we welcome wellpoint's support for health care reform. in a very real way the past of legislation that we passed last year is a major part of the problem we are discussing today. it is time for a republican colleagues to stop blocking what we and other committees pass after long hearings and markups in which everyone was involved. anyone who goes to the white house tomorrow without a determination to insure everyone to provide equitable health care to everyone including those living in the territories and reduce health-care costs should get out of the way and let others who will do what has to be done sit in their share. if there is anything wellpoint and those of us on this side of the aisle can agree on is that we might not be here having this hearing today if the president had signed the kind of legislation this house passed last year. i want to welcome those who are here to testify this morning, the customers of wellpoint and the officials from wellpoint. >> thank you. >> thanks for holding this hearing. i would like to be able to say

>> i wish i was an executive at wellpoint.er] >> it seems unconscionable the company with a spending record that would reach deeper into the pockets of the policyholders at a time when so many americans are struggling to stay afloat it also seems to me any company that can afford to send hundreds of employees to these lavish retreats of the world can afford to maintain reasonable and affordable premium rates for its customers. and does what bothers me on the individual market. we don't see that regulation a oversight on the state level and that is why media on the national level and i know president obama early this week announced that. there are parts of his bill that i have problems with or his suggestion. but one of the things i like this if we are going to sell insurance across state lines to individuals with a baby in houston, texas or san diego or anywhere else, i would like to see that there is oversight on what they're doing with that money to justify the premium increases. thank you, mr. chairman. >> thank you, mr. gr

at wellpoint. on october 24, 2009, mr. chin, senior wellpoint actuary e-mailed mr. saucy, the head of wellpoint individual market division and let me put up that e-mail. mr. shane writes that wellpoint executive must reach agreement on a funding strategy quickly, specifically in the area of do we file with a cushion all out for negotiations or do we file at a lower level that does not allow for negotiations. this e-mail says that you are considering filing a rate increase that was padded because you expected california to reduce your proposed increase. is that an accurate conclusion to reach? >> i don't believe so. cindy described these e-mails earlier in the process, there was a question of what medical trends would be. what we filed did have a margin of 2.4 present on operating margin base of 1.4%. and it reflected the trend that we're experiencing in california. so it was not, there was not a cushion in the rate. >> it's hard to understand these words differently, because the words say a cushion

shane, senior wellpoint ack you area, e mailed the head of wellpoint's individual market division and let me put that up. wellpoint executive must reach agreement on a filing strategy quickly, specifically in the area of do we file with a cushion aloug for negotiations or file at a lower level that does not allow for negotiations. this email says that you were considering filing a rate increase that was padded because you expected california to reduce your proposed increase. is that an accurate conclusion to reach? >> i don't believe so. cindy described these emails earlier in the process. there was a question of what the medical trend would be. what we filed did have a margin of 2.4% or 1.4%. and it reflected the trend that we were experiencing in california. so it was not a cushion in the rate that was filed. >> it's hard to understand these words differently, because the words say, a cushion allowed for negotiation. you decided you needed 25%, but it sounds like you were willing to go to 20%. there was a presentation prepared for your board of directors. the presentation outlined w

wellpoint's chief executive angela braly defended her company's actions. she said insurers are not the source of the problem. >> the rise in health care costs and healthy people opting out of the system when other issues arise, such as the tough economic times we are experiencing today. these factors led to the rate increases you have seen from our company and others in california. >> reporter: later, health and human services secretary kathleen sebelius announced she's calling in leaders of five major health insurance firms to explain their rising premiums. >> sreenivasan: the full house voted today to repeal the health insurance industry's exemption from federal anti-trust laws. the move may have little practical effect, since states already regulate the companies. former vice president dick cheney was released from a washington hospital today. he suffered a mild heart attack earlier this week. but a spokesman said today mr. cheney is "feeling good", and plans to resume his normal schedule soon. the former vice president is 69 years old. he has had five

