The health insurance industry has been rocked by allegations of profiteering and price gouging. In the past month, several major providers including WellPoint and Humana have come under fire for their proposed rate hikes on individual health insurance plans. Now, reports reveal the two companies spent a large chunk of change lobbying the federal government in the fourth quarter 2009 when the health care debate was particularly heated.
The news comes as no surprise to industry veterans. Health insurance companies spend millions yearly to try and influence Congress and the government at large. President Obama’s proposed health care overhaul would wreak havoc on the health insurance system as it is today.
Private insurers like WellPoint who owns Blue Cross Blue Shield in 14 states, would face steeper taxes, higher overhead and a larger pool of members who possess pre-existing conditions and poor health. For health insurance providers, sick people are more of a burden on them. They raise up costs, while medical care spikes up in tandem.
WellPoint alone spent $1.2 million in the fourth quarter of 2008. Humana spent slightly more – $1.3 million. Critics charge that health insurance companies are merely playing for influence and have no legitimate reason to raise premiums on individual health insurance plans other than to profit for it.
Conversely, health insurance providers say the dwindling pool of healthy individuals coupled with the ever rising costs of medical care make it difficult to survive in the current economic environment. Furthermore, a health care overhaul may overload the system. New taxes and mandates are simply not welcomed by the health care industry who would prefer to keep the status quo.
Meanwhile, President Obama is continuing his all-or-nothing approach to get health care reform passed. He is currently pitching for the issue in a multi-state campaign including Ohio and Indiana. The President delayed his trip to Asia in order to push one more time for health insurance reform. The Democrats are close to coming to agreement on a bill. The legislation will need a simple majority vote to pass.