It was the best of times, it was the worst of times….
Yes, indeed. It was the best of times for the health care industry in 2009. And the worst of times for their customers. And it continues in 2010.
Let’s get right to it.
Wellpoint, UnitedHealth Group, Cigna, Aetna and Humana…the top five health insurers, earned a combined $12.2 billion last year, 2009. That was an increase of 56% over 2008, in what is likely to be the 2nd worst economic climate in our country’s history after the years of the Great Depression of the 1930s.
Humana alone earned $452 million in the 4th quarter of 2009 from Medicare Advantage Plans. Now why is that significant? Because these are people on fixed incomes, many of them poor. But that is not the worst of it. As the economy tanked, Humana actually made more in 2009 than in 2008. In 2008 it earned $267 million in the 4th quarter. In 2009, $452 million…a 70% increase!
In 2009 there were at least 7 million more unemployed, several million foreclosures, over a thousand banks closed, $700 million in government money poured into Wall Street to save the financial system and an $800 billion stimulus bill that should have been large enough to say to the health insurance industry: enough already! But it wasn’t enough for the greedy CEOs of health insurance firms.
At the same time that seniors and others are suffering, CEOs of these companies are averaging more than $12 million a year. To pay for these big salaries, the health care companies are draining the household earnings of senior citizens. Californians saw their Anthem Blue Cross rates go up, and will go up 39 percent this year. Insurance premium increases of 56%, 24% and 23% have been posted in Michigan, Connecticut and Maine respectively.
And who are the Senators from those states? The two Michigan Senators, Levin and Stabenow are strong proponents of health care reform. But Joe Lieberman of Connecticut, a Neocon who calls himself an Independent and both Olympia Snowe and Susan Collins of Maine voted against health care reform. Both are Neoconservative Republicans, who each receive substantial amounts of money from the health care industry.
A staggering and extremely troubling figure from Health and Human Services shows that their investigation uncovered an astonishing 250% profit for the health insurance industry’s ten top companies between 2008 and 2009. One year! A 250% increase in profits.
While individuals were struggling in the worst of times, trying simply to find health insurance, Ronald A. Williams was living the best of times. The CEO of Aetna health insurance made a total of $38,120,000 last year alone.
H. Edward Hanway of Cigna took a big hit last year. He made only $10,270,000, which was only half his average over the last five years during which period he has earned a total of $121,350,000.
Stephen J. Hemsley, CEO of UnitedHealth Group is not interested in letting you know how much he made last year or the year before. But you can come close enough. In 2007, he made $13,100,000. He has at least $56 million in stock. So if he gambled all his earnings in 2005 and 2006 and made no more in 2008 and 2009 than he did in 2007, over the last five years he still would have made $95,300,000. Not bad. No tag days for Mr. Hemsley. The same cannot be said for most of his customers.
In a relatively equal opportunity world of excess, Angela Braly of WellPoint did very well. She had compensation of $9,844, 212 in 2008 after earning $9,094,271 in 2007.
So, can we simply agree that there are a lot of costs being borne by the American People that we may be able to at least spread around to a large group of participants? We can add another 35 million, which will bring costs down. There are other incentives for states and insurance companies to bring down costs, like more competition, and having insurance pools that spread across state lines.
The Republicans have not been concerned with cost cutting. Perhaps that is because they are, on the whole, more affluent. Perhaps it is because they often move from Capitol Hill to K-Street seamlessly and K-Street probably does pretty well by the insurance firms for whom they lobby incessantly.
Even so, they cannot say that they had no chance to participate in the health care debate. They had to be forced into it. But, supporting their health insurance patrons and the status quo, they had few constructive ideas.
The President’s bill includes a number of ideas that the Neocons in Congress put forward. They were also put forward by the Democrats, as well as the bulk of reform. Nonetheless, the President has listed them as Republican ideas.
They pretend that their own “health care reform” bill, which has nothing new and as main provisions only guarantees for drug companies and medical liability for incompetent doctors, is the extent of their effort. But we can be pretty sure that the proposals that are included will be touted as Republican the closer we get to an actual vote.
Among them are:
Personal Responsibility Incentives through wellness programs.
Medical liability reform research
Extension of dependent coverage to age 26
Automatic enrollment or employee opt-out in employer health care programs
Health care providers database to monitor participation and potential fraud
New Medicare fraud safeguards
Monitoring of community mental health centers
Various proposals to eliminate waste, fraud and abuse
So Republicans cannot say that they were excluded. They proposed these very same ideas, whether in their own plans or as amendments to the plans that have become the final plan put forward by President Obama.
So what is the President’s proposed health care plan. Here it is, in very accurate terms but not legislative language.
It will improve affordability and accountability. A large tax cut, a subsidy, will be available so that everyone will be able to afford good, reliable health care. That is done also by mandating health care more competitive. So, with lower costs, and subsidies, everyone will be able to afford health care.
It will be paid for, not by government borrowing but by a combination of individual premiums, by substitution of some health care subsidies for other current government costs, and by some “sin” taxes.
The relatively small excise tax on health care plans over $27,500 for executives and those who were given them as tax-free perks will not take place until 2018, but, if necessary, will be used as an additional means of paying for the bill.
There will also be a shift of hundreds of thousands of people onto Medicare from Medicare Advantage. That will even save more because Medicare Advantage, a private system, like others, is raising its rates dramatically ahead of a possible public option. This will be a cost-savings to those people and a huge cost-saving for the government. It will also line up the system for future improvements in Medicare services and delivery. In addition, the prescription drug bill “donut hole” will be completely eliminated.
To insure that there will not be mishandling, new government regulations will set up severe guidelines for possible waste, fraud and abuse by hospitals, insurance companies, pharmaceutical companies and individuals. (Republicans like the part about individuals potentially being investigated.) Government regulations will also insure that individuals on private health care plans cannot be discriminated against for pre-existing conditions and cannot be denied care.
In addition to making health care available to everyone, a number of steps will be taken to improve quality of health care, within the health care system itself. Medicare and Medicaid will be substantially improved. More doctors will be educated, particularly in general practice. With the worry about denial of insurance removed, all medical records can now be shared among those responsible for health care. One day soon, hopefully, your medical records will be available to you anywhere in the world you may be.
A much stronger emphasis will be placed on wellness as both a quality of life and as a cost saving measure. Many more facilities will be created to address wellness and health at an early stage.
Despite Republican misinformation, medical panels will assess new and promising technologies so that a very large number of specialists can come to a much quicker consensus about new treatments and procedures. The more rapidly these can be integrated, the lower the costs and the much more successful the outcomes.
In short, this is a win-win-win situation. And if you are still not sure, go back to the beginning and read about the insurance premium increases already underway, think about your shrinking paycheck, and have some compassion for the literally 14,000 people who lose their health insurance, whether healthy or seriously ill…makes no difference…every single day in the United States of America.