the health insurance company wellpoint was in the hot seat over its recent decision to hike premiums for some policy holders by a lot. our story tonight from nbc's lisa myers. >> reporter: three californians, all relatively healthy, recently were notified their health insurance premiums are going up as much as 39% this year. >> there's reasonable and then there's outrageous. >> reporter: for jeremy arnold it's the second huge increase. >> my premiums are poised to rise to a level a whopping 74% higher than barely over a year ago. >> reporter: today congress demanded an explanation from the insurance giant wellpoint, whose subsidiary levied the big increase on hundreds of thousands of individual policy holders in california, and is reported to have proposed double-digit rate hikes in 11 states. >> a 39% rate increase at a time when people, americans, are losing their jobs is so incredibly audacious. >> reporter: wellpoint's ceo angela brailey. >> we are fighting every day to make sure we can make their health benefits more affordable. >> reporter: she blamed the increases on soaring m

even wellpoint which would have been virtually immune to obama care took a 19% header. but as time went on, the proposals in congress became more and more muted diluted. the senate's $871 billion health care reform bill passed without a public option was much more centrist than the package that the house had passed a month earlier. even if there could have been a compromise as investors realized that the earnings of the hmos weren't as endangered by congress as they had first feared when the president took aim at them. look at this. unh rallied 42%. humana up 40%. wellpoint up 46% from their october lows and this is what we're looking for from now on. unless you think these stocked rally because health care reform seems to be dead on arrival, and do not resuscitate, we saw the same darn pattern with the credit card industry from there to bull. with the credit card act which aims to limit interest rate increases and penalties because of late payments while forcing credit card companies to clarify terms and conditions to their customers. take a look at capital one, cof. w

and most recently, which has gotten a lot of attention is the wellpoint anthem request for a 39% ratee, which would affect 800,000 of their individual market customers. not to get just an example of what that means if you're dealing with this as an insurance customer, we have a letter from a mother in california whose premiums have been raised 38% recently. and that translates to her family, $7000 more a year for the same benefit package that she had last year. and one of her sons has type i diabetes, so she really has almost no choices in the marketplace with a child with pre-existing condition. it's impossible for her to find other coverage, so she can either pay this $7000 x. or drop coverage altogether. we are seeing this at the same time where not only is there an economic downturn around the country, but we know that insurance companies are not suffering that same kind of downturn. the five largest insurers in america have declared more than $12 billion with profits in 2009. wellpoint alone posted $2.7 billion profit in the fourth quarter of 2009, just a week before they filed f

at a hearing on the house side today, congressman waxman disclosed wellpoint had in 200839 executivesrs or more. in 2007, a '08, $27 million was spent on corporate retreats. do you think that congress or part of your legislation should start looking at some of the ways that his money is spent? and the connections between the increases? >> yes. i think so. in my view, the premium dollar that is spent on health care should be 90%. instead it is 20%, 30% in some companies. they have very fancy headquarters. they pay very big salaries. they have, as you said, expensive retreats. and they are bottom line money makers rather than real health care providers. that's a major concern. you know, 85% of the people of this country had some private health insurance. well, because of spiraling costs, that's dropped by 2.9 million people. additionally 688,000, people who are dropped essentially either are poor or elderly, they immediately go on medicare or medicaid. so it makes no sense to have this kind of -- profit-seeking and profit-making medical insurance industry in america. if you want health

one major insurance company, wellpoint, is raising premiums 39% for policyholders in california.hink about that. 39% is hard to hear for a lot of people out there. that's why many health executives continue to get pay raises. to be clear there's no proof the rate hikes has anything to do with the executive compensation, but it's also clear insurance rates are rising. so are medical bills. the price tag for a single hospital admission can make your head spin. keeping them honest, i want to show you how eye-popping bills break down. this is the hospital where i work where i'm a neurosurgeon. having an operate performed in a room like this costs $3,000 an hour. that's for starters. if you look at a hospital bill you might see an i.v. bag charge. it's an i.v. like this, about $280 just for the i.v. bag. that might strike people as very high. stapler. this is a stapler often used in surgery. something like this costs $1,200. like everything else i'm going to show you, it's used once then thrown away. keep in mind, all these prices are what you, the patient, are getting billed for. it'

