IBJNews

Senate probing WellPoint, others over small-biz rates

Back to TopCommentsE-mailPrintBookmark and Share

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.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Kent's done a good job of putting together some good guests, intelligence and irreverence without the inane chatter of the other two shows. JMV is unlistenable, mostly because he doesn't do his homework and depends on non-sports stuff to keep HIM interested. Query and Shultz is a bit better, but lack of prep in their show certainly is evident. Sterling obviously workes harder than the other shows. We shall see if there is any way for a third signal with very little successful recent history to make it. I always say you have to give a show two years to grow into what it will become...

  2. Lafayette Square, Washington Square should be turned into office parks with office buildings, conversion, no access to the public at all. They should not be shopping malls and should be under tight security and used for professional offices instead of havens for crime. Their only useage is to do this or tear them down and replace them with high rise office parks with secured parking lots so that the crime in the areas is not allowed in. These are prime properties, but must be reused for other uses, professional office conversions with no loitering and no shopping makes sense, otherwise they have become hangouts long ago for gangs, groups of people who have no intent of spending money, and are only there for trouble and possibly crime, shoplifting, etc. I worked summers at SuperX Drugs in Lafayette Square in the 1970s and even then the shrinkage from shoplifting was 10-15 percent. No sense having shopping malls in these areas, they earn no revenue, attract crime, and are a blight on the city. All malls that are not of use should be repurposed or torn down by the city, condemned. One possibility would be to repourpose them as inside college campuses or as community centers, but then again, if the community is high crime, why bother.

  3. Straight No Chaser

  4. Seems the biggest use of TIF is for pet projects that improve Quality Of Life, allegedly, but they ignore other QOL issues that are of a more important and urgent nature. Keep it transparent and try not to get in ready, fire, Aim! mode. You do realize that business the Mayor said might be interested is probably going to want TIF too?

  5. Gary, I'm in complete agreement. The private entity should be required to pay IPL, and, if City parking meters are involved, the parking meter company. I was just pointing out how the poorly-structured parking meter deal affected the car share deal.

ADVERTISEMENT