February 26, 2010 "WSWS" --Feb. 19, 2010 -- 2010 -- The five largest US health insurance companies set new profit records in 2009, while the greatest economic downturn since the Great Depression sent millions of Americans onto the unemployment line and into poverty.

The five firms reported $12.2 billion in profits last year, an increase of $4.4 billion, or 56 percent, over 2008. At the same time, 2.7 million Americans who had been enrolled in private health plans the year before lost their coverage.

The profit figures were released last week by Health Care for America Now (HCAN), a coalition of health advocacy and labor groups pushing for passage of the Obama administration’s health care plan. The Obama administration has cynically seized on the data in an effort to push for the legislation at a televised bipartisan health care summit set for February 25.

In reality, the White House-backed plan—even the versions that were passed by Democrats in the House and Senate before being stalled by the victory of the Republicans in the recent Massachusetts Senate race—would do nothing to rein in insurance company profits. From the beginning, Obama has pledged not to challenge the for-profit health care system. Rather, his “reform” has been based on massive cuts to the government-run Medicare program and rationing health care for millions of ordinary Americans, all in the name of slashing the federal deficit.

The insurance giants’ profits reported by HCAN are indeed breathtaking. The study provides data on the top five for-profit health insurers: UnitedHealth Group Inc., WellPoint Inc., Aetna Inc., Humana Inc., and Cigna Corp. Four of the five saw earnings increase in 2009, with CIGNA’s profits jumping by a stunning 346 percent.

While the insurers raked in massive profits in 2009, four of the five companies insured fewer people through private coverage. At the same time, all but one of the five insurers increased the number of people they covered through public insurance programs, including Medicaid, Children’s Health Insurance Plans (CHIP), and Medicare. This is part of a long-term plan by insurers to shift responsibility for covering millions of sick, older, or lower-income customers to taxpayer-funded government health programs. These programs have, in turn, been increasingly hiring the big insurers to manage their care.

While their profits have soared, the proportion of dollars earned through premiums that is spent on health care expenses went down at three of the five firms, with ever-larger relative sums being funneled to administrative expenses and CEO and shareholder profits. The medical loss ratio (MLR)—the share of premiums used to pay health care providers—decreased or remained flat at most insurers.

The top five insurers continue, as well, to manipulate their capital resources carefully to benefit their Wall Street investors and corporate executives. The majority of companies report waiting six to eight weeks after receiving claims to pay doctors, hospitals, and patients, utilizing the cash to build up company reserves and boost their balance sheets.

Most of the companies also participate in what is known as share repurchase programs. Since 2003, the five insurers have bought $55.4 billion of their own stock on the open market, thus increasing earnings per share by reducing the number of outstanding shares, which raises the company’s stock price. CEOs compensated with stock options benefit handsomely as share prices are pushed higher.

The following are some of the details provided by HCAN on the five insurers, which are based on new filings with the US Securities and Exchange Commission and other sources:

Indianapolis, Indiana-based WellPoint, which operates Blue Cross franchises in 14 states, increased its profits by $2.3 billion, or 91 percent, in 2009 over the previous year. This set a new record of $4.75 billion for annual net income. Total enrollment at the insurer fell by 1.4 million or 3.9 percent.

UnitedHealth Group, based in Minnetonka, Minnesota, increased its profits in 2009 by $845 million, or 28 percent, over 2008, reaching $3.8 billion. Private enrollment fell by 1.7 million (6.5 percent), while public enrollment rose by 680,000 (17 percent). Since 2003, United Health has spent $21 billion on share repurchases to boost its profits.

Profits at Philadelphia-based Cigna rose by a staggering 346 percent in 2009, increasing by $1 billion over 2008. The company set a new record, with an annual net income of $1.3 billion. But while profits soared, total enrollment dropped by 639,000, or 5.5 percent. Cigna spent $1.6 million last year on lobbying in Congress for the health care industry. Since 2007, the insurer’s political action committee and employees have given $544,000 in political contributions to advance the company’s interests.

At Humana, based in Louisville, Kentucky, profits increased by 61 percent in 2009, $393 million over 2008, reaching $1 billion. The company holds onto claims payments by providers and members by an average of 55 days, the longest of the five companies. Humana purchased $23 million of its shares last year, and has bought back a total of $296 million in shares since 2003.

