Bloomberg News is reporting this morning that House Energy & Commerce Chair Henry Waxman (D-CA) sent letters to six insurance companies demanding information on their small business plans and specifically a response to allegations that the insurers routinely drop small businesses when their premiums increase due to employee illness.
The letters, which were sent to insurers including WellPoint and Aetna (seen here), demanded that the insurers produce relevant documents explaining their small business plans, policies to determine when to raise rates as well as drop coverage, and the maximum rate increase. Congressman Bart Stupak (D-MI), a co-signer on the letter and chair of the committee’s oversight subcommittee, has promised hearings into the alleged purges of small businesses.
“As part of our ongoing investigation, we are now looking into the practice of health insurance companies terminating the coverage of small businesses when their employees become ill and their health insurance claims increase,” said Waxman in a statement. “We need to better understand how widespread this harmful and destructive practice has become, and how it is impacting small businesses and their employees across the country.”
A spokesperson for America’s Health Insurance Plans (AHIP), which represents the major insurance companies, called the letters a “fishing expedition.” “This is just a continuation of a politically timed and politically motivated fishing expedition in an attempt to justify a new government-run plan,” said Robert Zirkelbach, a spokesman for AHIP. “Health plans are already highly regulated at both the federal and the state level, and the overwhelming majority of Americans are satisfied with their current health care coverage.”
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