WellPoint: Profit at the Expense of Consumers

Posted on February 25, 2010
Filed Under Greed, Main | 1 Comment

Under the headline “Lawmakers accuse WellPoint, parent company of Anthem Blue Cross, of profiteering”  in the Thursday, Feb. 25 Los Angeles Times, Richard Simon and Duke Helfand report that “Congressional Democrats on Wednesday accused the parent company of Anthem Blue Cross of putting profits ahead of policyholders, saying the giant insurer padded its proposed rates while lavishing generous salaries and benefits on top executives.”

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Angela F. Braly: $Million Woman

Lawmakers grilled WellPoint Chief Executive Angela F. Braly and WellPoint’s chief actuary Cynthia Miller, who both saw nothing wrong in putting profits over human life.  According to the Times, Braly said WellPoint’s individual-policy business lost money in 2009 and was expected to earn less than a 2% profit in 2010. “It is always a challenging issue to raise rates. Our goal is to continue to serve members and have more members.”

“Uncontrolled premium increases lead to soaring profits for insurance company CEOs at the expense of consumers,” Sen. Max Baucus (D-Mont.),  chairman of the Senate Finance Committee, said in a statement.

According to the Times, “company documents obtained by congressional investigators showed the company paid 39 company executives $1 million or more in 2008 and spent more than $27 million for 103 executive retreats in 2007 and 2008. Company officials said some of the retreats were attended by insurance agents and brokers. In the hearing, Democrats displayed pictures of lavish resorts used by WellPoint for getaways and grilled Braly about executive pay, including her own salary of $1.1 million and stock compensation valued at $8.5 million last year.”

Miller, for her part, was amazingly disingenuous. She told lawmakers that “the average 25% rate hikes were necessary to counter rising medical costs and an exodus of younger and healthier policyholders who are dropping or reducing their coverage.”

Half of that is probably true — medical costs have been rising, but certainly not at 25% — but the second part? Let’s see. Health care costs are too high, so some policyholders drop coverage. So, let’s raise rates to offset the loss. What kind of thinking is that? What other business in their right mind would raise prices on products that consumers aren’t buying because the price is too high to begin with? One with a captive audience — older people who need the product and have to buy it.

File this one — again — under greed.

Comments

One Response to “WellPoint: Profit at the Expense of Consumers”

  1. Issac Maez on July 24th, 2011 5:49 pm

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