Wellpoint Inc., the nation’s largest health insurance company by membership, posted record earnings to Wall Street on the same day it sent a carefully-worded warning to the Obama Administration that it expects to book more profits if health insurers are forced to cover people with pre-existing conditions.
“The cost of premiums will rise if Democrats force plans to cover people with pre-existing conditions,” said Wellpoint CEO, Angela Braly. “Insurers went along with their practice of refusing coverage based on pre-existing conditions because the legislation also required 30 million more Americans to get coverage.”
Since debate about how to reform healthcare has simmered in Congress, the pre-existing element was among the last meaningful legislative changes to survive. But the House and Senate essentially concede that the mandate for all Americans to purchase individual health insurance is all but dead. Without the mandate, Wellpoint and other major health insurance companies wouldn’t have a built-in guarantee of new business coming to pay for those with pre-existing conditions.
“Without those added customers,” Braly added, “insurance companies will raise rates to cover the cost of the sicker people.”
Wellpoint posted a $536 million profit in the last quarter, after adjustments for the sale of its former NetRx pharmacy benefits unit to rival Express Scripts in December. Insurance industry analysts had been bracing for a flat earnings report amidst news that membership in some of the biggest health insurance companies continues to decline.