. >> brian, the president of consumer business for wellpoint the parent company of anthem said the rate increase represents approximately 10% of our more than 8 million members in california. adding that rates are rising because healthy people are choosing not to buy coverage during the recession leaving a sicker and older pool of customers. and robert, the spokesman pore america's health insurance plans said profit margins for health insurance are slimmer than in other areas of health care. >> the profits in the health insurance industry are much less than other industries within the health care sector. and have been historically low compared to many other industries. the average profit margin that, when you look at yahoo! does their latest quarterly rangings showing that the average profit margin in the entire health care sector right now is 11%. but the health insurance industry is at 3.4%. >> reporter: anthem's decision to postpone the increase will give investigators two months to see whether the company is in compliance with federal and state regulation. meanwhile, one of the nati

under the parent of wellpoint. i asked for an explanation of these rate increases.n response, the company has suggested they will delay the increases for two months, responding to the california insurance commissioner, our request, and members of congress. i think these kinds of rate increase give a highlight to why the president said a year ago, "we need to address health reform as part of addressing the economy." we will not fix the economy without fixing our health-care system. it is why he has invited, a week from today, leadership from the democrats and republicans in the house and senate to sit down, roll up their sleeves, and talk about a comprehensive health reform plan moving forward. it is why he is urging congress to continue on the job they started until they finish this project for the american people. the plans that are pending in congress would give some additional authority to this agency, providing oversight on insurance companies across the country, making transparent the kind of rate increases that are filed on a routine basis but often hard to de

. >> reporter: anthem blue cross' parent company, wellpoint, made almost $3 billion in profits last quarter alone. jake tapper, abc news, the white house. >>> it is not getting better for toyota and its recalls. a total of 8.5 million toyotas are being recalled around the world, for now a variety of reasons. some of toyota's best-selling models are now involved and the company is doing major damage control. here's diana alvear. >> reporter: his presence was meant to send a message, that akio toyoda has taken control of his company's safety crisis. a crisis that now features a new recall. >> let me assure everyone that we will redouble our commitment to quality, the lifeline of our company. with myself taking the lead. >> reporter: this latest recall targets toyota hybrids after reports of mall-functioning brakes. they include the 2010 prius and the lexus hs 250h. >> i guess they found some sort of glitch in the programming. so this is a reprogram of the abs unit. >> reporter: dealers have been busy for days repairing toyotas recalled last week because of run-away acceleration. there's addin

wellpoint posted a $2.7 billion profit in the third quarter of 2009 a week before they filed for a 39% rate increase. last week, i sent a letter to the ceo of anthem which is a blue cross company and ask for explanation of these rate increases and in part in response, the company has suggested they will delay the increases for two months, responding to our requests and to discuss this situation with members of congress. i think these kind of rate increases gives a highlight to why the president said a year ago we need to address health reform, comprehensive health reform as part of addressing the economy. we will not fix the economy without fixing our health-care system. it is what he has invited a week from today leadership from the democrats and republicans from the house and senate to sit down and roll up their sleeves and talk about a comprehensive health reform plan moving forward and why he is urging congress to continue on the job they started until they finish this project for the american people. the plans that are pending in congress would give some additional authority to th

this at a time when anthem passed $4.2 billion to the parent company wellpoint in profits alone. beyond my comprehension how any member of the people's house can continue to defend this behavior. it's time to demand an answer to a question asked many years ago by pete ciger, whose side are you on? -- seeger, whose side are you on? you are either with the american people or with the insurance lobby. you either stand up for those who simply want affordable health insurance or lay down with the corporate titans who continue to care less about the american people. whose side are you on? the speaker pro tempore: the gentlelady's time has expired. for what purpose does the gentlelady from -- the gentleman from indiana rise? >> i ask unanimous consent to address the house for one minute, revise and extend my remarks. the speaker pro tempore: without objection, the gentleman is recognized. mr. pence: thank you. well, tomorrow the white house will convene a so-called summit on health care reform. it's supposedly an effort to find bipartisan agreement and consensus on reform. frankly, if t