Annual [updated] open letter to Health Net CEO, Jay M. Gellert
P.S.S. I'd also add one more ridiculous item to that list — the vicious cycle effect: The recession, coupled with insurers like Health Net continuing to increase health insurance premiums, has resulted in policyholders dropping their coverage which, in turn, forces those insurers to spread these ever increasing costs and risk among a smaller pool of customers. And what does this lead to? Yup, you guessed it! Even further increased health insurance premiums for those that remain. It's an ugly, sad vicious cycle.
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February 11, 2010
Mr. Jay M. Gellert
President and Chief Executive Officer
Health Net, Inc.
21650 Oxnard Street
Woodland Hills, California 91367
Dear Mr. Gellert:
As the President and Chief Executive Officer of Health Net, I think you should be made aware of something that your company is doing and the impact it will have on the well-being of your members. My family has a Health Net PPO insurance policy. In January 2010, we received a form letter from your company informing us that our policy premiums would be increasing 35%. The letter cited our age, type of coverage, dependent status, address, and the cost of providing health care as contributing factors. Its ironic because we received a similar letter from Health Net in January 2009 citing the same contributing factors for the same exact increase: 35%. In just two years, Health Net has increased our private health insurance premiums a whopping 82%. To me, this is unfathomably egregious and immoral.
My wife and I have a 28-month-old daughter, Gwendolyn. Gwendolyn was born perfectly healthy in October 2007, but was diagnosed with the motor neuron disease Spinal Muscular Atrophy (SMA) at 6-months. Her mind is no different from that of any other healthy baby, but her body is failing her. She is completely paralyzed and requires constant 24-hour care. Based on statistics, Gwendolyn is an outlier.
As you can imagine, our situation is extremely challenging. I dont tell you this to ask for your sympathy, I tell you this to explain that an unexpected premium increase of this magnitude is financially catastrophic and, given the uninsurability of our family due to Gwendolyn's disease, is immoral. Im certain that, as one of the largest health insurance providers in California, your decision to increase premiums to this extent is negatively impacting thousands of members in similar circumstances. According to a Harvard University study, more than 50% of household bankruptcies are related to medical debt and more than 75% of those had health insurance. No doubt Health Nets decision to increase premiums at this rate will only increase this appalling statistic.
As the President and Chief Executive Officer of Health Net, Im formally asking that you reconsider your premium increase policy for these types of situations not only for my family, but for all families that have been impacted by life-altering medical circumstances. I understand that the economics of the health care industry are squeezing all parties involved and I realize that it may not help you make your quarterly or annual earnings estimates, but its the right, just, and moral thing to do.
I thank you in advance for your time and consideration and would be more than happy to speak with you if you would like more information.
Kind regards,
Bill Strong
Santa Barbara, California