Aetna of Hartford, Connecticut, was the only insurer of the five to record a loss in 2009, with profits declining $108 million, or 8 percent, from the previous year. Total enrollment at Aetna increased by 1.2 million, or 6.9 percent, showing in the negative how increased coverage can impact an insurer’s bottom line.

Many of the 2.7 million Americans losing their health benefits since 2007 lost them along with their jobs as the recession took hold. Many others, the HCAN report notes, “were victims of an industry practice called purging, in which sharply higher premiums push individuals with health problems or employers with sicker of older workforces away from continuing coverage.”

When it comes time to renew coverage, individuals or employers are presented with double-digit premium increases, forcing them to drop their coverage or to look for cheaper, inferior plans.

The Los Angeles Times reported earlier this month that California’s biggest insurer, the Anthem Blue Cross subsidiary of WellPoint, was proposing a 30 to 39 percent hike in its premiums for many of its 800,000 customers who purchase their coverage individually.

One married Los Angeles couple, insured with Blue Cross for 30 years, received notice that effective March 1 their annual insurance rate would rise to $27,336 from an already astronomical $20,184. Anthem Blue Cross has temporarily postponed the rate hike, reserving the right to reintroduce the increases.

Other states have seen similar requests for rate hikes by WellPoint subsidiaries. Anthem of Connecticut requested a 24 percent increase last year, which was rejected by the state. In Maine, a request for an 18.5 percent premium increase was rejected by the state last year as being “excessive and unfairly discriminatory.” The insurer has come back this year asking for a 23 percent hike.

In recession-ravaged Michigan, Blue Cross/Blue Shield last year requested approval for a premium increase of 56 percent for its plans sold to individuals and families.

The insurance conglomerates have consistently defended purging its ranks of unprofitable customers, either through such rate hikes or by dropping coverage outright. In 2003, Humana CEO Michael McCallister commented, “If we have to choose between achieving our membership goals and achieving profitability goals, profits will win every time.” And WellPoint CEO Angela Braly remarked in 2008, “We will not sacrifice profitability for membership.”

The full text of the Health Care for America report can be found here. http://hcfan.3cdn.net/a9ce29d3038ef8a1e1_dhm6b9q0l.pdf

http://www.informationclearinghouse.info/article24875.htm

I did this earlier...the Cons can only spout objections to ANY reforms. Just Say No is their only plan and as long as they think they can get votes by opposing reforms they will continue to oppose it, so they don't care that 46K die every year because they are not able to afford HC. The US spends more in HC than any nation in the world but yet we rank 37th...

I think HC w/the public option may be dead but come November we can only hope that the DEM's get the numbers to get a bill passed next year...it depends on how many stupid Americans have not awakened to the fact that they are voting for corporate profits over the best interest of American's HC needs.

They're being used like cheap whores.

http://mingle2.com/topic/show/265906?page=2

I car pool with a guy and his wife is in middle management with a local hospital. He was telling me about the dinner hosted by the hospital network recognizing individual efforts and those who had a five or ten or fifteen year anniversary. The event was hosted by the hospital network and held at one of the shwankiest party centers around. he said at least four or five hundred people attended. the menue was filet mignon and open bar. I bit my tounge of course but couldnt help but wonder if this is not just one of the reasons our premiums keep going up and up.

sorry I didnt see this sooner

In related news........ this same healthcare network moved its major hospital from the City of Painesville to Concord Township. The new hospital is a gleaming gem. Seems to be stainless steel and glass and in a township that doesnot have a city tax or the poor to come in for free emergency care. The old hospital built to withstand a near miss nuclear blast stands empty in a city that is allready full of empty buildings.

No problem, reality threads drop quickly here...and to add about the HC industry's spending...I almost took a job in HC sales...the presenter showed us a Maui hotel they rent out every year for a week and fly their top 500 salespeople for a week there...gee, wonder what THAT cost?

Heh, they choose 2 out of the 50 people who applied...myself and a lady got selected but after I met with my boss and expressed my concerns about pre-existing conditions (In this case this ins co. had called pregnancy a "pre-existing consition") they redrew their offer to me....then the other lady called me and told me she was rejecting the offer as well because of her personal issues with their ethics.

Arseholes...lol.

