Sebelius Knocks Insurers for Big Profits and Big Rate Hikes
EmailABC News' Bret Hovell reports: Health and Human Services Secretary Kathleen Sebelius Thursday unveiled a government report which she said “shines a light on the urgency for health reform,” and pins the rise of premiums in the individual healthcare market squarely on the profit margins of large insurance companies. “I think this kind of rate increase gives a highlight to why the president said a year ago we need to address health reform, comprehensive health reform as part of addressing the economy,” Sebelius said. News that Anthem Blue Cross in California would be raising premiums on some customers up to 39 percent has drawn criticism from the Obama administration. The report, which is titled “Insurance Companies Prosper, Families Suffer: Our Broken Health Insurance System,” says that increases of that magnitude are not unique. It cites Anthem of Connecticut for requesting a 24 percent rate hike in 2009; Blue Cross/Blue Shield of Michigan for a requested 56 percent rate increase last year; and Regency Blue Cross Blue Shield of Oregon for a 20 percent premium increase. “The five largest insurers in America have declared more than $12 billion worth of profits in 2009,” Sebelius said. “[Anthem Blue Cross of California] alone posted a $2.7 billion profit in the fourth quarter of 2009, just a week before they filed for a 39 percent rate increase.” The report, and effort to refocus the healthcare debate at least in part on the large profits of insurers, comes one week before a scheduled healthcare summit at the White House, at which the Obama administration plans to sit down with a bipartisan group of leaders from the House and the Senate to restart the stalled negotiations. Anthem Blue Cross says that their profits were not a factor in the planned rate hike. It says the hike is a matter of economics as health care costs continue to rise. “Rate increases reflect the increasing underlying medical costs in the delivery system which are unsustainable,” said Brian Sassi, an Anthem Blue Cross executive, in a letter to Sebelius last week. At her press conference, Sebelius contended that the profits were out of line with the increase in health care costs. “To suggest that this is entirely in line with even health care costs, which clearly are still exceeding typical inflation costs, these profits are wildly excessive, are way over anybody's estimate,” Sebelius said.
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Knocking them, isn’t effective. If you want effective, you have to be willing to hit them with restrictive legislation.
Posted by: Rick McDaniel | February 18, 2010, 3:00 pm 3:00 pm
NYT article, In California, Exhibit A in Debate on Insurance by KEVIN SACK
states about Sebelius:
“She did not mention that most of WellPoint’s fourth-quarter surge came from the one-time sale of a business unit or that Anthem lost money on the individual market in California last year, as company officials assert.”
“Anthem was the whipping boy the White House needed, the confrontation has also reinforced an emerging shift of focus in Washington from the need for universal coverage to the need for serious cost control.”
We all need accurate information to make informed decisions about the problems facing our country. Regurgitating one-sided information from the Obama administration does not serve the public interest. Their massive PR campaign going on right now makes me trust them less…not more.
Posted by: wow | February 18, 2010, 3:04 pm 3:04 pm
Geee-and some politician thinks generating MORE Gov. BS is going to lower already increasing costs…GIVE ME A BREAK..IT WILL NOT..DODAH’s….
IT WILL NOT–IT WILL NOT–IT WILL NOT..GET IT YET?????? IT WILL NOT…IT WILL NOT….oh I get it..I need to draw a picture WITH CRAYONS…sorry–keep forgetting they a POLITCIANS…NOT normal people…
Posted by: rgw | February 18, 2010, 3:06 pm 3:06 pm
So–Congress gets huge pay raises , great PRIVATE health insurance , a generous retirement and they have the gall to call profiteering obscene.
Posted by: scotty | February 18, 2010, 3:33 pm 3:33 pm
Anyone who has been in the work force for the past 15-25 years and has not noticed that their health benefits declining along with their wages to pay for “that privelege” is NOT paying attention. This administration can and will change this scenario, if we support them. No..it will not be instant gratification..it will be longer term and help prevent our nation from going bankrupt. I only hope that Ms. Sebelius and Mr. Obama get tougher, tougher and more outspoken on this issue, backing it up with this type of “hypocritical example” Anthem just
gave us.
