Democrats turn up heat on health insurance on eve of Obama summit

WASHINGTON — While Anthem Blue Cross proposed a 39 percent rate increase on thousands of California customers, its parent company gave 39 executives more than $1 million each and spent more than $27 million on 103 lavish executive retreats, congressional investigators said Wednesday.

In response, WellPoint Chief Executive Angela Braly told a House subcommittee that Anthem Blue Cross' rate increases were necessary to keep the company solvent.

The hearing was part of a daylong, multipronged attack by Democrats against the health-insurance industry, on the eve of President Obama's bipartisan health-care summit.

Elsewhere, the full House voted overwhelmingly to repeal the industry's 65-year-old exemption from federal antitrust oversight, and Health and Human Services Secretary Kathleen Sebelius asked the heads of five major insurance companies to meet with her to justify their pricing policies.

All three moves were more symbolic than substantive, but they underscored how Democrats view attacks on the widely disliked industry as one way to revive support for their health-care drive, both with the public and among lawmakers who have failed to rally behind a bill that Congress could send Obama. Democrats also hope Thursday's summit will jump-start the debate.

At the House hearing, Democrats displayed photos of lavish resorts used by WellPoint for getaways and grilled Braly about executive pay, including her $1.1 million salary and stock compensation valued at $8.5 million last year.

She said the rate increases were needed to keep up with medical inflation.

"Raising our premiums was not something we wanted to do," Braly said. "But we believe this was the most prudent choice given the rising cost of care and the problems caused by many younger and healthier policyholders dropping or reducing their coverage during tough economic times."

Rep. Henry Waxman, D-Calif., chairman of the House Energy and Commerce Committee, charged that the real story wasn't one of higher costs. "The thousands of pages of WellPoint documents we have reviewed tell another story," he said. "They tell a story not about costs, but about profits."

Republicans said little to defend Anthem, and the panel's top Republican, Texas Rep. Michael Burgess, asked why WellPoint asked for such a big increase.

"You had to know this was going to be trouble," he told Braly. "A 39 percent rate increase? In this climate?"

The full House turned up the heat even higher, voting 406-19 to move legislation that would put insurers under federal antitrust jurisdiction by amending a 1945 law that gave states, not the federal government, authority to regulate competition issues in the industry.

Independent experts largely agree that the change would have minimal effect, in part because of the regulatory role states already play. The Congressional Budget Office has said removing the exemption would have "no significant effects" on premium prices or the federal budget, the powerful lobby America's Health Insurance Plans did not make defeating the bill a priority, and the legislation faces dim prospects in the Senate.

Rep. Lamar Smith, R-Texas, said it had "all the substance of a soup made by boiling the shadow of a chicken."

Democrats, however, argued that the repeal would help consumers by increasing competition. And all but 19 Republicans supported it, unwilling to be seen as voting for the health-insurance industry.

Next stop in the health-care wars: Blair House, across the street from the White House, where Obama and more than three dozen Democratic and Republican lawmakers will square off in a six-hour summit beginning at 7 a.m. PST Thursday.

While containing undeniable elements of political theater, the summit could carry major implications for both health care and November's midterm elections.

Few see much possibility that the summit will break the partisan health-care impasse and produce a consensus for a bill. But that only raises the stakes.

A compelling performance by Obama before a national TV audience could rally public opinion and lock down the votes of some liberal and conservative Democrats who have wavered on the Senate-passed version of health care. A weak performance, on the other hand, or a public display of partisan bickering or sloganeering by congressional Democrats could send prospects for health care and the party's political fortunes plunging.

Republicans have little political incentive to cooperate.

A new poll by Republican pollster Bill McIntuff suggested that opposing the plan could pay dividends for the GOP in the November elections. Opposition is particularly pronounced among independents, tea-party supporters and those keenly interested in the midterms, according to the survey.

Democrats believe they need to turn that around and that health care unavoidably is bound up with their prospects in November.

"If [a health-care bill] doesn't pass, the message to the American people is that Democrats can't get anything done, can't govern and can't deliver on promises to the American public," Democratic strategist Mark Mellman said. "And that's a bad platform on which to be running for re-election."

No matter how the summit plays out, daylong attention on health care isn't what the White House had wanted at this stage. They would rather talk about jobs. So the meeting itself is, in some sense, a Republican victory.

"They're putting the wrong item on the menu," Republican strategist Rob Stutzman said. "The country has an appetite for red meat and potatoes, and they're still serving baked fish."

Compiled from McClatchy Newspapers, The Associated Press, Los Angeles Times and Tribune Washington bureau