What's the point, WellPoint?

Wendell Potter

Executives at health insurance giant WellPoint are predicting they will have to implement “double-digit plus” rate increases next year, demonstrating once again just how politically tone deaf and profit-obsessed they apparently are.

When I read WellPoint CEO Joe Swedish comments in Modern Healthcare that, there will “undoubtedly be remarkable price increases” for health insurance sold through the Obamacare-created exchanges, I remembered the outrage his firm provoked four years ago when it told its Anthem Blue Cross of California policyholders that it planned to hike their premiums by as much as 39 percent. When many of those policyholders complained to the media and members of Congress, it all but assured the passage a few weeks later of the Affordable Care Act, which contained numerous consumer protections and regulations the insurance industry hated.

Just before news of WellPoint’s proposed rate increase reached Capitol Hill in February 2010, reform advocates feared the legislation would indeed fall short of the needed votes.

But when WellPoint’s rate increase plans made headlines, Democrats seized on it, especially after California’s Republican Insurance Commissioner at the time, Steve Poizner, threatened legal action against the company.

The rate hikes “could have a devastating financial impact on hundreds of thousands” of the company’s policyholders, Poizner wrote in a letter to then-CEO Angela Braly.

In Washington, Democratic Rep. Henry Waxman, the chairman of the House Energy & Commerce Committee — whose district included many of the 800,000 Californians affected by the proposesd rate increase — launched an investigation and sent a letter to Braly asking her to justify the company’s actions.

In her own letter to Braly, Secretary of Health and Human Services Kathleen Sebelius wrote that the WellPoint proposal "reminds us that too many Americans can be left with unaffordable insurance each time the rates or rules change in the private market.”

The proposed rate increase, which came just days after the company reported $4.7 billion in profits for 2009, almost twice as much as the year before, also gave President Obama what might have been his most effective talking point for reform. “If we don't act, this is just a preview of coming attractions,” Obama said. “Premiums will continue to rise for folks with insurance. Millions more will lose their coverage altogether (and) our deficits will continue to grow larger.”

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This story is part of Wendell Potter. Former CIGNA executive-turned-whistleblower Wendell Potter writes about the health care industry and the ongoing battle for health reform. Click here to read more stories in this blog.

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Copyright 2014 The Center for Public Integrity. This story was published by The Center for Public Integrity, a nonprofit, nonpartisan investigative news organization in Washington, D.C.