Sebelius Blasts Insurance Rates, But Insurers Fire Right Back

Rejecting the claims of medical costs, however, Sebelius said, "While rising healthcare costs is a known problem with our broken healthcare system, some of the premium increases requested by insurance companies are five to 10 times larger than the growth rate in national health expenditures. All the while, insurance companies and their CEOs continue to thrive."

While in a recession last year, the nation's five largest insurance companies?WellPoint, UnitedHealth Group, CIGNA, Aetna, and Humana?took home profits of $12.2 bilion, up 56% over 2008. The CEOs of the five largest insurers were each compensated up to $24 million in 2008, Sebelius said.

With proposed healthcare reform, "insurance companies will have to report how they spend the premium dollars that they collect from their customers," Sebelius said.

Sebelius also cited insurers in seven states that are proposing premium rates hikes. Besides the California and Michigan proposed hikes, she cited proposed increases by Anthem of Maine (23%;); Regency Blue Cross Blue Shield of Oregon (20%); and UnitedHealth, Tufts, and Blue Cross (16 to 23%) in Rhode Island. She said individual rates increased in Washington state by 40% until it imposed stiffer premium regulations.

The proposed Michigan rate hike of 56% was the highest that Sebelius cited. The figure was accurate as a proposal, but never carried out, according to Michigan Blue Cross Blue Shield.

"We are the insurer of last resort and seeing an influx into the individual market." says Andrew Hetzel, vice president for corporate communications for Blue Cross Blue Shield of Michigan. "Everything about our business is what Congress is talking about what it should be. Unfortunately, our plan is lumped into this political discussion and it's not helping the debate. It's emotional and angry and it doesn't lend itself to careful consideration and analysis of the real problems."