Oh trust me, I pray to god every night that they pass this health care bill, that way after November we won't see the likes of Pelosi or anyone else who supported that bill in Washington ever again. :)

Yeah, let's vote back into office an agenda that got us into this mess....and it figures that most of the GOP's leftovers believe in fairy tales...but yet if so then these Jesus followers would want HC for all...humm.

The big lie, the dam lie and the dirty lie too. I should believe any thing a person says that lies about Glenn Beck.

Healthcare is a service provided by people,
Healthcare insurance is a product sold to make money for the Co. that sells it. They are two totally different things.
If you want healthcare costs to go down......who should take the pay cuts?
Nurses?
Doctors?
Janitors?
Maintenance crews?
Kitchen workers?
Administrators?
Aides and Orderly's?
Researchers?
Lab techs?
Technical Reps?

Who?

Who among the poor would you turn away from receiving services?


Everyone wants the best services and technology, but we all want it at a discount.

How about inflated CEO pay and bonuses...and their renting out whole hotels in Maui for a week for 500 employees....but above all how about these facts about adminstrative costs:

"In 1999, health administration costs totaled at least $294.3 billion in the United States, or $1,059 per capita, as compared with $307 per capita in Canada. After exclusions, administration accounted for 31.0 percent of health care expenditures in the United States and 16.7 percent of health care expenditures in Canada."

http://pnhp.org/news/Admin%20Cost%20study.pdf

Aside from data thats over ten years out of date..........

Healthcare insurance is a for profit business, just like any other business, and employs lots of people, and provides big returns to investors. Chances are if you have a retirement plan that has mutual funds...you are one of those investors.

The industry of providing healthcare is for profit too, nothing wrong with that. Making money is not a crime, it is what our economy is based on. The structures in place that deliver the healthcare,(hospitals, clinics, private practices, specialty offices) need to make more money than they spend.

Do we propose to limit the amount of profit that these businesses can make?
What other industries do we limit the amount of profit?

Do we need to make changes in how healthcare is paid for in the U.S.?

Absolutely!!!!

The question is how. The changes proposed now by the Gov. are still playing the insurance game. It's all based on for profit.

We need to nationalize healthcare.

paycuts arent necessary if we are all pitching in for the costs,,,

..the people need to devise their own healthcare plan and do away with these crooked insurance companies..a plan where eveyone puts in somnething..with as many people as there are,if we could put them under one plan we would shut these crooks down..and the hospitals would have to deal with US because we would be the ONLY game in town... ..UNITE the people and you have the POWER...

unity is power,,,,but the pundits keep us fighting and judging each other over trivial matters

" ... February 26, 2010 "WSWS" --Feb. 19, 2010 -- 2010 -- The five largest US health insurance companies set new profit records in 2009, while the greatest economic downturn since the Great Depression sent millions of Americans onto the unemployment line and into poverty.

The five firms reported $12.2 billion in profits last year, an increase of $4.4 billion, or 56 percent, over 2008. At the same time, 2.7 million Americans who had been enrolled in private health plans the year before lost their coverage.

The profit figures were released last week by Health Care for America Now (HCAN), a coalition of health advocacy and labor groups pushing for passage of the Obama administration’s health care plan. The Obama administration has cynically seized on the data in an effort to push for the legislation at a televised bipartisan health care summit set for February 25. ... "

Gee. And we're supposed to take this 'information' as 'proof' of a plot against the American people because it comes from an Obama front group ... ? Yeah, that's 'unbiased reporting'. They're just useful idiots helping to push his agenda by disinformation tactics. It's also classic agitprop. Now run along and leave the adults alone while we talk about how babies are made ...

Robert Zirkelbach, a spokesman for America's Health Insurance Plans, said insurance industry workers "do not deserve to be vilified for political purposes. ... For every dollar spent on health care in America, less than one penny goes toward health plan profits. The focus needs to be on the other 99 cents."


I agree....where is the uproar about what hospitals charge????
...........where is the uproar about what doctors charge??????
...........where is the uproar about what medicine cost?

and so on???

insurers have nothing to do with the costs of the above.....why not blame hospitals, doctors, and drug companies too?

We couldn't have any real health care reform last year because the whole debate was about the public option and now the debate is that the insurers profits cause most if not all of the problems with health care....UNBELIEVABLE

Obama is using the insurers as a political football....wise up people!

Ya know when Paul Revere ran around saying "the british are comeing the british are comeing" rational people didnt say outloud " Oh thats just Paul Revere he has an anti british bias.