Though it may seem like the intro to a joke, it’s no laughing matter. WellPoint, which supplies medical insurance, including their Anthem Blue Cross plan, has imposed a rate increase of up to 39% for their customers in California. To say that thirty-nine percent is hefty is an obvious understatement. How do they defend this?
WellPoint Inc. attempts to justify the increases to Kathleen Sebelius, Secretary of Health and Human Services, by stating that the weak economy has healthy people dropping coverage or buying cheaper plans. They claim that the decline in premium revenue equates to a lack of funds to pay claims from the remaining customers. WellPoint says this trend resulted in a loss for them in 2009. This is why, they say, they want to raise rates to cover the losses expected in 2010 from the same cause.
If the economy picks up and people return to coverages temporarily canceled, you can bet that they won’t return that 39% increase. They also try to defend that “most” of their customers will see an average of “only” 24% when the increases are imposed on March 1, 2010. Only 24%?!?
WellPoint claims to have offered an alternative solution if people can’t afford the rate increase: lower increases, in exchange for higher out-of-pocket expenses. Uhm no. If the patient has to pay more out of pocket, the patient is still absorbing the increases. That, too, is just semantics. It’s no real alternative for their customers. It’s still forcing the patient to pay a huge increase so that they can continue to rake in the bucks.
It may very well be true that carriers suffered losses due to the downturn in the economy. Why should WellPoint be different than any other person or company in the country (or world, for that matter)? We are ALL suffering from it. To allow them to increase rates to cover losses is markedly inequitable. The rhetoric may play well, but when one thinks it through, WellPoint certainly doesn’t give up their profits. Why, then, should they be allowed to “give” us their losses? If they lose money in one state this year, they can pay for that from the profits of overall profits, profits from previous years, or sell off one of their many high-dollar assets. But they don’t get to add weight to an already overburdened population, force those people to bear the company’s financial woes while ignoring the suffering that it will impose upon their insureds.
The facts? WellPoint made a profit of $4.75 billion in 2009, including $2 billion from the sale of a business. That $2 billion shouldn’t be discounted, because most people have found they have to give up assets to pay bills. Nearly five billion dollars in profits during the year that they claim saw a loss of as much as 1/3 of their customers, and WellPoint still wants a rate increase?
In this economy, we all have to tighten our belts, per se. WellPoint shouldn’t be a special exception. It belies their very name to complain that people don’t need their services because they’re healthy.