Friday, August 28, 2009

WellPoint Calls Attention To Its Own Immoral Practices In Effort To Smear Health Reform

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.

In the letter to its customers, WellPoint makes a variety of false charges against health reform. Ironically, the attacks WellPoint makes against the public option are more appropriate criticisms of the way the private insurer does business:

1. THE LETTER STATES: Health reform will “increase the premiums of those with private coverage.”

– WELLPOINT POLICIES: In a recent giddy report about WellPoint’s expected profitability to investors, Barrons reported that WellPoint will be “hiking” premiums to at least “6% to 8% annually.” In 2006, WellPoint’s profits increased 34% as premiums and fees surged.

2. THE LETTER STATES: Health reform will cause “millions of Americans to lose their private coverage” and end up in the public option.

– WELLPOINT POLICIES: In March 2007, the state’s Department of Managed Health Care fined Blue Cross of California and its parent company, WellPoint, $1 million after an investigation revealed that the insurer routinely canceled individual health policies of pregnant women and chronically ill patients. Earlier this summer, despite promises by their lobbyists to the public, WellPoint refused to end the controversial practice of rescinding coverage after an applicant files a medical claim.

While WellPoint has been busy shedding customers and increasing premiums, AMNews reported that WellPoint has cut its medical loss ratio this year — meaning a greater percentage of every premium dollar is going to profits and overhead, rather than being spent on actual medical care. Not only that, while WellPoint has tried to put a “human face” on its company by encouraging their employees to show up at town halls with corporate talking points, WellPoint has cut over 1,500 jobs since the beginning of this year. As former CIGNA executive Wendell Potter has explained, private health insurance companies like WellPoint are an ATM machine for Wall Street.

In a recent interview, NPR’s Steve Inskeep forced WellPoint CEO Angela Braly to concede her company fears that “changes in the insurance market and regulations” could cut into her profits the most. That is because, as Igor Volsky has observed, WellPoint’s business model is “antithetical to regulation,” since the company aggressively pursues healthy customers who are less likely to use benefits to pay for medical care. As the company adds healthy customers, WellPoint has made a science of finding ways to deny coverage to the sick. California regulators uncovered more than 1,200 violations of the law by the company in regard to unfair rescission and claims processing practices.

Braly, who earns nearly $10 million a year, wants “sustainable reform,” yet opposes what her company calls “Obamacare,” refuses to stop rescinding coverage to the sick, and is even suspicious of an individual mandate. Although health insurance lobbyists continue to press their case that they truly want reform “this time,” WellPoint and its stealth lobbying efforts severely undermine that claim.

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