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the San Francisco Chronicle

Justify High Rates, Health Secretary Tells Health Insurance Execs

Diana Carlton

Health Insurance industry officials (L-R) Wellpoint CEO Angela Braly, United Health Group's CEO Stephen Hemsley and National Association of Insurance Commissioner Terri Vaughan are pictured during a meeting between Secretary of Health and Human Services Kathleen Sebelius and major insurance company executives in the Roosevelt Room of the White House in Washington, March 4, 2010. (REUTERS/Jason Reed)

WASHINGTON - Health and Human Services Secretary Kathleen Sebelius told insurance executives Thursday that their companies should be more transparent when they seek higher premiums amid what she called "jaw-dropping rate increases" from California to the East Coast.

"The top five largest for-profit insurance companies filed earnings of $12.2 billion last year while dropping coverage for 2.7 million Americans," Sebelius said. "It just doesn't make a lot of sense to people across America frightened that they're being priced out of the market."

The CEOs of UnitedHealth Group Inc., WellPoint Inc., Aetna Inc., Health Care Service Corp. and Cigna Corp. attended the meeting with Sebelius at the White House, along with officials from the National Association of Insurance Commissioners.

Sebelius later said the meeting "focused on what is happening with the kind of jaw-dropping rate increases that people are seeing."

President Obama dropped into the meeting briefly to hand the insurance executives a letter from Natoma Canfield, a cancer survivor of Medina, Ohio, whose health premium increased over 40 percent this year, according to Sebelius.


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With comprehensive health care legislation struggling on Capitol Hill, the White House is trying to focus public attention on the record-setting insurance premium increases being announced from Connecticut to California.

Sebelius said she asked the companies to file their rate requests online, along with actuarial data that supports those requests, to give transparency and justification for raising the rates.

"Put it on a Web site, tell us what your loss trends are," she said. "Tell us what you're paying out. Tell us what you're spending in overhead and CEO salaries and advertising."

WellPoint executives have blamed their rate increases in California, which average about 39 percent for individuals, on rising medical costs and a pool of customers that is gradually becoming older and sicker as younger, healthier people drop their coverage.


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