, February 25, 2010

Health and Human Services Secretary Kathleen Sebelius asked the heads of five major health insurance companies on Wednesday to meet with her next month to explain why their premiums are on the rise.

Mrs. Sebelius' move came as Democrats stepped up attacks on the health insurance industry ahead of a bipartisan health care summit Thursday they hope will jump-start President Obama's stalled overhaul legislation.

At a contentious House hearing, Democrats confronted executives of one company that has sought rate increases of up to 39 percent in California and accused them of purging their sickest customers while spending millions on exorbitant salaries and retreats at ritzy resorts for executives. And the House neared a vote on revoking health insurers' antitrust exemption.

Together, the moves underscored how Democrats view attacks on the widely unpopular health insurance industry as one way to revive support for their health care drive, both with the public and among their own lawmakers, who have so far failed to rally behind a bill that Congress could send Mr. Obama.

Mrs. Sebelius wrote to the chief executives of UnitedHealth Group, WellPoint, Aetna, CIGNA and Health Care Service Corp. She asked them to come to a meeting March 3 on recent rate hikes.

"I hope this meeting will provide an opportunity to discuss why your premiums are climbing and how health insurance reform can bring down health care costs and fix our broken health insurance system," she wrote.

Rep. Henry A. Waxman, chairman of the House Energy and Commerce Committee, said at a hearing on WellPoint Inc. that his panel's investigators had received internal company documents showing that in 2008, 39 company executives received salaries of $1 million or more. And in 2007 and 2008, it spent $27 million for 103 executive retreats, which Democrats said included stays at fancy resorts in Hawaii and Arizona.

"Corporate executives at WellPoint are thriving, but its policyholders are paying the price," said the California Democrat.

WellPoint owns Anthem Blue Cross, which wants to raise rates on individual policyholders in California and blames those increases on rising medical costs. During a break in the hearing, a WellPoint executive said eliminating the executive salaries and retreats would have no impact on its rates.

"What's driving these rate increases are the underlying medical costs," said Brad Fluegel, WellPoint's chief strategy officer. He also said some of the retreats were for insurance agents and brokers who sell the company's products.

At the hearing, Democrats banged away at WellPoint any way they could. They let some of the company's California customers testify about how the company's rising rates were becoming unaffordable, and flashed slides on the hearing room's large TV screens of sick children and posh resorts where some of WellPoint meetings were held, including sites in Hawaii and Arizona.