WellPoint behaving badly
Health insurance company targeted policyholders who were diagnosed with breast cancer, federal investigators say.
First, the company announced it will raise insurance premiums by as much as 39% -- giving President Barack Obama some solid ammunition in advocating for changes to the healthcare system.
Now, news has emerged that Wellpoint targets policyholders recently diagnosed with breast cancer and looks for some way to drop their accounts. Reuters broke the story Thursday, citing information from federal investigators.
WellPoint had a computer algorithm set up to specifically find women diagnosed with breast cancer, Reuters reports. Any woman who triggered the alarm was then put through an intense fraud investigation as WellPoint searched for a reason to drop her policy.
In one woman's case, WellPoint canceling her health insurance forced to delay cancer surgery for five months, Reuters reports. The tumor in her breast more than tripled in size during that time. Post continues after video:
WellPoint admitted that it does investigate policyholders after a breast cancer diagnosis. But the company said it only cancels a policy if it finds something wrong. "It says the practice is necessary to keep down costs for other policyholders," Reuters reports.
"It is important for these companies' profit margins that they get rid of policyholders with expensive diseases," one Georgetown University research professor told Reuters. "If one company were to stop, it would no longer be competitive with the others. They argue they have to do this to stay in the game."
A Congressional committee found that WellPoint made at least $128 million in profit over five years by improperly canceling policies, Reuters reports.
Shocking, isn't it? But it's unclear whether the current health care reform bill in Congress will stop this behavior. Wellpoint lobbyists have reportedly been working hard to remove items from the bill, such as a proposed agency that would monitor these practices.
WellPoint shares are down just slightly Thursday after the news hit. Investors aren't punishing the stock because WellPoint is doing just what they want: making money and preserving the bottom line.
"It's shameful that Wellpoint lobbyists were successful in keeping key protections for those with breast cancer, AIDS and other serious illnesses out of the Senate bill," writes Jane Hamsher on The Huffington Post. "But it's even more shameful that Harry Reid has no intention of keeping his promise to fix the health care bill any time soon -- and that members of the Senate with serious conflicts of interest will profit handsomely as a result."
WellPoint pays for executive security
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The company, headed for an IPO later this year, is worth as much as 10 Tesla Motors combined, says Bernstein's Carlos Kirjner.
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