California's Anthem Blue Cross justified its whopping 39 percent insurance premium hike by citing rising medical costs. But, it turns out, its parent company Wellpoint, Inc. has been spending tens of millions on large executive bonuses and fancy retreats.


According to congressional investigators, Wellpoint dished out over $1 million in bonuses to each of 39 executives, and spent at least $27 million on 103 lavish company trips, McClatchy reports.

The revelation throws something of a wrench into the claim by WellPoint's president and chief executive officer Angela Braly that the rake hikes were an effort to remain financially solvent, which she said before the House committee.

"Raising our premiums was not something we wanted to do," Braly said. "But we believe this was the most prudent choice given the rising cost of care and the problems caused by many younger and healthier policyholders dropping or reducing their coverage during tough economic times."

She claimed the company's decision was "actuarially sound and in full compliance with all requirements in the law."

Braly herself was paid $4.01 million in total compensation in 2009. In 2007, however, her total payout was substantially more, at $14.9 million.

Lawmakers grilled her over the increases, concluding through a series of obtained e-mails and company documents that WellPoint has worked to reduce costs by promoting plans with higher co-pays and cost-sharing, according to The Money Times.

"One question we asked is where does all of this money go?" asked Rep. Henry Waxman (D-CA) on Wednesday at a House subcommittee hearing. "Corporate executives at WellPoint are thriving, while its policyholders are paying the price."

The revelation of Blue Cross's rate hikes has led to controversy and fueled the resurgence of the health care reform debate in Congress, which lawmakers from both parties will hold a lengthy televised meeting about Thursday.

Saying that Blue Cross' rate hike signals a failure of states to effectively regulate private insurers, President Obama has called for a federal Health Insurance Rate Authority commission to oversee insurance practices.

The developments come against a bleak backdrop for the already uninsured. Over 45 million in America remain uninsured and medical bankruptcies continue to rise, as the nation's economic woes threaten to further exacerbate the situation for consumers.

The debate over the Democrats' reform proposal appears to be in its final stretch. The House and Senate have each approved bills, and Democrats are now working to reconcile the differences and create a package that can pass a final motion and be signed into law.

Senate Majority Leader Harry Reid (D-NV) has said that he'd use a procedural measure called reconciliation in 60 days if a compromise can't be reached -- the procedure would bypass a need to come up with 60 votes in the Senate. Democrats lost their 60th vote after Massachusetts elected Republican Sen. Scott Brown to fill the seat held by the late Sen. Ted Kennedy.