»Article posted on: March 17, 2010 by: Don Butterfield
California investigating health insurers for illegal business practices
Based on reports that the five largest health insurance companies in California are denying up to 39.6 percent of insurance claims, California’s attorney general recently announced an investigation into potentially illegal business practices.
Attorney General Edmund G. Brown, Jr., recently issued a subpoena for financial documents from the seven largest health insurance companies in the state.
“We have been looking at these companies for a number of months and are very concerned that some of them are unjustly raising premiums and denying payment of legitimate claims,” Brown said in a recent news release. “Not only are the rate increases devastating to Californians strapped by the economy, but in some cases, they are possibly illegal.”
The investigation will focus on how health insurance companies are spending the premiums of their members, including the amount spent on actual health care compared to costs for administration and marketing, and, ultimately profit.
A Whirlwind of Dissatisfaction
This investigation comes on the heels of a recent announcement by Anthem Blue Cross that they plan to increase health insurance rates in California by as much as 39 percent for roughly 800,000 individual health insurance policy holders.
An independent California actuary was appointed to investigate whether Anthem is in violation of state law by spending less than 70 percent of its premiums on actual customer benefits.
U.S. Health and Human Services Secretary Kathleen Sebelius was recently quoted in the Los Angeles Times as saying, “These extraordinary increases are up to 15 times faster than inflation and threaten to make health care unaffordable for hundreds of thousands of Californians, many of whom are already struggling to make ends meet in a difficult economy.”
With affordable health insurance increasingly harder to find, the U.S. House of Representatives recently voted to revoke the health insurance industry’s antitrust exemption. The repealing of the antitrust exemption is designed to help foster affordable health insurance by increasing competition.
filed under HEALTH INSURANCE | tags: HEALTH INSURANCE
journey home said:
Mar 17, 10 at 1:22 pmThe fact remains that big insurance by refusing care to patients and reimbursement to doctors over typos has ticked everyone off. They have a monopoly over the whole process and a well financed lobby team (including Lieberman’s wife) and representatives on both sides of the isle.
A friend of mine recently laid off just he and his spouse is paying $2,500.00 dollars a month for his COBRA. Health insurance costs more than his mortgage. Anyone taking up the insurance industry’s cause doesn’t know what they are talking about.
If you think the insurance companies are going to voluntarily lower their cost while having a monopoly over the process – you are being disingenuous …Over 60% of all US bankruptcies are attributable to medical problems. Most victims are middle class, well educated and have health insurance - (The American Journal of Medicine)
The insurance companies and their representatives in Congress would love to perpetuate a business model that is crippling our overall economy – a bunch of great Americans aren’t they?
A slavish focus on profit margin might be good for the individual or a business, but it is one helluva lousy way to “govern” a Country. The GOP and the major media outlets being wholly owned subsidiaries of Corporate America have a hard time with that concept.
Paul Burke
Author-Journey Home
Shannon said:
Mar 22, 10 at 9:15 pmI wonder what the cause/effect of the Health Care Reform will be in relation to this.
Bill said:
Apr 08, 10 at 9:23 pmIt’s funny that out of all states, California, one of the poorest and most financially devastated, is going to raise insurance fees when most of their state can’t even afford to have a policy in the first place. Thank goodness for health care reform!
Repeatedly Angry Guy said:
May 12, 10 at 10:30 pmMakes sense to me. Washington is useless, lobbyist have control - let’s take them down on the state level. If insurance companies aren’t playing fair… Don’t let them play in our state. We can pressure our local reps, and most importantly, why not the AG? Isn’t it his job?
My Texan buddy tells me Kaiser isn’t allowed to do business in his state, how did that happen, and how do we make MetLife and the others worry about loosing all it’s customers one state at a time.
We still have the ability to vote with our dollars, we just have to decide we won’t pay for insurance since we don’t believe they will actually deliver on their promise of security.