Congressional Commitee Sets Out To Harass Insurance Industry With Probing Letter Drive

WASHINGTON Many of the nation's largest insurance firms will have to decide if they are going to honor a request from House Democrats for thorough financial records, as a part of an investigation into the compensation of executives and as regards other business practices in an industry that is said to oppose the President's health care proposals.

Tuesday night, Democratic Representative Bart Stupak of Michigan’s spokesman said that 52 letters had already been sent to health insurers which had $2 billion or more in annual premiums. It seems, according to him that some other industry groups, which have been airing television advertising that supports Obama's call for legislation, did not receive letters.

Included in this request to insurance companies were records relating to compensation of highly paid employees, those relating to the premium income of companies', payment of claims, and information regarding expenses that stem from any event during the past 2 1/2 years, held outside company facilities.

Rep. Henry Waxman, D-Calif signed the requests. It was he who last month as chairman, had guided some of the healthcare legislation through the House Energy and Commerce Committee. together with Stupak, who heads a panel subcommittee.

The Associated Press, which obtained a copy of the letter, released the news that the letter said that the committee was examining executive compensation and other business practices in the health insurance industry.

Approached for comment an insurance industry spokesman declined.
It was requested in the Waxman and Stupak letter that information be provided by early September. The companies are not legally required to comply, but it is known that the committee can respond to any refusals by subpoenaing the information at a later date.
Included in the requested documents are records that tolerate to compensation that was paid to any company executive who earned more than $500,000 in any year from 2003 to 2008.

In addition to this, Waxman and Stupak also requested documents revealing information regarding any premiums paid by policy holders, as well as claims payments, sales expenses, administrative expenses and profits. These are broken down by categories, an example being employer-provided coverage; personal coverage, and Medicare and Medicaid.

At a time in which the president’s health care proposal is under intense attack from Republicans and other critics, the requests were issued. The attack is also coming from the direction of the health insurance industry. Are large part of the opposition focuses on the public option or proposals that would allow the government to sell insurance only in competition with private carriers.

Obama and others who support this so-called government option are arguing that it would help control costs week keeping insurance companies honest in that they would be forced to deal with competition.

Opponents see it as gradually undermining the current insurance structure, which is based on the functioning of private insurers, and that it would lead to a system controlled by the government.

Following Obama’s speculating aloud over the weekend, with regard to the possibility that the current legislation could omit the government role in selling insurance, this issue drew intense attention.