Rockefeller, Harkin Sparring With Insurance Industry

(Sick for Profit)

Senate Democrats are trying to extract some embarrassing information from the insurance industry about their deceptive practices.

First, Tom Harkin, who is seeking to subpoena insurers for failing to provide information requested by his committee.

Harkin, the chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee, said his committee may demand information from health insurance companies about the reasoning for steep increases in premiums faced by small businesses.

"I've been inundated with letters and information about the exorbitant increases in premiums for small businesses in this country," Harkin said during an appearance on MSNBC. "I asked them to come and testify at a hearing I had yesterday. They refused."

"So now I'm asking them to give us information on which we can make some decisions on why these premiums are going up so much for small businesses," he added.

Here's the video:

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Jay Rockefeller also wants some information about the industry's "medical loss ratio," and how they cook the books to pretend that they spend a substantial amount of premium money on treatment and care.

The New York Times reports: "The health insurance industry likes to cite figures showing that 87 cents of every dollar in premiums is spent on medical claims. But a new Senate analysis suggests that for-profit insurance companies are spending much less than that, especially for policies sold to individuals and small businesses. Instead, as little as 66 cents of each dollar paid in premiums goes toward doctor and hospital bills, while the rest covers administrative expenses, marketing and company profits, according to the analysis. .... The [health reform] legislation that may reach the House floor later this week would initially require insurers to spend at least 85 cents of every dollar in premiums on medical claims."

A long-standing complaint from individuals and small businesses is that they get less for their money. "But insurance companies generally do not disclose how much they spend in different segments of the market. The Senate analysis of the figures does not include information from California, because that state's filings are not available through the National Association of Insurance Commissioners. ... The insurance industry's trade group, America's Health Insurance Plans, said Monday that the 87-cent figure it cited as the industry average was based on information collected by the federal government and was an accurate reflection of how much of each dollar in premiums was spent on medical claims." (Abelson, 11/2).

This comes at a time when the Senate is about to unveil their health care bill. This information could be crucial to massing public opinion against the industry and keeping the entire Democratic caucus on board with reform.