What To Make Of Anthem’s Rate Hikes
What To Make Of Anthem’s Rate Hikes
HCAN has responded to Anthem Blue Cross’s rate hikes (the company is a subsidiary of WellPoint) in the California individual market by releasing a report demonstrating how premium increases have been feeding insurer profits, not paying for health care costs. “The report finds that the top five largest for-profit insurance companies increased their profits by $12.2 billion last year while dropping coverage for 2.7 million Americans“:
As a group, WellPoint, Aetna, UnitedHealth Group, Humana and Cigna saw their profits jump 56 percent in 2009 up $4.4 billion over the previous year, according to the report. Four out of five companies saw profits increase while insuring fewer people. Cigna increased earnings by 346 percent while UnitedHealth shed 1.7 million beneficiaries. Aetna, which increased its membership and percentage of premiums spent on medical care, was the only company to see less income in 2009 than 2008.
Health insurance is one of the only businesses where you can make more money by shedding customers and selling less product. And the insurers certainly have. The patchwork of state regulations governing the individual market allow insurers to cherry pick the healthiest applicants and drop those with the most expensive claims. It’s a smart business strategy but it doesn’t work very well for the patient, which is presumably a concern for lawmakers.
Democrats have responded by proposing a plan that establishes new standards for insurers and sets a federal floor of protections that prohibit some of the most egregious industry practices. You’ve heard most of this before: the legislation would prevent pre-existing condition exclusions, lifetime and annual limits, and other abuses. The bills “would greatly reduce the number of people enrolling in individual market plans. Instead of signing up for these high cost, low benefit plans, individuals can join together in a broader pool within the health insurance exchange to lower costs.” It’s a fairly good deal and according to the Congressional Budget Office, it should lower premiums for a good number of Americans and change the trajectory of health care spending (slow the growth of national health care expenditures).
And Republicans are also feigning concern. “If the argument is that the WellPoint hike means we need reform, well, ‘duh,’” said Michael Steel, spokesman for House Minority Leader John Boehner. “But our proposal holds down costs, without the trillion-dollar government takeover.”
No, their proposal reinforces the problems of the individual market. The House Republicans’ plan, which extends coverage to just 3 million Americans would leave 52 million Americans uninsured by 2019. And that’s because it deregulates the individual health insurance market by permitting insurers to override state-based consumer protections and sell sub prime policies across state lines. They want insurers to sell policies from the Northern Mariana Islands! In fact, it’s unlikely that the GOP would be able to qualify for coverage under their own plan — which, incidentally, does nothing to control general health care spending. (More on that here.)
So it’s a tale of two parties. Democrats are using the rate hikes to argue in favor of reform that would ameliorate the problem, Republicans are using it to hawk a proposal that would result in higher costs for the overwhelming majority of Americans. Republicans are trying to sell you the kind of deregulation that contributed to the rate hikes in the first place.
A spokesman for the Insurance Commissioner's office told KCBS the company agreed to delay the rate hike, while state regulators conduct an actuarial review of the company's finances...The company will have to prove to state regulators that 70% of the money it takes in, including the new revenue from the rate hikes, will be spent on health care benefits, rather than administrative costs or shareholders.
17 Responses to “What To Make Of Anthem’s Rate Hikes”
Register
RSSLogin
Wonk Room Tweets
Topic Cloud
ArchivesBlog RollAbout Wonk RoomContact Us
Donate
What happened was, the Supreme Court gave corporations the power to make political decisions, and the corporations decided it would be best to have the taxpayers pay their profits directly, eliminating the commerce in the middle as inefficient. However, the ancient rules of monetary policy came out of their slumber in the fifth-dimensional past, and smote Bernanke, Geithner, Paulson and their ilk with a series of sternly-worded interviews, but their friends got to keep the money. They advised their friends to go long hedges and PEUs, which ended up putting all the money under the control of Sheila Bair, who is having a hard time convincing herself that any president who would allow this to happen instead of sending sternly-worded executive orders to the Comptroller of the Currency even deserves her repeating her simple plan of adjusting bank liabilities and assets simultaneously to detoxify assets.
In the mean time the corporations decide, “hey, it would still be really cool if we could just get profits directly from the taxpayers.” But the forgot the part about their mission, so, single payer.
The question becomes, how large of a middle class do we really want? I say go for it, 95%, why not?
February 13th, 2010 at 8:23 pmI emailed a CAP staffer about it. “No idea” why mentioning pnhp dot org causes posts to disappear. You can use bit.ly links to it, though: http://bit.ly/1payerCost
February 15th, 2010 at 12:04 amI wonder if this one will show up: http://www.healthcare-now.org/
February 14th, 2010 at 11:43 pmBoth legacy parties are baking the insurance companies into the process permamently. That’s the problem.
February 14th, 2010 at 10:33 pmAnybody who wants to look at real solutions to the health care crisis should look at this site: http://pnhp.org
February 14th, 2010 at 10:36 pmJust to test that all URLs aren’t being censored:
http://www.dailykos.com
is commonly known as Big Orange.
February 14th, 2010 at 10:38 pmYep, PNHP’s URL is being censored. h t t p : / / p n h p . o r g will not post.
Thanks, “progressives”!
February 14th, 2010 at 10:40 pmYeah, I don’t have “any idea” why either. The problem with Bitly links, as I’m sure you know, is that you can’t tell from reading them what’s at the other end.
So, sure, you can get a link to h t t p : / / p n h p . o r g by, in essence, encrypting it. Not sure how that squares with “progressive” values…
February 15th, 2010 at 10:31 amLet me just test HCAN’t, and see whether it passes the filters:
http://healthcareforamericanow.org/
February 15th, 2010 at 10:33 amsee:
February 15th, 2010 at 1:42 pmhttp://www.nationalnursesunited.org/
for a single payer perspective FROM NURSES
We should also mention the wonderful work being done by Healthcare-NOW!, in particular tonight’s conference call with Kip Sullivan which lambert’s blog has posted about.
February 15th, 2010 at 4:10 pmhttp://pnhp.org
February 15th, 2010 at 4:14 pmDoes Physicians for a National Health Program work as HTML?
February 15th, 2010 at 4:16 pmDoes this post? HTML & URL didn’t -
February 15th, 2010 at 4:53 pmPhysicians for a National Health Program
california nurses union / national nurses organizing committee on anthem’s rate hike and some of their other egregious practices here.
February 15th, 2010 at 4:53 pmWellpoint sold assets for their fourth quarter profit according to a 1/28/2010 article in LA Times. Profits per premium dollar went down.
Although an insurance company makes a profit, it does not mean they did it because of premiums.
February 16th, 2010 at 9:50 amhttp://pnhp.org
What the hell
February 16th, 2010 at 12:18 pm