The story idea seemed reasonable—a follow-up to the news that Anthem Blue Cross planned to raise rates on individual policies in California by as much as 35 percent. The first Anthem story last week was one of those Oh My God news events that got everyone, even the White House, gasping with outrage. So Tuesday The New York Times weighed in with a piece called “In California, Exhibit A In Debate on Insurance.” Perhaps it was meant to be an explainer about those rate increases from gigantic insurance companies. But, alas, the story confused more than it explained. Was it just bad editing? Or was it that the paper just couldn’t decide what story it wanted to tell?
The lead was predictable enough. We learn that one Bernhard Punzet, a thirty-four-year-old in Los Angeles just got a 34 percent rate increase, raising his monthly premium to $254. That seemed low by New York standards, so I read on, trying to find out what kind of policy Punzet had purchased. Was it one of those cheapie, limited coverage Tonik policies that Anthem likes to sell to young adults? That would explain the low premium. The Times didn’t say, though, instead offering a quote from Punzet. “Ten percent I could have rationalized…I’ve never seen anything go up to 34 percent.”
Next came some graphs about the rate increases and the “seething fury felt by Mr. Punzet and nearly 700,000 other Anthem customers in California who have received notices of increases that average 25 percent.” Then the paper said that l’affaire Anthem “reinforced an emerging shift of focus in Washington from the need for universal coverage to the need for serious cost control,” and reported what it called “a deep rift” between the administration and the insurers about whether such “unsustainable pricing is driven by the “bloodless economics of risk or a corporate culture of greed.” Vivid language from the Grey Lady—but was the story going to discuss cost control and tell readers that doctors and hospitals are also responsible for rate increases, a point overlooked by the media and most everyone else?
Nope. Aside from quoting from an Anthem statement about having to manage the rising costs of hospitals, doctors, and drugs, the paper didn’t mention the role that doctors and hospitals play in the pricing mess. It did talk about HHS Secretary Kathleen Sebelius’s public whipping of Anthem. Sebelius had said she was “very disturbed” to learn that rates were rising, in view of the carrier’s fourth quarter earnings of $2.7 billion. But, as the Times noted, Sebelius didn’t say that the surge in earnings came from the one-time sale of a business unit. Now that was important, and should have been in every news story written last week. You know—that fairness and context thing. I wish the Times had explained this more.
A few graphs later came a quote from an anonymous study released this week, showing that “the five largest health insurance companies collectively lost 2.7 million customers last year, including 1.4 million by WellPoint. Yet they reported record profits of $12.2 billion.” But the Times didn’t tell readers that the study came from HCAN—Health Care for America Now, an advocacy group that supports many of the reform ideas incorporated into the health bills.
According to HCAN, WellPoint indeed lost nearly 1.4 million customers. But not all of them were in the individual market—which was the subject of this story, or so I thought. The total included those with employer-sponsored insurance, individual policies, and some 350,000 government-sponsored plans, like Medicare. An apples and oranges problem here that needed clarification. The connection between losing members and the five companies’ record profits could have been better clarified, too.
The story veered back to the individual market with more quotes, including one from Joshua Needle of Santa Monica, who has some ailments that make it hard for him to shop for a cheaper policy. The Times noted that “once accepted by an insurer, consumers cannot be dropped for medical reasons.” True enough; the Health Insurance Portability and Accountability Act (HIPAA) already forbids companies from dropping coverage for people who are seriously ill. But then included in a list of ways the Democrats would attack the cost of premiums came the idea that “insurers would be prohibited from denying or canceling coverage because of medical conditions.” Wait—didn’t the article just say that policies couldn’t be canceled for medical conditions?
Finally came a vague conclusion from “several insurance analysts” (left unnamed by the Times), who said it was possible “but not necessarily likely” that such increases would become common while the economic downturn persisted. Who were these analysts? It seemed like reporters talked to insurance brokers or agents, hardly the most authoritative sources in my book. The paper quoted one and indicated that brokers in Los Angeles had “never seen jumps of such magnitude.” Why not talk to state regulators, who are always in the know? That would be the first place I’d send a young reporter to get some facts about rate increases. The Times did talk to California’s insurance commissioner, but it would have been good to hear from those in other states where there have also been large rate increases.
We have a suggestion for redemption. Times reporters might want to keep up with the continuing rate increases in their own backyard from the likes of Empire Blue Cross. Are New Yorkers less outraged than Californians at the humongous increases they’ve seen in both the individual and employer markets? One of my students brought to class a notice his employer got from Oxford, telling of a 22 percent increase. A twenty-four-year old I know who is in good health got socked with an 11 percent increase from Empire; she now pays $764 a month for a policy without prescription coverage—and one, she found, was not accepted by many New York City doctors when she sought a doctor for a routine GYN exam.
Everything in health insurance is relative, which underscores the point that there’s no such thing as equity in the U.S. insurance system—as the Anthem story shows.