Insurers Defend Practices At House Hearing

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Insurance company executives, testifying before a House subcommittee Thursday, defended their operating practices and said increasing health care costs are pushing insurance prices higher.

"Insurance company executives on Thursday assured a skeptical congressional subcommittee chaired by Cleveland Democratic Rep. Dennis Kucinich that their coverage decisions are motivated by patient care, not profits," The Plain Dealer reports. "One after another, representatives of Aetna, United Healthcare, WellPoint Inc., Humana, CIGNA, and Health Care Service Corp. denied their companies cut costs by routinely rejecting claims, or that they rescind insurance coverage for patients and employers who incur major medical expenses."

On Wednesday, the Domestic Policy Subcommittee heard testimony from former insurance company employees and families of patients who accused insurers of increasing profits by rescinding coverage to people with high medical bills. On Thursday, Aetna Inc. Senior Vice President Patricia Farrell told the subcommittee, "Health care costs drive insurance premiums, not the other way around. … Over the last decade, health care costs have risen about 7.7 percent a year on average, and insurance premiums have risen that very same amount" (Eaton, 9/18).

CBS News: "The six executives insisted they support reform, to a point. 'We believe if those reforms are enacted, then a government-run plan is not necessary,' said one executive. 'We would not have a level playing field since insurers are subject to taxes and other types of expenses,' said another. Even more notable than what the insurance companies said was the fact that they said it at all. Normally, they like to stay out of the spotlight and let their national lobby defend their practices" (Cordes, 9/17).

Meanwhile, "The South Carolina Supreme Court this week upheld a multimillion verdict against an insurer the justices said revoked a man's health policy after he tested positive for HIV based solely on a nurse writing down the wrong year for the test," The Associated Press/Insurance Journal reports. "The court in this conservative, often pro-business state called Fortis Insurance Co.'s actions 'highly reprehensible,' but did reduce punitive damages awarded to Jerome Mitchell Jr. from $15 million to $10 million" (Collins, 9/16).

The Lousiville, Kentucky Courier-Journal/Gannett News: "WellPoint, Eli Lilly and Indiana's many medical device makers would have to pay annual fees to the government to help pay for expanding health care coverage across the nation under a Senate health overhaul proposal released Wednesday. The bill would impose $13 billion in annual fees on drug makers, medical device manufacturers, clinical labs and health insurance providers. Fees would be assessed based on the companies' market share. … But the insurance and medical device industries are pushing back" (Groppe, 9/17).

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.

© Henry J. Kaiser Family Foundation. All rights reserved.

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