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Anthem’s Inadvertent Case for Government-Sponsored Health-Care Coverage

Renee Despres
Saturday, July 7, 2012 - 16:54

Two recent news stories have propelled the proposed U.S. health-care overhaul back into the mainstream media spotlight. One, a study from Mercer LLC in New York, estimates that the cost of health-care coverage rose by 5.5 percent in 2009, reaching a whopping $8,945 per employee in 2009 (Mercer [http://www.mercer.com/ushealthplansurvey] will be glad to provide you with the report when it’s published in March — for $600. Tables are an extra $1200). Employees are expected to shoulder about half of that price tab in 2010.

Second, Anthem Blue Cross of California, a division of WellPoint, announced that it’s ready to take the lead in that increase in health-care coverage costs. The company received a scolding from Department of Health and Human Services Secretary Kathleen Sebelius after it announced a whopping increase in the prices of its policies next month — as much as 39 percent on individual policies. The rate hike, Secretary Sebelius pointed out, is more than 15 times the rate of inflation. Nor is WellPoint suffering. The company posted a $2.7 billion profit in the last quarter of 2009. She admonished the company that the premium increase will make health insurance coverage unaffordable for “hundreds of thousands of Californians, many of whom are already struggling to make ends meet in a difficult economy.”

Back in July 2009 when the “public option” (i.e. the creation of a government-sponsored health-care plan) was still on the table, Wellpoint spearheaded a campaign against it. In an email to about 100,000 stakeholders, Wellpoint execs suggested “that President Obama’s idea of adding government competition into the health-care mix is ill-advised” (hat-tip to Ceci Connelly at The Washington Post: http://voices.washingtonpost.com/health-care-reform/2009/07/wellpoint_la...).

And now, in a marvelously circular argument, WellPoint executives are defending their rate hike as follows: Economic woes have lead many of the healthier people in their insurance pool to cancel their policies and take their chances, leaving only the sickest people in the pool — hence, the cost per person has increased.

I can’t think of a better option for a government-sponsored health-care plan. Can you?