Tag Archives: Wellpoint
As part of his last-ditch effort to revive the Senate’s undead health reform bill, President Obama has proposed a federal board to veto health insurance premiums it finds “unreasonable and unjustified.” In case you’re wondering, all 50 states already do this, albeit with the countervailing requirement that premiums must also be “adequate” to assure insurance carrier solvency—a key requirement the President ignores.
His proposal is the obvious result of his Administration’s high dudgeon over Wellpoint’s 39% individual premium hikes in California (where it has lost millions). The argument is that such increases are unconscionable from an industry that earned “$12 billion in profits last year.” Please note the inapt comparison of percentages with dollars, a diversionary, demagogic tactic often used to enrage the innumerate while failing to note Wellpoint’s 2009 operating profit margin of 4.8% or the entire industry’s hopelessly pedestrian 2.2%. Even more absurd was one congresswoman’s snarky suggestion that the real reason for the increases was to maintain WellPoint CEO Angela Braly’s $9 million annual compensation—equal to twenty-eight cents per member per year. The cause of premium increases is not profits or executive compensation. To paraphrase President Clinton, “It’s rising medical costs, stupid!”