Posted by: CND FOX | February 18, 2010, 3:47 pm 3:47 pm
Kathleen Sebelius – hussein’s SECOND TAX CHEAT candidate for HHS secretary – used undocumented, phony deductions to cheat the federal government out of more than $7000 over three years.
She LIED repeatedly to the IRS!!! Do you actually expect she’ll tell the truth to the American people?????
Posted by: TeaPartyPatriot | February 18, 2010, 3:58 pm 3:58 pm
She needs to look at her own CRIMINAL activities
Posted by: What? | February 18, 2010, 4:09 pm 4:09 pm
Yeah, that’s it TeaPartyPatriot and What?…obfuscate the “issue” with a personal attack on the messenger. That “always” solves problems as well as tipping off the “depth of your knowledge”.
Posted by: CND FOX | February 18, 2010, 4:13 pm 4:13 pm
“We all need accurate information to make informed decisions about the problems facing our country.”
So why did you selectively quote the article?
“She did not mention that most of WellPoint’s fourth-quarter surge came from the one-time sale of a business unit or that Anthem lost money on the individual market in California last year, as company officials assert. California’s insurance commissioner, Steve Poizner, said Saturday that he had a “healthy skepticism” about the claim.”
Posted by: Ryan C | February 18, 2010, 4:47 pm 4:47 pm
There are two sides to this issue Ryan. One side was portrayed in this article.Poisner’s office is investigating and we will find out the truth.
Our family spent many days in the hospital this past year and our insurance was well worth it.
Hospital costs in CA are ASTRONOMICAL right now. THAT is not the insurance companies fault. We covered our deductible in the first emergency visit and our deductible is $7,000.00. What I want to know is why are medical COSTS so high?
Posted by: wow | February 18, 2010, 4:59 pm 4:59 pm
Interesting the UHC group reported profits of $3.8B on revenues of $87.1B or 4.6 % of income. Not a huge percentage given the revenue base. Their tax expense was $1.8B or about half of the profits. Ms. Sebilius should ask the Feds to give the tax receipts back to the insured customers.
Even if the Feds wanted to take away all the profit and a lot of teh SGA expenses, we would still be paying very high premiums.
Ms. Sebilius fails to tell us that.
Posted by: scott jeffries | February 18, 2010, 6:28 pm 6:28 pm
Interesting the UHC group reported profits of $3.8B on revenues of $87.1B or 4.6 % of income. Not a huge percentage given the revenue base.
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No indication of ‘administrative’ costs – which would of course include executive salaries and any ‘bonuses’. Wonder what percentage of the revenues that sucks up.
Posted by: tierra | February 18, 2010, 6:37 pm 6:37 pm
Why not the Insurance Companies – big oil has been doing it for years.
Posted by: Morris98 | February 18, 2010, 6:59 pm 6:59 pm
No indication of ‘administrative’ costs – which would of course include executive salaries and any ‘bonuses’. Wonder what percentage of the revenues that sucks up.
Posted by: tierra | Feb 18, 2010 6:37:34 PM
True. Its always good to look at lobbying and advertising expenses, too.
Posted by: progressive mama | February 18, 2010, 7:14 pm 7:14 pm
why are medical COSTS so high?
Posted by: wow | Feb 18, 2010 4:59:04 PM
One great thing about the health care reform bills is the pilot programs designed to address this. Atul Gawande is a very good medical writer for the New Yorker. He wrote a good article called Testing, Testing back in December, and it addresses the cost issue. (I tried to clip it, but copyright issues might prevent the mods from keeping that up, so you can google it. Worth a read.)
Posted by: progressive mama | February 18, 2010, 7:17 pm 7:17 pm
What we really need is a single-payer health care system: excluding the corporate health insurers entirely is the only way out of this mess. We would need a bit more than $900 billion per year to fully fund a US single-payer system – $900 billion per year in total, not $900 billion in addition to our current government spending on health care.
In 2007, the combined Federal, State, and local government expenditure on health care was $1035.7 billion. So, we can fully nationalize health care under a US single-payer solution, and cut government health care spending by about $100 billion per year at the same time. No additional taxes would be needed.
