When Angela F. Braly, the chief executive of insurance giant WellPoint Inc., came to Capitol Hill last month to defend the company’s recent rate hikes in California, she told lawmakers that her company supported “responsible, sustainable healthcare reform.”
It was not the first time the nation’s largest insurer cast itself as an agent of change. In 2007, just as Democrats took control of Congress, WellPoint pledged that its charitable foundation would spend $30 million over three years as part of a “comprehensive plan to help address the growing ranks of the uninsured.”
But according to tax filings, company promotional material and former executives familiar with the initiative, WellPoint never came close to fulfilling that pledge. A company spokeswoman disputed that Wednesday.
However, WellPoint’s public records indicate that from 2007 to 2009 the foundation gave less than $6.2 million in grants targeted specifically at helping uninsured Americans get access to coverage and care -- barely one-fifth of what was promised and just 11% of the charity’s total giving over the last three years.
“It was just not something that the company really wanted to do,” said one former executive, who, like others interviewed for this story, asked not to be identified out of concern that discussing WellPoint could have adverse career consequences. “So it went by the wayside.”
WellPoint spokeswoman Kristin Binns countered that the foundation did fulfill its $30-million commitment in mid-2009.
“It’s a complicated reporting process, but we do have teams in place to track all donations to ensure we not only meet that $30-million goal, which I’m assured we have, but also that we continue donating to uninsured causes,” Binns said in an e-mail response to questions.
But she declined to provide details. “I don’t believe we publicly break down the grant amount and institution,” Binns said.
Today, WellPoint is a leading opponent of Democratic healthcare legislation and a favorite target of President Obama and his congressional allies, who have seized on the company’s premium increases to justify their calls for a sweeping healthcare overhaul.
WellPoint, an Indianapolis company with some 34 million customers nationwide, was also under intense political pressure in late 2006 and early 2007 when it unveiled its Plan for Covering America’s Uninsured.
In California, the company’s Anthem Blue Cross subsidiary had been forced to settle a series of lawsuits from customers whose benefits had been cut off when they got sick.
And Gov. Arnold Schwarzenegger was about to embark on a bid to step up regulation of the industry as part of his proposed healthcare overhaul.
Announcing WellPoint’s plan Jan. 8, 2007, the company’s president and CEO, Larry C. Glasscock, said, “A core focus of our company’s strategy is to reduce the rate of the uninsured and the underserved.”
In the plan, WellPoint called on state governments to expand public health insurance programs for children and adults. The company also said it would develop insurance plans tailored to encourage people without coverage to buy a plan.
WellPoint’s only specific financial commitment was a promise to provide $30 million from its foundation “to support community and state-based programs related to the company’s uninsured initiatives across the country.”
There were signs in the first year that the company would not meet its promised goal.
In 2007, the WellPoint Foundation provided nearly $17.8 million in grants to 150 organizations, according to the charity’s tax filings. Of that, a little more than $1.5 million went to groups that were specifically targeting the uninsured.
These included: $557,333 to the Institute for Local Government in Sacramento for “programs to enroll uninsured children,” $360,000 to the Dodger Dream Foundation in Los Angeles for “covering the uninsured, health education,” and $75,000 to the National Institute for Health Care Management Foundation in Washington for “uninsured program support.”
The tax returns include a detailed list of each organization that received a grant, how much it received and the purpose of the contribution.
Some organizations, such as the American Diabetes Assn., received grants for education programs. There were grants for disaster relief to the American Red Cross and the Great Plains Health Care Foundation, grants to hospitals to help them buy equipment and scholarship grants to 16 college students.
The largest share of the foundation’s donations in 2007, more than $6.6 million, went to match individual gifts that WellPoint employees made to charities.
Binns at WellPoint said that some of those gifts benefit the uninsured, but she provided no details.
The foundation’s website lists schools and disaster relief as priorities for employee giving, but not service to the uninsured.
The reason for the relatively small contribution to the uninsured initiative was simple, said another former WellPoint executive: “It was going to have to come out of earnings.”
In 2007, the company was recording steady profits, according to its quarterly financial filings. But Wall Street investors were growing increasingly concerned about how much the company was paying out in medical claims compared with how much it was collecting in premiums.
Tax records indicate that the foundation nonetheless boosted its overall giving in 2008 to $22.1 million. Once again, however, grants to organizations working to help the uninsured made up a small fraction of the total giving, just $3.3 million.
The WellPoint Foundation’s 2009 tax returns are not yet available.
But in a report on giving posted on its website, WellPoint reported that the foundation handed out nearly $14.8 million in grants last year.
Of that, $1.35 million went for grants dedicated to “access to care/uninsured/healthcare disparities,” according to the website. That was the second-smallest category of healthcare-related giving.
The page on the foundation website labeled “Foundation Initiatives” does not include any mention of WellPoint’s 2007 Plan for Covering America’s Uninsured.