CHARLESTON, W.Va. --  Sen. Jay Rockefeller, D-W.Va., is asking new questions about how CIGNA spends premiums paid by consumers to purchase health insurance policies.

Over the past decade, health-insurance premiums have risen at twice the rate of inflation.

And as those rates increase, consumers get less and less, argues Rockefeller, chair of the Senate Commerce Committee.

"The American people and I are asking a serious question and one that deserves a straight answer -- why are health insurance costs going up each year?" he asked in a letter sent to CIGNA CEO H. Edward Hanway on Monday.

"Health insurance companies claim to be good corporate citizens. If this is true, then they need to tell us how they are spending their customers' money.

"Are they spending it to make people well when they are sick and keep them healthy? Or is the money they charge going to profits, to executive salaries, and to figuring out how to deny care to people when they really need it?" Rockefeller asked.

Neither Chris Curran nor Amy Turkington, CIGNA spokespeople, returned telephone calls or e-mails on Tuesday afternoon.

Rockefeller sent earlier letters to CIGNA and 14 other large health insurance companies on Aug. 21, asking how much they spent on health care for every dollar collected in insurance premiums.

Congress is now considering health reform legislation that could end up sending nearly $500 billion in taxpayer dollars to private insurance companies.

 "It is critical that consumers have a guarantee that the overwhelming majority of subsidy dollars are going toward actual medical care," Rockefeller wrote to Hanway.

While the insurance industry tells Congress and the public it spends 87 cents of every premium dollar on health care, the actual "medical loss ratio" is lower, Rockefeller said in a statement released Tuesday.

The "medical loss ratio" is the percent of insurance premiums used to pay physicians, hospitals and other health-care providers.

CHARLESTON, W.Va. --  Sen. Jay Rockefeller, D-W.Va., is asking new questions about how CIGNA spends premiums paid by consumers to purchase health insurance policies.

Over the past decade, health-insurance premiums have risen at twice the rate of inflation.

And as those rates increase, consumers get less and less, argues Rockefeller, chair of the Senate Commerce Committee.

"The American people and I are asking a serious question and one that deserves a straight answer -- why are health insurance costs going up each year?" he asked in a letter sent to CIGNA CEO H. Edward Hanway on Monday.

"Health insurance companies claim to be good corporate citizens. If this is true, then they need to tell us how they are spending their customers' money.

"Are they spending it to make people well when they are sick and keep them healthy? Or is the money they charge going to profits, to executive salaries, and to figuring out how to deny care to people when they really need it?" Rockefeller asked.

Neither Chris Curran nor Amy Turkington, CIGNA spokespeople, returned telephone calls or e-mails on Tuesday afternoon.

Rockefeller sent earlier letters to CIGNA and 14 other large health insurance companies on Aug. 21, asking how much they spent on health care for every dollar collected in insurance premiums.

Congress is now considering health reform legislation that could end up sending nearly $500 billion in taxpayer dollars to private insurance companies.

 "It is critical that consumers have a guarantee that the overwhelming majority of subsidy dollars are going toward actual medical care," Rockefeller wrote to Hanway.

While the insurance industry tells Congress and the public it spends 87 cents of every premium dollar on health care, the actual "medical loss ratio" is lower, Rockefeller said in a statement released Tuesday.

The "medical loss ratio" is the percent of insurance premiums used to pay physicians, hospitals and other health-care providers.

The medical loss ratio for individual insurance policies was 79 percent, Rockefeller's letter stated. Loss ratios were 82 percent for small group policies and 86 percent for large group insurance policies.

Medical loss ratios for the six biggest companies (Aetna, CIGNA, Coventry, Humana, UnitedHealth Group and WellPoint) were significantly lower -- 74 percent for individual, 80 percent for small group and 84 percent for large group markets.

The unspent portions of premiums go to pay company salaries, administrative costs, advertising expenses, agent commissions and corporate profits.

Insurance companies also earn interest on the premiums they collect, which further increases profits.

Rockefeller asks for detailed company "medical loss ratios" over the last 10 years in his letter to Hanway and 14 other insurance executives.

Rockefeller also asked CIGNA for an explanation of why it failed to account for up to $5 billion in premiums it collected from businesses in 2008.

"The company's failure to accurately report this information not only appears to violate state laws, it also undermines the efforts of policymakers, consumer advocates and regulators to determine whether consumers and small businesses are getting a fair value for their health insurance premium dollars," Rockefeller said.

But CIGNA and other major private insurance companies have been reluctant to voluntarily provide the Senate Commerce Committee with detailed information about premiums, expenses and profits.

Rockefeller said the largest private insurance companies "appear to be squeezing more profits for Wall Street investors by spending a lower percentage of premium dollars on patient care than other insurers."

On June 24, former CIGNA executive Wendell Potter told the Senate Commerce Committee Wall Street exerts "intense pressure" on private insurance carriers to reduce costs.

"The American people deserve to hear the truth," Rockefeller said on Tuesday. "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."

Rockefeller plans to continue pushing for more oversight and regulatory control in any health-care legislation Congress passes this year.

Reach Paul J. Nyden at pjny...@wvgazette.com or 304-348-5164.