Additionally, adopting a US single-payer health care system will free up more than $1.2 trillion per year in private funds no longer needed to pay for – largely illusory – private health insurance. These funds would be better spent on nearly anything else.
The bottom line is that we are already paying for universal health care – we just aren’t receiving it.
/Data from: the Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group; U.S. Dept. of Commerce, Bureau of Economic Analysis; the U.S. Bureau of the Census; the U.K. National Health Service; and the U.S. Central Intelligence Agency World Factbook.
Posted by: AC | February 18, 2010, 7:28 pm 7:28 pm
If I use the pharmacy-by-mail program with Excellus Blue Cross Blue Shield in Rochester [NY], a 3-month supply of GENERIC bupropion is $470. I can get the same prescription filled at Walmart for $129 cash. When asked about the price, they said “you must have a high deductible” (which apparently allows them to soak me). $2.61/pill vs $0.71/pill – and they’re giving me grief for canceling the prescription.
Posted by: m reynolds | February 18, 2010, 7:41 pm 7:41 pm
A year ago “insurance reform” wasn’t mentioned. His health care legislation (fiasco) only became “insurance reform” after voters soured on the first 2 attempts to get them on board. People still aren’t buying it, no matter how many dems (promise to) retire, or lose reelection, or sell their votes for hundreds of millions of dollars.
Posted by: smartlillena | February 18, 2010, 8:34 pm 8:34 pm
What we really need is a single-payer health care system
———-
Well, yeah. I’m all in. Now what we can do about the others who disagree and the Congress?
Posted by: progressive mama | February 18, 2010, 8:47 pm 8:47 pm
Even worse than the insurance companies are those greedy, selfish farmers! Imagine, making a profit by selling food! Don’t they know we all need food! How dare they make a profit! What we need is a single grower system where the government buys all the food and determines who has the privilege of buying steak and who gets stuck with hot dogs. That would be great!
Posted by: Woody | February 18, 2010, 9:06 pm 9:06 pm
30 minute visit to the emergency room = $2700.00, A month supply of Enbrel = $1500, five minutes with my family doctor = $150.00.
Sure it is the evil insurance companies, people need to wake up.
Posted by: Steve | February 19, 2010, 12:18 am 12:18 am
Medical costs are inflated because insurance will not pay full price if they can litigate it. So hospitals “overcharge” to get the money they need from tight fisted insurance companies.
Face it folks, the entire medical scheme is a racket. No one is getting out of life alive… yet the medical profession wants to spend $25,000 on an 80 yr old grandma to prolong her life another week so they can get the billing out.
Obama tried to meet the GOP halfway to make some progress on this point, which is why we were not looking at a single payer, because he tried to meet them halfway with a previous bill of theirs.
They had lots of words to scare America into fearing Gov. Run health care while failing to mention that all of our brave soldiers get Gov. Run health care… that Medicare and Medicaid are both “socialist” programs.
So thank you G”No”P’ers… thanks for standing up for big business and helping them stamp out real freedoms.
Posted by: DewyB | February 19, 2010, 10:40 am 10:40 am
Why can’t a company (only those who don’t support Obama) make a profit? Note the Obama administration says nothing about the $billions that Hollywood makes, of the $billions that the trial lawyers make…because they support Obama. Obama is pushing Socialism on us and his lap dog administration (and the media) are carrying his water.
Posted by: Peter King | February 19, 2010, 4:16 pm 4:16 pm
DewyB: “Obama tried to meet the GOP halfway to make some progress …”
You can’t be serious.
Posted by: Woody | February 20, 2010, 8:09 am 8:09 am
In my mind not enough coverage on this fact. We are all going to pay as this is only one state. The insurance companies have been running rampant on all of us for years and we had no recourse. We will now, if the health care plan goes through. I hope you all understand that without this plan your rates will skyrocket. Remember, they are the only ones making profits even during a recession. Just think of the people with no health care and who cannot get it. Indirectly we are paying for them. As for oil companies…we can address that later and just because one rakes us over the coal does not give us an excuse not to work toward a better health care plan.Saying that about the oil companies is an excuse to do nothing.
Posted by: talmag | February 20, 2010, 11:01 am 11:01 am