WellPoint's heart-stopping rate increase

The health insurance company finds itself in congressional investigators' cross hairs


Wendell Potter
February 18, 2010 12:18AM (UTC)

A congressional hearing next week into the proposed 39 percent rate increase in California by health insurance giant WellPoint could breathe new life into healthcare reform efforts on Capitol Hill, especially if lawmakers broaden their investigation into the outrageous rate increases other insurers are also demanding from coast to coast.

WellPoint found itself in congressional investigators' cross hairs after the California Department of Insurance challenged the company's planned increase in the rates it charges its customers who cannot get coverage through the workplace, but have to go it alone in what is called the individual market.

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This week WellPoint announced that it was canceling its Investor Day, which had been scheduled the day before a hearing by the House Energy and Commerce subcommittee on oversight and investigations. An Investor Day is a big and usually very expensive affair that publicly traded companies hold, usually once a year, to tell investors and analysts how much money they expect to make in the coming year, and how they plan to make it. It is not at all unusual for a company to spend a quarter of a million dollars on these soirées, which, because the news media usually ignore them, give company executives a chance to speak with more candor than usual about their operations.

I know because I used to help plan these functions. They are often held in New York's finest hotels -- the ones that charge a minimum of $1,000 a night for their rooms.

Keith Olbermann invited me to talk about WellPoint's rate increase on his "Countdown" show on MSNBC last night. When I got home, I saw that I had received several e-mails from people who has seen the show and wanted me to know about their own heart-stopping rate increase notices. Two were from former colleagues of mine at Cigna, both of whom had worked for the company for years and who were enrolled in a pre-retirement plan. One said Cigna planned to increase his rates by 46 percent this year. Another said his rate increase would be 47 percent. Yet another acquaintance, who works for a small business in Iowa, said he received a notice from his insurer that his rates would be going up by 38 percent.

I pointed out on "Countdown" that WellPoint's planned increase in Maine was so high the state's insurance commissioner cut the planned increase in half, prompting WellPoint to sue the state. That case is still pending. And I noted that Blue Cross and Blue Shield of Nebraska announced plans last year to increase rates on some of its plans by more than 35 percent. It won't take a lot of investigating for members of Congress to see that these outrageous rate increases are common, and that the WellPoint increase in California is nothing more than business as usual for this industry, which values profits far more than the health and well-being of its customers. If everyone who has received a rate increase notice lets their members of Congress know about it, it just might give lawmakers the motivation they need to get reform passed. 


Wendell Potter

Wendell Potter is a senior analyst at the Center for Public Integrity, the senior fellow on health care at the Center for Media and Democracy, and a leading critic of the health insurance industry. His book Deadly Spin won the 2011 Ridenhour Book Prize.

MORE FROM Wendell Potter

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Healthcare Reform



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