Greed Gone Wild: Our Health Insurance Industry Is Sick and Wrong

Colorado, like every other state in the country, finds itself right in the middle of the health care reform debate. Over 800,000 Coloradoans have no health insurance at all. A small number choose not to have health insurance because of the cost and because they feel they do not need it. Many others cannot afford the premiums. Many, sadly, have been denied insurance by private insurers or have had their policies rescinded. It is the private insurance industry that presents the largest barrier to health care reform in Colorado. Competition is limited by the two largest insurers who have well over 50% of the private business in the state, who negotiate prices with providers, set network limitations, really, largely limit the choices we have: Blue Cross and UnitedHealth.

As the Clinton administration pushed for health care reform in 1993, the insurance industry said, as they say now, that they'll cover everyone, have no limits due to pre-existing conditions and will not deny care. We can see how far they have not come, how disingenuous they have been. In 1993, records showed 31,000,000 uninsured. Today 47,000,000 are uninsured, many of whom have been cut by insurers, well, because they aren't worth insuring. Too many broken wheels and rust, so to speak. Too many bad valves and blown gaskets. Cut them out. Insurance executives are having quite a party at our expense.

While the insurers are only one culprit in this Greed Gone Wild health care system we have, I wish to point out a few facts garnered from two finance sites. One is Morningstar, a most respected information source for investors. The other is Yahoo! Finance. These facts are in regards to the argument that our health insurers are publicly traded companies that have their enrollees and investors' best interests in mind. Were that the case, we'd might be able to argue on their behalf. But here are the facts.

Of the top five insurers -- WellPoint, Humana, Aetna, UnitedHealth, and Cigna -- the ownership by those who run the companies, called insider ownership, is less than 1% of all the stock traded. That is an indication of how little skin the executives have in the game, how little they have invested of their own money; they are merely "playing" with everyone else's money: that of the shareholders. (Wise investors like to invest in companies whose executives own a large part of the companies they manage.)

In the mean time, the executives at Aetna gave themselves $42.9 million in salaries in 2008, which was a 24% increase over the year before, in this most troubling of economic times for the country, and 1,400% more than the $3.5 million they paid themselves in 2004. At the same time, they paid out an innocuous four cents a share dividend to shareholders out of the $3.93 a share in profits they made. UnitedHealth paid a three cents a share dividend out of the $2.95 a share profit they made, while paying themselves over $20 million in salaries. Cigna executives paid a four cents a share dividend out of the $2.22 a share they made while compensating themselves $20.69 million. Humana and WellPoint (which is Blue Cross Blue Shield) executives paid no dividends in 2008 and paid themselves a combined $40.83 million in salaries. Wow. Read that number again: $40.83 million in 2008. In salaries and other compensation.

So, when we hear health insurers bemoaning that they are being vilified and the victims of a liberal press, I'd say not. Their job is to look out for their shareholders, so we are told. And even at that they are terrible. While these huge salaries are being garnered by executives who have nothing to lose if the share prices of their companies go to zero, because they themselves own very little stock in their companies, let me inform you how poorly the shareholders have managed.

Aetna's share price was $55.97 not long ago. Now it is $30.80. Cigna's share price was $53.72 and now sits at $31.84. Humana was $79.47 and is $39.89 now. WellPoint was $88.10 and now sits at $55.40. And UnitedHealth share price has been cut in half from $55.89 to $28.58. All this while profits have burgeoned and executive salaries are through the roof.

We can try all we want to make excuses for these companies. But there are none. They represent the worst in greed and avarice. In our health care. This is sick, wrong, and immoral. There is no honor or nobility in this industry. And to all those who say they trust our government less than these capitalists, I say fine. Work with them. You can have them; they are yours.

Almost one in four Coloradoans, over 1,000,000 of those who do have health insurance, get their coverage through the government. 46% of all Americans as well. All many Coloradoans are asking for is an opportunity, a choice to obtain health care like these people. A public option.

