Washington A top House Democrat is investigating whether the nation’s largest health insurers have deliberately canceled coverage for small businesses after their employees became sick and sought expensive treatment.
Rep. Henry Waxman, D-Calif., sent letters Monday to six insurers requesting details about their plans for small businesses and how coverage decisions are made.
The trade group representing the companies said the action amounted to a smear campaign designed to bolster support of a public health insurance option.
Waxman is investigating an industry practice called “purging,” in which insurers drop coverage for sick individuals once they become too expensive to insure. According to a statement from Waxman, health insurers will terminate coverage to small businesses by canceling their policies or raising premiums until they are unaffordable.
“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,” said Waxman, who chairs the House Energy and Commerce Committee. The letters also were signed by Rep. Bart Stupak, D-Mich., who chairs the subcommittee on oversight and investigations.
Aetna Inc., UnitedHealth Group Inc., WellPoint Inc., Humana Inc., Medica and Wellmark Blue Cross Blue Shield received the letters.
America’s Health Insurance Plans, which represents the companies, said Waxman’s investigation was designed to smear private insurers and bolster support for a public insurance option.
“This is just a continuation of a politically timed and politically motivated fishing expedition in an attempt to justify a new government-run insurance plan,” said the group’s spokesman, Robert Zirkelbach. “The overwhelming majority of Americans are satisfied with their current health care coverage.”
Many House Democrats say a public insurance plan, which would compete with private insurers, must be a part of health care reform. Republicans overwhelmingly oppose the idea.
President Barack Obama said he prefers a public option, but recent remarks by administration officials suggest he might back away from that preference.