Obama takes California health insurer to the political woodshed
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With current plans stuck in second gear, the Obama administration has found the perfect vehicle to help get its healthcare overhaul out of the political mud: attacking a leading California insurance company.
Anthem Blue Cross is seeking to increase premiums for individual policyholders by as much as 39%, a move the company says is financially necessary.
But the proposal couldn’t come at a better time for the Obama administration, which has cast Anthem as the face of insurance company greed. In its attack, the government has used the company request to galvanize support, inside Congress and outside the Beltway, for healthcare reform, even though dealing with such hikes is usually a state, and not federal, issue.
President Obama himself upped the stakes, telling reporters Tuesday that the Anthem request was a sign of things to come.
“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; our deficits will continue to grow larger. And we have an obligation -- both parties -- to tackle this issue in a serious way.”
“On Anthem Blue Cross,” one reporter asked, “do you have the authority to go in and tell a private company they can’t charge that -- how will you stop them?”
“Well, I don’t have the authority as I understand it -- I can’t simply issue an executive order lowering everybody’s rates,” Obama acknowledged. “If I could I would have done that already and saved myself a lot of grief on Capitol Hill. That’s why reform is so important. That’s why the status quo is unacceptable.”
Obama went on to argue that he was hoping his forthcoming meeting with congressional leaders on healthcare “doesn’t end up being political theater ... I want a substantive discussion,” he said of the Feb. 25 session with Republicans and Democrats.
Obama’s complaints followed comments by Health and Human Services Secretary Kathleen Sebelius, who asked for “a detailed justification” for the increase.
In a letter to Leslie Margolin, president of Anthem Blue Cross, Sebelius called the increase “extraordinary” and said they were “up to 15 times faster than inflation.”
“Your company’s strong financial position makes these rate increases even more difficult to understand,” Sebelius wrote. “As you know, your parent company, WellPoint Incorporated, has seen its profits soar, earning $2.7 billion in the last quarter of 2009 alone.”
-- Michael Muskal
The Anthem Blue Cross headquarters is seen after the health insurer began informing its individual policyholders of rate hikes up to 39 percent to take effect at the beginning of March, on February 9, 2010 in Woodland Hills, California. Anthem Blue Cross, which has the highest number of individual customers in California, raised rates by as much as 68 percent in 2009. Health insurance companies in California can legally raise their rates at any time by as much and as they want.
