"Jaw-dropping" health insurance rate increases like those proposed by Wellpoint in California are worrying consumers around the country, and "they're terrified they're next," Health and Human Secretary Kathleen Sebelius said Thursday in a conference call with regional reporters.

Her criticism of the insurance industry comes a week before President Barack Obama visits St. Louis to try to persuade the public to support his proposals to provide coverage for the uninsured and prevent people from being denied coverage because of pre-existing conditions. He is facing a lot of opposition from Senate Republicans and from some moderate Democrats as well. Both groups argue that health reform should focus mainly on attacking fraud and waste in Medicare and Medicaid and restraining medical malpractice awards.

Before her discussion with reporters, Sebelius met with health insurers and some state insurance commissioners. Representing state regulators were insurance commissioners from Kansas, West Virginia and Pennsylvania. In addition to Wellpoint, insurers attending the session included Aetna, Cigna and UnitedHealth Group.

Sebelius, a former governor and former state insurance commissioner in Kansas, said the meeting was prompted by "jaw-dropping rate increases that are being proposed this year in companies around the country." She says the rate hikes are falling heavily on the small group and individual market "where people have no bargaining power and no leverage, and are often desperate in terms of what they are going to do."

She conceded that there was little the administration and some states could do to head off some rate hikes that they feel are unacceptable, except shine "a bright light" on the issue and try to make insurers serve the interests of their customers as well as shareholders.

"Right now we're in a situation where high priced (insurance) companies filed earnings reports of $12.7 billion in 2009" and yet she says, some consumers are facing "double-digit rate increases. It just doesn't make a lot of sense to people across America."

Sebelius ended Thursday's meeting with insurance industry representatives by asking them to begin voluntarily posting their data online, covering such issues as their profits, their payouts in claims and their losses. She didn't say how many insurers took up her offer, but said, "At the very least we need some transparency so people understand what's going on," she said. "I'm very hopeful (industry) people will actually come forward with the information. At the very least, they owe that to the customers. And they certainly need to be able to justify what is going on so that people understand why their rates are sky high and why they may not be able to afford any insurance next month or next year until we get comprehensive reform in place and get some different rules established."

Wellpoint has strongly defended its proposed rate hikes, saying the company's profit margin in California is lower than that of its competitors and adding that the issue getting the most media attention, the 39 percent increase, involves a relatively small portion of its individual policyholders.

Wellpoint also has argued that even with the rate hikes, it would realize a profit of only about 2.3 percent. But Sebelius said a Wellpoint financial analyst was upbeat, expecting the company is to outperform the market this year.

"What that translates into is good news for shareholders and really bad news for consumers because they (Wellpoint officials) are clearly going to collect more money and return that into dividends as opposed to paying out medical claims," Sebelius said.

In the absence of major health reforms and in addition to encouraging insurers to post their rate proposals and profit-loss information online, Sebelius says the administration and the public should continue to "shine a bright light" on the industry to discourage it from proposing what she called exorbitant rate hikes.

She said the "bright light" of public reaction prompted Wellpoint to delay its proposed California rate hikes for a couple of months and prompted the California insurance commissioner's office to launch an investigation into the rate proposal.