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August 19, 2009

House Democrats Investigating Health Insurer Pay and Profits

Aug. 19 (Bloomberg) -- U.S. House Democrats asked the nation’s biggest insurers to provide details on executive pay, spending on retreats and entertainment, and other financial records as part of an examination of industry practices.

House Energy and Commerce Committee Chairman Henry Waxman and Representative Bart Stupak, chairman of the panel’s oversight committee, sent a letter dated Aug. 17 to dozens of health-insurance companies, including Blue Shield of California.

The letter asks the companies to name all employees who were paid more than $500,000 in a single year between 2003 and 2008 and to itemize their pay, including bonuses, stock options, perquisites and deferred compensation.

The panel is investigating “executive compensation and other business practices in the health insurance industry,” Waxman and Stupak wrote in the letter. The lawmakers asked the insurers to provide most of the pay information by Sept. 4, and the other data by Sept. 14.

Waxman, of California, and Stupak, of Pennsylvania, are among a team of House Democrats trying to beat back criticism of legislation to redraw the nation’s medical-care system. House Speaker Nancy Pelosi, a California Democrat, has complained about the insurance industry’s “immoral” profits.

The letter asked the companies to explain how they determined what to pay executives and provide documentation used by their boards’ compensation committees. It also seeks information about corporate events held off company grounds since Jan. 1, 2007, including how much was spent on transportation, entertainment, gifts and food.

Medicare Advantage

The lawmakers asked the companies how much they earn through programs such as Medicare Advantage, which allows private insurers to deliver federally funded benefits. They called on the companies to provide data on profits from the individual insurance market and insurance provided through employers.

The Obama administration has proposed financing its overhaul of the nation’s health-care system in part by cutting federal subsidies to insurers participating in the Medicare Advantage program by $175 billion over the next 10 years.

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Posted by healthinsurance at August 19, 2009 09:16 AM