Congress Must Plug the Rate Hike Loophole

Time and time again, insurance corporations have demonstrated that their hunger for profit trumps any moral obligation to their customers. This new story is just the latest example of the kind of outrageous behavior we've come to expect.
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I was outraged and dismayed yesterday when I read an investigative story by Reuters that details how WellPoint -- the nation's largest health insurance company, with 33.7 million customers -- used a special computer program to systematically identify women with breast cancer and target their health policies for termination.

I believe every American should read this shocking story.

Instead of providing the health care for which these seriously ill women had paid, WellPoint subjected these paying customers to investigations that ended with WellPoint's administrative bureaucrats canceling their insurance policies at their time of greatest need.

Under attack by both cancer and WellPoint, these women were left ailing, disabled, and broke.

Yenny Hsu, a woman from Los Angeles, was kicked off of her insurance policy after a breast cancer diagnosis because WellPoint said she failed to disclose that she had been exposed to hepatitis B as a child. That has nothing to do with breast cancer, but it did not stop WellPoint from terminating her coverage.

Another loyal, paying WellPoint customer who faced this situation was Patricia Reilling of Louisville, Kentucky. Ms. Reilling was an interior designer and art gallery owner who never missed a payment. But that did not stop WellPoint from canceling her insurance in the middle of her fight with breast cancer. WellPoint abandoned her at her weakest moment, forcing her to pay enormous medical bills on her own.

This woman, who was once a highly successful business owner, is now subsisting on Social Security and food stamps.

Meanwhile, WellPoint made a profit of $128 million by stripping seriously ill Americans of their insurance coverage in this manner, according to the House Energy and Commerce Committee. This is likely a low estimate because WellPoint refuses to provide a total number for rescissions across the company's subsidiaries, according to the Committee.

WellPoint earned a $4.7 billion profit in 2009 -- a $4.7 billion profit in 1 year. Angela Braly, the CEO of WellPoint, received $13.1 million in total compensation in 2009. This was a 51 percent increase in her salary over the prior year.

WellPoint is not alone in doing this to people, but they are an egregious offender. According to Reuters, a House investigation found that:

"WellPoint and two of the nation's other largest insurance companies -- UnitedHealth Group Inc and Assurant Health, part of Assurant Inc -- made at least $300 million by improperly rescinding more than 19,000 policyholders over one five-year period."

According to Health Care for America Now, these large companies -- the big, for-profit American medical insurance companies -- saw their profits jump 428 percent between 2000 and 2007. During this period, they doubled premium costs. So, they made huge profits over seven years while doubling premium costs.

Time and time again, our for-profit insurance corporations have demonstrated that their hunger for profit trumps any moral obligation to their customers. This new story is just the latest example of the kind of outrageous behavior we have come to expect from certain health insurance companies.

The health insurance reform law passed by Congress and signed by President Obama will end the practice of unfair rescission and discrimination because of preexisting conditions. But we must clearly be vigilant in order to ensure that the law has teeth and is heavily enforced.

We cannot turn our backs for one minute because, left to their own devices, I truly believe these companies will look for ways to throw paying customers to the sharks for the sake of profit. A situation currently unfolding in California is further proof of this.

On May 1 -- one week from Saturday -- more than 800,000 Californians who hold insurance policies issued by WellPoint's Anthem Blue Cross subsidiary will face rate hikes of up to 39 percent.

I have received deeply personal letters from many of these WellPoint customers whose lives will be devastated by these rate increases. We have 12.7 percent unemployment in California, with over 2.3 million people unemployed.

So, people can't find jobs, and at the same time, their insurance premiums are being jacked up. This is especially terrible because many of these people already saw their premium rates rise dramatically last year, and they know they face even more rate hikes next year.

In California, two million people have lost their health insurance in the past two years. That is one million people a year who find they can't afford health insurance.

And this is happening at a time when these companies are reaping billions. So what do I conclude? They have no moral compass. There is no standard of ethical conduct.

The people being hurt by these for-profit corporations are families with children. They are students and the elderly. Cancer survivors and small business owners. They are about to be crushed.

WellPoint will say that these premium rate hikes cannot be avoided. They will tell us that other factors are to blame: hospital charges, prescription drug prices, the rising cost of medical care. They blame the government. They blame the economy. But the fact is that they are making billions of dollars in profits.

If there was any doubt about whether corporate greed has anything to do with WellPoint's plan to jack up rates on customers, I think the Reuters investigation answers the question definitively.

In order to prevent these kinds of unfair premium rate hikes on Americans, I have introduced a bill that would establish a health insurance rate authority. It would give the Secretary of Health the mandate to see that rates are reasonable.

My bill would give the Secretary of Health and Human Services the authority to block premiums or other rate increases that are unreasonable. In about 20 states, including California, companies are not required to receive approval for rate increases before they take effect.

Under this proposal, the Secretary would work with the National Association of Insurance Commissioners to implement this rate review process and identify states that have the authority and capability to review rates now. That means states where the insurance commissioner is not empowered - like California - would get protection from unfair rate hikes.

The proposal would also create a Rate Authority, a seven-member advisory board to assist the Secretary. A wide range of interests would be represented: consumers, the insurance industry, medical practitioners, and other experts.

I think this proposal strikes the right balance. President Obama took this bill and put it in his version of the health insurance reform reconciliation bill. Unfortunately, it was taken out of the bill due to parliamentary rules, but we haven't given up.

We can't give up, because nine days from now, 800,000 Californians will get up to a 39 percent increase in their premium rate as a result of corporate greed, pure and simple.

The bottom line: We have a duty to protect the American people from this kind of greed. If a CEO thinks it is OK to deprive women of their health coverage when they become seriously ill with breast cancer, we can't trust them to do the right thing, period. That's why Congress must step in and fix this rate hike loophole in the health insurance reform law.

We have to put patients before profits. We have to protect the American people from unchecked greed.

I will likely offer my bill as an amendment to the financial regulatory reform legislation. The matter has already had a hearing in the Senate Health, Education, Labor and Pensions Committee. Urgent action is necessary because 800,000 people face these rate increases a week from Saturday.

Rest assured that I will do everything I can to make sure the Health Insurance Rate Authority bill becomes the law of the land. In the meantime, I implore WellPoint and Anthem Blue Cross to consider the wellbeing of their customers, and I call on them to halt their plan to jack up premium rates on May 1.

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