Dems on the attack on health insurers | NevadaAppeal.com

Dems on the attack on health insurers

ERICA WERNER and ALAN FRAM
Associated Press Writers

WASHINGTON (AP) – The House voted overwhelmingly Wednesday to repeal the health insurance industry’s exemption from federal antitrust oversight, giving Democrats an easy win on health care a day ahead of President Barack Obama’s bipartisan health summit.

The 406-19 vote was part of a multipronged attack by Democrats Wednesday against the unpopular industry. 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 Health and Human Services Secretary Kathleen Sebelius wrote to the heads of five major insurance companies asking them to meet with her to justify their pricing policies.

All three moves were more symbolic than substantive, but together they underscored how Democrats view attacks on the widely disliked 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 Obama. Democrats also hope Thursday’s summit will jump-start the debate.

“Health insurance premiums continue to spiral ever upward each year. The copayments and deductibles keep taking further bites out of tight family budgets,” said Judiciary Committee Chairman John Conyers, D-Mich., as the House debated the antitrust bill. “Those families have a right to know that they’re not being victimized by insurers any longer.”

The legislation passed Wednesday would put insurers under federal antitrust jurisdiction by amending a 1945 law that gave states, not the federal government, the authority to regulate competition issues within the insurance industry.

Independent experts largely agree that the change would have minimal effect, in part because of the regulatory role states already play. The Congressional Budget Office has said that removing the antitrust exemption would have “no significant effects” on premium prices or the federal budget.

The powerful health insurance lobby America’s Health Insurance Plans did not make defeating the bill a priority and Republicans criticized the legislation as ineffectual. Rep. Lamar Smith, R-Texas, said the bill had “all the substance of a soup made by boiling the shadow of a chicken.”

Democrats, however, argued that the repeal would help consumers by increasing competition. And when it came time to vote, Republicans overwhelmingly sided with the Democrats, unwilling to be seen as voting for the health insurance industry. All the 19 “no” votes, though, came from the GOP. The legislation faces dim prospects in the Senate.

Democrats had initially wanted the repeal to apply to providers of medical malpractice insurance as well, but that industry fought back, saying companies needed to be able to share historical risk data to set rates. The legislation that passed Wednesday was narrowed to just hit health insurers, many of which are giant companies that have little need to share data thanks to their national size and scope.

Even as the House debated the antitrust bill, executives of WellPoint Inc. were under fire from the House Energy and Commerce Committee. Chairman Henry Waxman, D-Calif., said 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 executive retreats, which Democrats said included stays at fancy resorts in Hawaii and Arizona.

Rep. Jan Schakowsky, D-Ill., called the rate increases “so incredibly audacious, so irresponsible” at a time of rising rates and asked WellPoint president Angela Braly what she earned last year. Braly said she had a $1.1 million salary stock compensation worth $8.5 million.

“Of course it makes sense that you would need a big rate increase,” Schakowsky said.

WellPoint owns Anthem Blue Cross, which wants to raise rates on individual policyholders in California. Braly blamed the increases on the growing price tags for hospital care and pharmaceuticals. She also cited the ailing economy, which has caused many younger, healthier people to save money by dropping coverage, leaving her company covering an older, sicker population.

“Because of our role in health care, it is often insurers who have to deliver the bad news regarding spiraling health care costs,” she said, adding that her company was always looking for ways to reduce customers’ costs.

During a break in the hearing, a WellPoint executive said eliminating the executive salaries and retreats would have no impact on its rates.

Democrats on the panel said some of the 3,000 documents WellPoint sent them indicated that the company had padded the rate proposal it submitted to California regulators in an expectation that the final rates would be lower, and was boosting rates to increase profits and manipulating prices to pressure sicker patients to drop coverage.

“You’re raising your rates far above what’s necessary,” said Rep. Henry Waxman, D-Calif., chairman of the House Energy and Commerce Committee. “You’re trying to squeeze every dollar of profit you can out of policyholders in California and across the nation.”

WellPoint officials denied those accusations, saying they lost $10 million last year for its California customers who purchase coverage individually and not through their employers.

Republicans on the committee said little to defend Anthem, but noted the hearing’s timing just before what Rep. Michael Burgess, R-Texas, called Obama’s “six-hour photo op.”

WellPoint was among the five insurers invited by Sebelius to meet with her March 3 to discuss recent rate hikes. Sebelius also wrote to the chief executives of UnitedHealth Group, Aetna, CIGNA and Health Care Service Corporation.

“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.

Robert Zirkelbach, spokesman for America’s Health Insurance Plans, welcomed the invitation. “This is a great opportunity to have a meaningful discussion about the key drivers of rising health care cost,” he said.