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Senate probing WellPoint, others over small-biz rates

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The Senate health care committee chairman said the panel is investigating how health insurers—including Indianapolis-based WellPoint Inc.—price the coverage they sell to small businesses, which have struggled for years with soaring premiums.

Sen. Tom Harkin, D-Iowa, has sent letters to several big health insurers, including UnitedHealth Group Inc., WellPoint and Aetna Inc., asking for information on how they set rates and premiums for policies covering groups of 50 people or fewer.

The senator, who announced the inquiry at Tuesday's hearing, also requested information on individual compensation that exceeds $5 million annually, according to a statement from his office.

WellPoint did not immediately respond Wednesday morning to IBJ questions about the investigation.

Democrats and the insurance industry have been in an all-out struggle over the health care overhaul sought by President Barack Obama. Democrats have pushed for stripping the insurers of their decades-old exemption from federal antitrust laws.

In August, Rep. Henry Waxman, D-Calif., announced an investigation similar to Harkin's. He sent letters to six insurers requesting details about their plans for small businesses and how coverage decisions are made. Waxman chairs the House Energy and Commerce Committee.

The Senate letters note that a survey of state insurance commissioners found small businesses face average rate increases of 11 percent to 16 percent for 2010.

But some business leaders told a Senate Health, Education, Labor and Pension Committee hearing Tuesday that they're dealing with even larger price hikes.

Walt Rowen, owner of Susquehanna Glass Co. in Columbia, Pa., said he saw an initial quote for coverage that involved a 128-percent cost increase. He eventually found a policy that cost 43 percent more.

Rowen said before Tuesday's hearing that he has probably changed insurance carriers eight times in the past 10 years to get better rates. He also has introduced high-deductible plans to reduce premiums.

"This year it's just absolutely astronomical ... it's ridiculous," said Rowen, whose company provides coverage for about 24 employees.

Health insurance premiums track directly with the cost of medical care, said Robert Zirkelbach, a spokesman for the insurance industry trade group America's Health Insurance Plans.

"If the key issue here is how to make health care coverage more affordable for small businesses, then we need to address the underlying cost of medical care," he said.

Zirkelbach also noted that insurers are required to show that their premium increases for small businesses are justified, and many states limit or restrict the variation in small business premiums.

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  1. In reality, Lilly is maintaining profit by cutting costs such as Indiana/US citizen IT workers by a significant amount with their Tata Indian consulting connection, increasing Indian H1B's at Lillys Indiana locations significantly and offshoring to India high paying Indiana jobs to cut costs and increase profit at the expense of U.S. workers.

  2. I think perhaps there is legal precedence here in that the laws were intended for family farms, not pig processing plants on a huge scale. There has to be a way to squash this judges judgment and overrule her dumb judgement. Perhaps she should be required to live in one of those neighbors houses for a month next to the farm to see how she likes it. She is there to protect the people, not the corporations.

  3. http://www.omafra.gov.on.ca/english/engineer/facts/03-111.htm Corporate farms are not farms, they are indeed factories on a huge scale. The amount of waste and unhealthy smells are environmentally unsafe. If they want to do this, they should be forced to buy a boundary around their farm at a premium price to the homeowners and landowners that have to eat, sleep, and live in a cesspool of pig smells. Imagine living in a house that smells like a restroom all the time. Does the state really believe they should take the side of these corporate farms and not protect Indiana citizens. Perhaps justifiable they should force all the management of the farms to live on the farm itself and not live probably far away from there. Would be interesting to investigate the housing locations of those working at and managing the corporate farms.

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