IBJNews

WellPoint, insurance commissioner get earful from lawmakers

Back to TopCommentsE-mailPrintBookmark and Share

Executives from WellPoint Inc. and the Indiana Department of Insurance both received a grilling Wednesday morning before the Committee on Insurance of the state House of Representatives.

The hearing was called by Committee Chair Rep. Craig Fry, D-Mishawaka, because WellPoint customers buying health coverage on their own will face on average price hike of 21 percent come March 1. Some will see rates spike as much as 34 percent, or, if they have entered a higher age bracket, even higher rates.

Fry and other lawmakers on the committee fired numerous questions at Doug Webber, Indiana's acting insurance commissioner, and at Rob Hillman, president of WellPoint’s Indiana subsidiary, Anthem Blue Cross and Blue Shield. The tiny committee room in the basement of the Indiana Statehouse was filled to standing-room capacity during the nearly two-hour hearing.

With TV news cameras rolling, Fry forced Hillman to defend those increases in light of WellPoint’s 2010 profits that topped $2.5 billion, not including the sale of a pharmacy business, as well as multimillion-dollar lobbying expenses and what Fry called “enormous salaries” for executives.

“I don’t know how you defend that kind of increase,” Fry said. “I understand you guys are in business to make money. … But people can’t afford your product.”

Hillman did defend the increases, blaming medical innovations for constantly driving up costs. On top of that, he said, increasing numbers of healthy people are dropping health insurance, leaving fewer dollars to cover the medical bills of unhealthy people who must keep coverage. That has forced WellPoint to raise rates even faster, he said.

Hillman downplayed the health insurance industry’s profits and executive pay, saying they represent little more than 2 percent of the premiums. But he agreed with Fry that continuing to raise premiums to keep ahead of rising medical costs puts WellPoint’s business in jeopardy.

“The affordability of health care is the biggest risk for our business,” he said, adding, “I firmly believe we are at a tipping point. We may be back here in six months because this problem is not going away. We are on a very bad path right now.”

Before sparring with Hillman, Fry zeroed in on Webber, particularly when the acting commissioner said the Indiana insurance department does not inquire what percentage of premiums Anthem takes as profit.

“Profits aren’t brought into consideration? How do you set rates if you don’t take everything into consideration?” Fry asked.

Webber said the insurance department verifies that Anthem spends at least 55 percent of premiums on medical care, but does not require an accounting of the other 45 percent.

Webber and his chief deputy, Robyn Crosson, emphasized that the Indiana insurance department hires an independent actuary to review each premium increase requested by Anthem—something that the state of California is only now doing to investigate WellPoint’s 25-percent increase in that state.

But Fry objected that the review is done by only one person—and any pushback against Anthem happens behind closed doors. He would prefer an open hearing.

“Wouldn’t that be appropriate when you’re dealing with people’s money?” Fry asked.

After the hearing, Fry said he plans to insert language that would require an open rate-review hearing into Senate Bill 357, which makes various changes to insurance regulations. He said his committee could consider that amendment as early as Thursday.

Fry said he wants “a process that’s more open, not done in the backroom.”

ADVERTISEMENT

  • state employee
    I have Anthem as offered through the state. Might this be a conflict of interest to have approving increase while the state has mutiple employees required to accept Athem if they want insurance?
  • Wow, just wow.
    As someone whose individual premium went up 46% for my January renewal, I have been surprisingly calm. Maybe because I am entering a new age bracket (26 years old) and because they just made certain chemotherapies less expensive lowering the co-pay from 20% down to 0%.

    When $10K a month drugs require a $2K co pay, that's pretty hard to come up with when you're sick. So I can understand why the premium increase could be justified.

    BUT, when I read that Anthem is only required to spend 55% of premiums on actual healthcare, my jaw dropped.

    I thought it was supposed to be much, much higher.

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. I had read earlier this spring that Noodles & Co was going to open in the Fishers Marketplace (which is SR 37 and 131st St, not 141st St, just FYI). Any word on that? Also, do you happen to know what is being built in Carmel at Pennsylvania and Old Meridian? May just be an office building but I'm not sure.

  2. I'm sorry, but you are flat out wrong. There are few tracks in the world with the history of IMS and probably NO OTHER as widely known and recognized. I don't care what you think about the stat of Indy Car racing, these are pretty hard things to dispute.

  3. Also wondering if there is an update on the Brockway Pub-Danny Boy restaurant/taproom that was planned for the village as well?

  4. Why does the majority get to trample on the rights of the minority? You do realize that banning gay marriage does not rid the world of gay people, right? They are still going to be around and they are still going to continue to exist. The best way to get it all out of the spotlight? LEGALIZE IT! If gay marriage is legal, they will get to stop trying to push for it and you will get to stop seeing it all over the news. Why do Christians get to decide what is moral?? Why do you get to push your religion on others? How would legalizing gay marriage expose their lifestyle to your children? By the way, their lifestyle is going to continue whether gay marriage is legalized or not. It's been legal in Canada for quite a while now and they seem to be doing just fine. What about actual rules handed down by God? What about not working on Sundays? What about obeying your parents? What about adultery? These are in the 10 Commandments, the most important of God's rules. Yet they are all perfectly legal. What about divorce? Only God is allowed to dissolve a marriage so why don't you work hard to get divorce banned? Why do you get to pick and choose the parts of the Bible you care about?

  5. Look at the bright side. With the new Lowe's call center, that means 1000 jobs at $10 bucks an hour. IMS has to be drooling over all that disposable income. If those employees can save all their extra money after bills, in five years they can go to the race LIVE. Can you say attendance boost?

ADVERTISEMENT