Advocacy Group Report Sees Increase in Insurer Profit, Drop in Members
The five largest health insurers in the U.S. had combined profits of $12.2 billion in 2009, a 56% increase over 2008, despite 2.7 million fewer private plan beneficiaries than in 2008, according to a new report by Health Care for America Now, the Los Angeles Times reports.
The report examined company financial reports filed with the Securities and Exchange Commission for 2009 from insurers Aetna, Cigna, Humana, UnitedHealth Group and WellPoint.
It found that some of the insurers reduced the portion of premiums spent on beneficiaries' medical care and funded relatively more to salaries, administrative expenses and profit.
WellPoint's enrollment in private plans declined by 1.4 million, a 3.9% drop, while Cigna's private enrollment declined by 5.5%, or 639,000 U.S. residents.
According to the report, Aetna was the only insurer to experience a decrease in profit and gain new customers compared with 2008. Aetna gained 1.2 million customers in its private plans, an increase of 6.9% (Levey, Los Angeles Times, 2/11).
The report also found that the high cost of health insurance premiums is prompting U.S. residents to drop private plans. The report said, "The shedding of 2.7 million members from private health plans is part of the industry's long-term shifting of responsibility for the care of sick, older or lower-income customers to taxpayer-supported health insurance," such as Medicaid or Medicare (Norman, CQ HealthBeat, 2/11).
Insurance industry representatives criticized the report, noting that 2008 was a difficult year financially for various industries.
Robert Zirkelbach, spokesperson for America's Health Insurance Plans, said, "It is disingenuous to look at the profits at one company today compared to where it was in the depth of a recession."
Report Adds to Current Criticism of Insurance Industry
According to the Times, the report is feeding further criticism of the insurance industry, which already had been criticized for increasing profits while denying coverage to millions of U.S. residents.
Some lawmakers have pointed to the report as a reason to continue efforts to pass health reform legislation.Rep. Rosa DeLauro (D-Conn.) said the results of the report are "why we need health insurance reform today ... and why we are going to continue in the Congress to work on this until we see it through" (Los Angeles Times, 2/11). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.