Netting $2.5 billion in profits last year wasn't enough for WellPoint, the nation's largest insurance company. Now, WellPoint's affiliate, Anthem Blue Cross and Blue Shield, is suing the state of Maine for refusing to guarantee it a profit margin in the midst of a painful recession.
Blue Cross. Blue Shield. That's WellPoint -- the largest insurer in America. They're suing an entire state for putting people over profits, and people need to know.
Liz Fowler, a former public affairs executive for Indianapolis-based health insurance giant WellPoint, helped to craft health-care reform legislation being proposed by Senate Finance Committee Chairman Max Baucus.
It's a connection that is drawing criticism from some reform advocates who support the creation of a public health plan that would compete against commercial insurers such as WellPoint. Baucus' bill does not call for the creation of a public plan.
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"This just sounds like another example of the revolving door between government and industry," said Dr. Robert Stone, a Bloomington physician who also is director of the advocacy group Hoosiers for a Commonsense Health Plan. "We don't really know how much influence her job at WellPoint had."
The Los Angeles Times reported today that the California-based Consumer Watchdog has submitted a letter to Attorney General Jerry Brown calling for an investigation of insurance giants Wellpoint and United HealthCare (UHC). The complaint comes in response to the insurance companies’ practice of actively encouraging employees to engage in anti-health care reform political activity. According to Consumer Watchdog, "while coercive communications with employees may be legal, if abhorrent, in most states, California’s Labor Code appears to directly prohibit them."
For-profit health insurance giant WellPoint fired off an email blast to its customers (using its Anthem Blue Cross Blue Shield subsidiary) yesterday attacking the public option and Democratic plans for reforming health care, according to Politico’s Ben Smith. The email directs customers to its “grassroots Web site” for instructions on contacting legislators, a website ThinkProgress revealed to be run by the secretive corporate lobbying firm Democracy Data and Communications (DDC). DDC, which is operated by a former veteran of the astroturf organization now known as FreedomWorks, has helped various corporate and Republican interests shape legislation by helping to generate seemingly organic phone calls and letters to Congress.
Earlier this week, the Wall Street Journal reported that AHIP — the multimillion dollar lobbying juggernaut for the health insurance industry — has mobilized 50,000 employees to lobby Congress to defeat the public option. ThinkProgress has learned that AHIP’s grassroots lobbying is being managed by the corporate consulting firm Democracy Data & Communications. DDC has made a name for itself as one of the most effective stealth lobbying firms. Earlier this summer, DDC was caught by reporters using a front group called “Citizens for a Safe Alexandria” to attack the Obama administration for seeking to prosecute Guantanamo Bay prisoners in Alexandria, VA.
According to the server-information hub Domaintools.com, the AHIP grassroots outreach website AHIPAdvocacy.org is hosted on a server owned by DDC. Though DDC conceals the hosting of its other websites using a service called DomainsByProxy, ThinkProgress has obtained a list of the domains hosted on DDC servers. A review of this data shows that DDC maintains the grassroots outreach websites for large health insurance companies, but also for big tobacco and Koch Industries:
– phillipmorrisusaactioncenter.org (Altria)
– tobaccoissues.com (Altria)
– kochpac.com (Koch Industries)
– aetnavotes.com (Aetna)
– healthactionnetwork.org (WellPoint)
– humanapartners.com (Humana)
– ahipadvocacy.org (AHIP)
DDC is a firm that promises “high impact” outreach programs to not only influence the grassroots, but “change attitudes for the long term.”
As the Washington Post explains, DDC pays over 500 contract workers to “spend much of their day telephoning people around the country and asking them to sign letters to Congress that press for legislation.” The firm helped orchestrate “grassroots” support for President Bush’s push to privatize Social Security, and helped manage online efforts for the right-wing attack group Freedom’s Watch. DDC is headed by B.R. McConnon, a former associate of Jack Abramoff’s lobbying partners, and a former employee of the Koch-funded astroturf organization known as Citizens for a Sound Economy.
Citizens for a Sound Economy — which has also received funds from private health insurers in the past and played a critical astroturf role in killing reform under Clinton — eventually split, with one wing forming Americans for Prosperity in 2003, and another forming FreedomWorks in 2004. Both organizations, which are still funded by the Koch Industries empire, were instrumental in organizing the anti-Obama tea party protests, and have been spreadingmisinformation and anger at the current health reform effort. Americans for Prosperity’s anti-health reform front group, Patients United, has hosted speakers comparing the House health reform bill to the Holocaust.
Curiously, DDC servers also host anti-health reform letters from the Chamber of Commerce and Rep. Charles Boustany (R-LA), as well as continual news updates about the reform debate. All three documents are under a subsection titled WellPoint.
