Health Insurance Profit Revelations Make Case for Price Controls
February 14, 2010
While working people are experiencing the worst economic crisis in our lifetimes, the health insurance industry is setting new records for their profitability. The pro-reform group Health Care for America Now! has released a blockbuster new report [1] detailing this corporate robbery.
The report found that the five biggest for-profit health insurance companies; UnitedHealth Group Inc., WellPoint Inc., Aetna Inc., Humana Inc., and Cigna Corp., raked-in a combined profit of $12.2 billion last year. This was a 56% increase over 2008. The five giant insurers also managed to generate these phenomenal profits while collecting premiums from 2.7 million fewer policyholders.
Price increases by virtually all health insurance companies continue to gallop far ahead of the rate of overall inflation. Double digit rate increases are now common. The California subsidiary of WellPoint – Anthem Blue Cross – recently announced that annual premium rates on some individual health policies would increase by 39%. Given the astronomical cost of health insurance, and these massive percentage increases translate into thousands and thousands of dollars in higher premiums each year for those insured.
Congress -- and to a lesser extent individual state insurance regulatory agencies -- must shoulder the blame for allowing this corporate crime wave to grow and grow, and to go unprosecuted. The health insurance companies openly engage in price fixing, market rigging and manipulation, and various other unscrupulous and illegal practices. Their unchecked conduct has led to this outlandish runaway escalation of prices for consumers. Anticipating this, the UE Policy Action Committee resolved [2] in its report from the 71st UE National Convention last September in New Haven to, “...request that (Congress) impose price caps on health insurance rate increases of no more than the rate of inflation as defined by the CPI (Consumer Price Index)...”
Commenting on the revelations of the super-profit bonanza for the insurance companies, UE General Secretary-Treasurer Bruce Klipple said, “After a full year of effort Congress has failed to fix the health insurance and health care mess. Congressional Republicans have defended the insurance companies from day one, and the Democrat leadership still wastes precious time trying to find Republican support for reform. Meanwhile, the insurance companies squeeze record-breaking profits from consumers. We can expect even bigger rate increases to come. We saw this same price gouging in 1995, after the insurance industry wrecked the Clinton reform plan. It’s time to put price caps on health insurance. The case is made obvious by the conduct of these companies. Last September our union saw this coming, and moved to demand price caps. The rank-and-file members of our Policy Action Committee hit the nail right on the head. It’s time for Congress to shut off the health insurance profit spigot and give working people some relief.”
The report found that the five biggest for-profit health insurance companies; UnitedHealth Group Inc., WellPoint Inc., Aetna Inc., Humana Inc., and Cigna Corp., raked-in a combined profit of $12.2 billion last year. This was a 56% increase over 2008. The five giant insurers also managed to generate these phenomenal profits while collecting premiums from 2.7 million fewer policyholders.
Price increases by virtually all health insurance companies continue to gallop far ahead of the rate of overall inflation. Double digit rate increases are now common. The California subsidiary of WellPoint – Anthem Blue Cross – recently announced that annual premium rates on some individual health policies would increase by 39%. Given the astronomical cost of health insurance, and these massive percentage increases translate into thousands and thousands of dollars in higher premiums each year for those insured.
Congress -- and to a lesser extent individual state insurance regulatory agencies -- must shoulder the blame for allowing this corporate crime wave to grow and grow, and to go unprosecuted. The health insurance companies openly engage in price fixing, market rigging and manipulation, and various other unscrupulous and illegal practices. Their unchecked conduct has led to this outlandish runaway escalation of prices for consumers. Anticipating this, the UE Policy Action Committee resolved [2] in its report from the 71st UE National Convention last September in New Haven to, “...request that (Congress) impose price caps on health insurance rate increases of no more than the rate of inflation as defined by the CPI (Consumer Price Index)...”
Commenting on the revelations of the super-profit bonanza for the insurance companies, UE General Secretary-Treasurer Bruce Klipple said, “After a full year of effort Congress has failed to fix the health insurance and health care mess. Congressional Republicans have defended the insurance companies from day one, and the Democrat leadership still wastes precious time trying to find Republican support for reform. Meanwhile, the insurance companies squeeze record-breaking profits from consumers. We can expect even bigger rate increases to come. We saw this same price gouging in 1995, after the insurance industry wrecked the Clinton reform plan. It’s time to put price caps on health insurance. The case is made obvious by the conduct of these companies. Last September our union saw this coming, and moved to demand price caps. The rank-and-file members of our Policy Action Committee hit the nail right on the head. It’s time for Congress to shut off the health insurance profit spigot and give working people some relief.”