WAR!

Friday, July 29, 2011
It was war. Ugly. Bloody. And there was plenty of collateral damage. Angela F. Braley, Chair, President, and CEO of Anthem/WellPoint, dug in her heels. She was, after all, the leader of the largest health insurance company in the country. Thirty-four million Americans counted on HER company. Last year’s revenues were $57.8 billion dollars. Yes billion, with a B. And yet, she was fighting a board room coup.

Ken Goulet, Executive Vice President and CEO of the Commercial Business Division, had his own ideas of how the company should be run. His area accounted for twenty-seven million Americans, 80% of the WellPoint’s medical insureds. He and the Executive Vice President and Chief Financial Officer, Wayne DeVeydt, saw a need for an immediate rate increase to protect long-term financial security. They wanted more money in the company coffers, and they wanted that now. Ms. Braley disagreed.

The disagreement erupted at the Board meeting. Angry words were exchanged. Ms. Braley demanded spending cuts and changes in benefits. Goulet and DeVeydt tried to force across the board premium increases. Claims were suspended as the company attempted to sort out its finances and determine a prudent path to take. Insured’s were advised that their policies would be reactivated once a decision was reached, passed by the Board, and signed by the CEO. Until then, the best one could hope for was good health, a quick resolution, and a reasonable rate increase once the bill arrived.

The above is, of course, total fiction. Those are the names and titles of WellPoint’s leaders. The revenue and membership numbers are accurate, too. But the idea that an insurance company would hold up benefits while sorting out an internal conflict is just me being silly. Real businesses are too responsible to behave that way. No, the only place people’s lives are put in jeopardy like this is with the government.

Today is July 29, 2011. The Republicans just passed John Boehner’s bill. The Speaker of the House, the leader of the Republican majority, needed over 24 hours to get an almost meaningless piece of legislation approved by his own troops. In the end, the only thing he accomplished was the final destruction of his own reputation and position. This bill is Dead On Arrival at the Senate. Boehner knows that. His Republican members know that. And the Senate is incredibly clear about the bill’s status. There was only one reason to pass this legislation – political theater. If Boehner could have passed the bill with little effort, with all of the Republicans and a smattering of Blue Dog Democrats, he would have been in position to consolidate power and force a deal more to his members’ liking. Now? Who knows?

I don’t think we are going to default. I certainly hope we don’t. I keep thinking that the adults are going to step in at the last moment and resolve this. At the very least, I keep thinking that this will be kicked down the curb till next March.

Until this is resolved, seniors dependent on Medicare and countless others wait and wonder. Will they be paid next week? Will they be insured next week? Will the government shut down? We have states that have or are close to shut down. Why not Washington? With so many people campaigning against the federal government, what would happen if enough people got elected who wanted to dismantle the great social safety net?

And thus we return to my question – is your health care too important to be entrusted to politicians? This isn’t an unqualified endorsement of insurance companies, just a simple question. John Boehner? Harry Reid? Nancy Pelosi? John McCain? Which of these people would you like to have managing the nation’s health care industry? Which do you want in charge the next time you need a kidney?

Let me be clear, the insurance industry is only as good as the regulations that control it. Ask my friend John about his claims from Hurricane Katrina. Health insurance claims are far less aggravating then car or home insurance claims, but rules and regs play a large part in that. Financial stability comes, in part, from the laws the companies are forced to abide.

So, on Friday the 29th, the idea of Anthem not paying my clients claims is ridiculous. The idea that my friends and neighbors are being threatened by a government default that may or may not cover their claims isn’t ridiculous. It is shameful.

DAVE

www.bcandb.com