Given the stealthy nature of astroturf lobbying firms, it is difficult to discern the extent to which DDC is managing AHIP’s efforts. UnitedHealth, another large insurer, was caught recently using a call center to direct people to a radical tea party anti-health reform protest outside of the offices of Rep. Zach Space (D-OH).
Already, the health insurance industry has flexed its muscle to water down reform. After spending millions on lobbying, advertising, and direct contributions to lawmakers, the Senate Finance Committee made a major concession allowing insurers to reimburse only 65% of medical bills (down from the 76% proposed requirement). And indeed, although AHIP has made grandiose promises of self regulation, many insurers have recently broke promises made by AHIP President Karen Ignagni. On June 16, despite Ignagni’s pledges of commitment, insurance executives from UnitedHealth Group, Assurant, and WellPoint specifically refused to “commit” to ending the controversial practice of rescinding coverage after an applicant files a medical claim.
With DDC’s stealth lobbying assistance, AHIP may well kill the public option too.
The insurance industry is facing new heat from House Democrats as Rep. Dennis Kucinich (D-Ohio), chairman of the Oversight and Government Reform subcommittee on Domestic Policy, on Wednesday requested that six top insurance company executives appear before his panel to explain how they do business.
Kucinich in his letter said the Sept. 17 hearing will examine “the nature, cost/benefit, and impact of administrative measures and protocols used by the health insurance industry to determine coverage for doctor-prescribed health care treatments, as well as costs of administrative measures undertaken by doctors to interface with insurance companies.”
The missive went to CEOs of Aetna, WellPoint, Cigna, Humana, Hemingway Health Care and UnitedHealth. It follows a request earlier this month that Energy and Commerce Chairman Henry Waxman (D-Calif.) and Rep. Bart Stupak (D-Mich.), chairman of that panel’s Subcommittee on Oversight and Investigations, sent to 52 insurance companies requesting reams of potentially embarrassing financial information. Waxman and Stupak are seeking details of executive compensation packages, conferences and retreats they sponsored, and the profitability of their products.
Over the past five years, almost 20,000 individual insurance policyholders have had their policies rescinded by the three insurance companies who testified today: Assurant, UnitedHealth Group, and WellPoint.
Executives of three of the nation's largest health insurers told federal lawmakers in Washington on Tuesday that they would continue canceling medical coverage for some sick policyholders, despite withering criticism from Republican and Democratic members of Congress who decried the practice as unfair and abusive.
The hearing on the controversial action known as rescission, which has left thousands of Americans burdened with costly medical bills despite paying insurance premiums, began a day after President Obama outlined his proposals for revamping the nation's healthcare system.
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Blue Cross of California encouraged employees through performance evaluations to cancel the health insurance policies of individuals with expensive illnesses, Rep. Bart Stupak (D-Mich.) charged at the start of a congressional hearing today on the controversial practice known as rescission.
But documents obtained by the House Committee on Energy and Commerce and released today show that the company's employee performance evaluation program did include a review of rescission activity.
The documents show, for instance, that one Blue Cross employee earned a perfect score of "5" for "exceptional performance" on an evaluation that noted the employee's role in dropping thousands of policyholders and avoiding nearly $10 million worth of medical care.
WellPoint's Blue Cross of California subsidiary and two other insurers saved more than $300 million in medical claims by canceling more than 20,000 sick policyholders over a five-year period, the House committee said.
The committee investigation uncovered several rescission practices that one lawmaker called egregious, including targeting every policyholder diagnosed with leukemia, breast cancer and 1,400 other serious illnesses. Such investigations involve scouring the policyholder's original application and years' worth of medical and pharmacy records in search of any discrepancies.
"These practices reveal that when an insurance company receives a claim for an expensive, life-saving treatment, some of them will look for a way -- any way -- to avoid having to pay for it," said Stupak, chairman of the commerce committee's Subcommittee on Oversight and Investigations.
The insurance industry’s offer to agree to guaranteed issue in the individual market is dependent on a mandate to require every uninsured individual to purchase insurance. That would distribute risk broadly even if it doesn’t specify how such coverage could be paid for. Guaranteed issue has been opposed by WellPoint since it is not compatible with its business strategy of selling only to the healthy.
What about guaranteed issue in the small-business market? Since current proposals also would permit the continuation of the employer-sponsored market, insurers such as WellPoint would remain successful only if they could continue to use underwriting and premium flexibility in the small-business market. If they were required to issue coverage to every small business that applied, then they would have to have a mandate for all small businesses to purchase coverage. Though that would distribute risk more evenly in the small-business market, it still would defeat WellPoint’s successful strategy of keeping premiums competitive by selling their products to healthy individuals and only to small businesses with healthy employees.
WellPoint worked very hard to defeat reform efforts in California since it would have destroyed its dominance as the insurer of the healthy. There is every reason to believe that WellPoint likewise will oppose reform on a national level if Congress includes measures that would require private insurers to participate in a regulated social insurance program.
