WASHINGTON -- While Anthem Blue Cross proposed a 39 percent rate increase on thousands of its California customers, its parent company gave 39 of its executives more than $1 million each and spent more than $27 million on 103 lavish executive retreats, congressional investigators said Wednesday.
"One question we asked is where does all of this money go? ... Corporate executives at WellPoint are thriving, while its policyholders are paying the price," Rep. Henry Waxman, D-Calif., said at a House subcommittee hearing Wednesday.
WellPoint's chief executive, Angela Braly, told the House panel that the rate increases were necessary to keep the company solvent.
In response to the company's proposed rate increase, Congress is weighing a plan that would create a federal agency to oversee proposed health insurance rate increases.
Critics say the federal government has no business setting prices in the private sector, while proponents say it's the only way to rein in greedy companies that increasingly are taking advantage of consumers.
The new rate authority board is the brainchild of Sen. Dianne Feinstein, D-Calif., who called Anthem's proposed rate increase "unconscionable."
Her idea won a key endorsement Monday from President Barack Obama, who wants it included in any new health care bill that Congress will consider this year.
Julie Henriksen, a 54-year-old consultant and mother of two from Westchester, Calif., said she was notified that her monthly premium would rise by nearly 30 percent this year, to $1,342. She said that if she tried to increase her consulting rates by a similar amount, "I would not be working."
Waxman said that one of the company's retreats, in Scottsdale, Ariz., cost more than $3 million.
Under Feinstein's bill, the secretary of health and human services could review proposed rate increases in states where the insurance commissioner lacks the authority or capability to do so. Feinstein said that at least 25 states gave their insurance commissioners some type of authority to review or regulate premium increases.
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