Our government provides health coverage now through the VA, Medicare, TRICARE and other government managed health care entities. Medical care is provided at our esteemed government funded Walter Reed, where by the way, most of our elected officials, Republican and Democrat, progressive and tea-bagger alike, go for their serious care. A government hospital where prices are set, salaries are set, and care is overseen by the government. A single payer system. Management fees for these government run programs are lean because there is no profit motive; they run 6% for Medicaid and Medicare. TRICARE and the VA run 4%. The health insurers spends 20 to 30% to "manage" care. Folded within that 20 to 30% are these hugely selfish executive salaries and bonuses.

Coloradoans in favor of a government option are not asking for a hand-out. We are more than willing to pay our fair share. Quite simply, we would rather pay into a system that is non-profit government run than give these greedy executives one more dime. We believe the government that stands behind our military, our public universities, the National Institutes of Heath, our public service companies, our fire departments, police forces, and our public lands managers are more trustworthy than profit driven health insurers. Period.

Let's get a public option for Colorado and the whole country.

Tim Saltonstall
Health Care for All Colorado
Foothills Unitarian Church Health Care Action Team
Health Care for America Now

Comments

[Raul Garcia]

In Colorado you have no gray area; if you can't afford health insurance or qualify for Medicare or Medicaid, you are on your own.

[droftim]

I've given up expecting anything substantive from the current activties in Congress. I now think that our real chance for reform will be at the state level. After all, that's how Canada got universal healthcare: the provincial program of Saskatchewa proved to be so successful that everyone else in the country wanted the same thing.

There is also some validity in concerns that many have about scaling other programs to the US. Why not allow individual states to develop their own versions of universal healthcare. If the citizens of a state want a single-payer system for all, then why not let them do that? If one or more states want to experiment with systems like France or Germany, why not let them? Let all the Medicare, Medicaid, SCHIP, FHEB, TRICARE, etc. money for the state be combined with mandatory employer and employee contributions into a a single fund to cover healtcare for all legal residents and see what happens. If the citizens in a state do not want to be delivered as a captive market to for-profit insurance companies let them op out. Maybe they will decides to allow allow private policies to supplement the basic coverage, perhaps they won't. Why don't they have a voice in this?

[baseline]

Colorado is one state that could go to a single-payer system of its own. It has a number of local groups working on the single-payer idea. There was a Blue Ribbon Commission that gave it a high recommendation. Furthermore Colorado has no large metropolital population on its border to complicate things. Let them go for it.

[realmedicine]

While this is good information to discuss, let's also highlight the risk of not treating big pharma and medical education. Pharma has very successfully trained insurance companies, universities, MDs and the public to accept their version of reality and the artificial hope that meds can solve every problem.

Insurance companies buy into this when they cover very costly, but clinically useless meds rather than covering low-cost, low-risk preventative therapies. The public fails for not exploring these alternatives, for not taking better care of themselves and for failing to challenge their MD. Medical educational institutions are pumping out graduates but where is the paradigm shift in preventative care? Who is leading the way to better healthcare? Is everyone caught in the status quo?

Wholistic analysis and wholistic solutions are needed to solve systemic healthcare problems. Don't fall victim to the notion that any single solution will repair healthcare. Each dimension of this industry needs to be rebuilt from the ground up.

[LindaSmiles]

I completely agree that the only things being discussed are financial, and that at the root of the problem is the idea that pharmaceutical products are good solutions to any type of health concerns. The standard medical training in this country is a joke, which would be really funny, if it was not so sad that such a huge majority of Americans believe doctors have received "quality" medical training. I (along with many others) foolishly believed candidate Obama when he said that he would not make spending money on this nonsense mandatory.

[LindaSmiles]

I am a conservative and I completely agree that the public option is the only reasonable solution, and we would like to see it available at the Medicare price of under $100 per month. If the insurance companies have nothing left to sell but life insurance, so be it, they had their chance.

We heard (from customers at a local grocery store) that President Obama is considering fully legalizing marijuana and using the money the federal and state governments are now spending to apprehend and provide room and board (jail) marijuana smokers to instead fully fund Medicare (which the people who have it say they like).

This sounds like a wonderful solution to the main voter concern about the public option of making Medicare available to everyone who wants it: how to pay for it. As conservatives, we fully support this idea, and hope that there are liberals who support it, as well.