Attorney General Richard Blumenthal says Anthem is getting the best bargains going to any health insurance company by virtue of a clause that requires hospitals to give it the “most favored treatment at the same time it’s raising its premiums.”

“Something’s wrong with this picture,” Blumenthal said Monday in an interview. “The federal government should be investigating it.”

To that end, Blumenthal wrote President Obama’s top health official Monday, Health and Human Services Secretary Kathleen Sebelius, to let her know this was going on here in Connecticut and should be investigated at a national level.

The most favored nation clause requires hospitals to give Anthem the best rates, which would lead one to think consumers should be benefiting from these savings when, in fact, Anthem has proposed increases up to 20 percent, Blumenthal said.

The letter sent to Sebelius is part of the state’s ongoing antitrust investigation, Blumenthal said.

In response to Blumenthal’s statements Monday, Anthem’s spokeswoman Sarah Yeager said, “Anthem Blue Cross and Blue Shield has been working with the Attorney General to address his questions regarding Anthem’s Connecticut hospital contracts. We have no reason to believe that any provision in our hospital contracts is in violation of applicable law.”

“The increases in premium costs, however, are driven by much more than the increase in hospital rates. An aging population, higher patient utilization, the increase of chronic disease, new high-cost technologies, and cost shifting from Medicare and Medicaid all contribute to rising insurance premiums,” Yeager said.

“The increasing costs of health care are no justification for 20 percent increases in premium rates,” Blumenthal said.

But it’s not only health care costs that are driving up premiums.

“Additionally, in this difficult economy, younger, healthier policyholders who lose their job are canceling their health coverage. This means there are fewer policyholders, resulting in those who are left having to pay more,” Yeager said.

“In my view there is no justifiable explanation,” Blumenthal said.
Blumenthal is afraid the increased premiums may be going to pad the bottomline of Wellpoint, Anthem’s parent company. The parent company is enriched as a result of these practices, Blumenthal said.

“There are two questions here: Are these most favored nation clauses legal because they constrain competition, and second why aren’t consumers getting the benefit of the better rates Anthem is receiving,” Blumenthal said.

“Our investigation remains ongoing, but federal officials deserve immediate warning about these practices—potentially having national implications and warranting federal investigation,” Blumenthal said in a press release Monday.

Meanwhile, “Anthem will continue to work hard to help ensure our members have access to cost-effective, quality health care services in Connecticut,” Yeager said.