Deborah Silverstein's speech to STRS board, May 20, 2010

I ask the STRS board to seriously consider divesting of all holdings in the private insurance industry.

Moral reasons compel STRS to divest its holdings. The Universal Declaration of Human Rights, adopted by the United Nation in 1948 at the urging of the United States, declares that all human beings have a right to medical care. Insurance companies regularly and routinely violate all standards of compliance with that declaration through the lack of universality, accessibility, equity, affordability, comprehensiveness and non-discrimination.

By holding investments in these companies, the shareholders support and encourage a type of behavior that is reprehensible and puts profits before the lives of living human beings. Some examples include:

• WellPoint recently awarded its CEO, Angela Braly, a 51% increase in salary, bringing her total income up over $13 million annually. During a time of economic recession, when many people are scraping together just enough to keep a roof over their heads and feed their children, a raise of this magnitude is irresponsible.
• The Indianapolis Star, on January 16, exposed that WellPoint had been covertly funding U.S. Chamber of Commerce attack ads against health care reform. WellPoint spent tens of millions on other non-covert lobbying.
• McClatchy Newspapers, on February 24: "While Anthem Blue Cross proposed a 39 percent rate increase on thousands of its California customers, its parent company gave 39 of its executives more than $1 million each and spent more than $27 million on 103 lavish executive retreats.
• The Los Angeles Times, on March 10, updated its readers on the ongoing rescission scandal involving WellPoint in California. "Only a small fraction of eligible Californians have benefited from agreements that Anthem Blue Cross made to settle accusations that they systematically and illegally dropped sick policyholders to avoid paying for their care."
• Consumer Watchdog reported March 31 that WellPoint sent a message to investors describing how it would simply re-label administrative costs as "medical care" in response to the new health reform law.
• Reuters reported in April that WellPoint routinely targeted women diagnosed with breast cancer, using a computer algorithm, and immediately began fraud investigations. Women were subsequently dropped from coverage for erroneous or flimsy reasons.
• The disclosures come to light after a recent investigation by Reuters showed that another health insurance company, Assurant Health, similarly targeted HIV-positive policyholders for rescission. That company was ordered by courts to pay millions of dollars in settlements.
• Last February, Anthem Blue Cross agreed to pay a $1 million fine and an additional $14 million in restitution to alleged victims to settle another lawsuit for improperly rescinding the policies of 2,330 people.
• A year earlier, Anthem Blue Cross, a subsidiary of WellPoint, agreed to pay a $10 million fine to settle similar charges, alleging that WellPoint had illegally rescinded more than 1,100 policyholders.
• A 2007 investigation by the California Department of Managed Health Care bore this out. The agency randomly selected 90 instances in which Anthem Blue Cross of California dropped the insurance of policyholders after diagnoses with costly or life-threatening illnesses to determine how many were legally justified. None were.

STRS must take a strong stand against such practices by divesting of any holdings in health insurance companies.

Deborah A. Silverstein
Kent, OH