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WellPoint On The Hotseat Over Profits

Posted by Jane Akre
Wednesday, February 17, 2010 11:47 PM EST
Category: Protecting Your Family
Tags: Insurance Industry, Medical Malpractice, Tort Reform, Health Care Reform, Executive Bonuses, WellPoint

WellPoint had to go before lawmakers in Indiana today to explain high profits and executive bonuses while it is raising customer premiums.
WellPoint building in Indianapolis

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IMAGE SOURCE:Ermco Projects Web site / WellPoint building, Indianapolis

Indiana House Insurance Committee

The head of the insurance company, WellPoint’s Anthem Blue Cross and Blue Shield, faced intense questions from Indiana lawmakers today.

They wanted to know why the company raised the average rate for Indiana consumers by about 21 percent this year, when so many people are still going without insurance.

And that may be a conservative estimate.

The Indianapolis Star has seen some rate hikes of 38 percent, while the president of Anthem in Indiana, Robert Hillman, said some consumers have seen a 30 percent rise in premiums.

The committee in the Indiana House was packed to listen to Hillman. He said that the increases were necessary because more healthy people are leaving insurance pools and sicker individuals are left behind.

The Indiana House Insurance Committee members wanted to know why Anthem consumers have experienced massive premium increases in other states, including California.

WellPoint is based in Indianapolis and provides coverage to about 34 million people nationwide, making it the nation’s largest commercial insurer based on membership.

WellPoint operates Anthem and has recorded $4.7 billion in profit and executive multi-million dollar pay packages, at the time individuals premiums rose. Hillman says the profit is two to four cents per dollar.

Five Most Profitable

As the nation stalls on health care reform, including the debate on just how much the insurance industry needs to reform, comes word that the five largest health insurance companies racked up record profits last year - $12.2 billion – up 56 percent over 2008 numbers.

The numbers come from the 2009 financial reports filed with the Securities and Exchange Commission and were prepared by Health Care for America Now, which represents more than 1,000 organizations, including labor unions.

Based on the numbers, insurers WellPoint, United Health Group, Cigna, Aetna and Humana offered coverage to 2.7 million fewer people than before.

And three of the five insurers cut the amount of each premium dollar they spend on medical care for their customers, diverting more to salaries, administrative expenses and profits. #


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