Major health insurance providers Aetna, WellPoint and UnitedHealth reported huge earnings this quarter, up significantly from the same quarter last year, all while the number of people actually receiving coverage for care is steadily decreasing.
Wendell Potter, a former CIGNA executive and industry insider, said in his column for the Center for Public Integrity’s iWatch News that those reported earnings, which have been steadily increasing for several quarters in a row even as the U.S. is scrambling to recover from a down economy, prove that insurance executives really value “profits over people.”
The greedy tendencies of mammoth corporations (and insurance moguls in particular) doesn’t necessarily come as much of a surprise, but the fact that much of those profits come from denying coverage to policyholders is more than a little disheartening, to say the least. —BF
Wendell Potter for iWatchNews:
This has made Wall Street very happy indeed, as reflected in the breathtaking increase in the companies’ share prices over the past year. Since the end of July 2010, investors have bid up the stock by more than 50 percent at four of the big five. WellPoint, the laggard, saw its stock price increase by a still-impressive 35 percent.
One of the secrets to achieving these results is what the insurers euphemistically call “medical management.” That often translates into denied claims and denied coverage for doctor-ordered care. The fewer claims you pay and the more procedures you refuse to pay for, the more money is left over for investors to put in their pockets.
Another important way they’ve been able to sustain such a string of impressive earnings results is to shift more and more of the cost of care to their policyholders. An increasing percentage of these companies’ policyholders are enrolled in plans that require greater cost sharing. Those policyholders pay more for care out of their own pockets than ever before while their insurers are paying much less.
Flickr / bradleypjohnson (CC-BY)
UnitedHealth Group, Aetna and WellPoint were named among the top health insurance companies in 2011 by Fortune magazine.