Insurers under scrutiny for allegedly purging costly clients

Congressional committees query health plans about high charges for renewals for small businesses with large claims.

By Emily Berry — Posted Sept. 18, 2009

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Six insurers are gathering information for members of Congress who want to know if health plans systematically purge small businesses that turn out to have expensive medical bills.

Rep. Henry Waxman, (D, Calif.), chair of the U.S. House of Representative's Energy and Commerce Committee, and Rep. Bart Stupak, (D, Mich.), chair of the subcommittee on oversight and investigations, contacted the plans on the heels of a similar inquiry from the Senate.

UnitedHealth Group, WellPoint, Aetna, Humana, Wellmark Blue Cross and Blue Shield, and Medica all received letters dated Aug. 31 requesting information about the practice of purging, or intentionally setting very high renewal rates for businesses whose employees were running up expensive medical bills.

All but Medica also were among the nation's 52 largest large health plans the same committee contacted Aug. 17 with requests for detailed information on company profits and executive pay.

The insurers all acknowledged receiving the latest letters and said they were reviewing the request.

"We're weighing how to respond to this more recent letter," Wellmark spokesman Rob Schweers said. "We certainly don't feel like we've got any smoking guns on our end but want to make sure were providing the right kind of information."

Cigna was the first plan to come under scrutiny for alleged purging of small businesses.

In an earlier August letter, Senate Commerce Committee Chair Jay Rockefeller (D, W.Va.) asked Cigna to explain why, if it does not engage in purging, David Cordani, the company's president and chief operating officer, described doing so in a conference call with investment analysts earlier this year.

Cigna has said its underwriting practices always have been in compliance with insurance regulations.

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