Senator John D. (Jay) Rockefeller IV (D-WV), Chairman of the U.S. Senate Committee on Commerce, Science, and Transportation, has sent a letter to H. Edward Hanway, the CEO of CIGNA, in which the Senator raises questions concerning how CIGNA spends consumers' health care premium dollars. The Senator asks that Hanway provide information clarifying the amount of premiums the company receives and the claims the company pays for group health insurance products.

The letter also has new information about the percentage of consumers' premium dollars that insurance companies spend on medical care, known as the "medical loss ratio." Senator Rockefeller explains that he wrote CIGNA in August of 2009 as well as 14 other larger insurance companies requesting information about their medical loss ratios. Rockefeller says that the responses from the companies indicated the segment-specific (individual, small and large group market segments) information is proprietary and business sensitive and not disclosed to the public.

Senator Rockefeller goes on to say that due to the reluctance to share the medical loss information, the Committee staff has been analyzing premium and claims data the companies have filed with the National Association of Insurance Commissioners. That analysis demonstrates that while the insurance industry has told Congress and the public that it spends 87 cents out of every premium dollar on health care, the actual medical loss ratio in the health insurance industry is significantly lower. The industry spends a lower percentage of premium dollars on patient care in the individual and small group market segments than in the large group market--businesses with more than 50 employees. The Committee has also found inconsistencies in how CIGNA and its subsidiaries provide business information to the public and to regulators. The company appears to have submitted state insurance regulatory filings that are not accurately describing the business activities in the small and large group business segments. Senator Rockefeller states this failure to submit accurate medical loss ratio information violates the law, undermines efforts of policy makers, consumer advocates and regulators in the determination of fair value for health care premium dollars.

"The data released in this letter reveals that while health care costs are spiraling upwards, consumers are paying more and getting less, and the health insurance industry doesn't want anyone to know what they are up to," Rockefeller commented in a press release." The American people deserve to hear the truth. CIGNA's apparent failure to accurately report its business activities is just another disturbing example of why we need more transparency and accountability in the health insurance industry. I am going to continue fighting the big health insurance companies as we move health reform to the Senate Floor and Conference and I will not stop until all Americans get a fair shake."

Senator Rockefeller's letter to CIGNA and comments can be accessed at: http://commerce.senate.gov/public/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=f0f66125-5f0e-4227-aa16-40037894cd80&Month=11&Year=2009

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