11/23/2009 05:12 am ET Updated May 25, 2011

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 Many, sadly, have been denied insurance by private insurers or have had their policies rescinded.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