IN YOUR FACE says Health Insurance Industry

Health plans' huge earnings spark fallout from politicians
Insurers, however, plan to stick with their strategy of maximizing rates while minimizing costs

By Emily Berry, amednews staff. Posted Aug. 16, 2010.

Health insurance executives say that, despite political backlash toward their profits and pricing, they will continue to push medical spending lower and keep premiums at the greatest possible margin above costs.

The statements came as the seven largest publicly traded health insurers generally reported second-quarter profits above analysts' expectations.

The plans credited lower health spending, in large part due to money set aside for a flu epidemic that wasn't as bad as expected, and in part because even insured patients were spending less on health care. The plans also credited their own "pricing discipline" -- keeping premiums as high as possible, even at the risk of losing members and standing with politicians.
During a second-quarter earnings conference call between UnitedHealth Group executives and investment analysts, Citigroup's Carl McDonald asked if the company was bracing for more resistance to rate increases and "pricing to trend" -- setting premiums higher as medical costs rise, allowing for consistent or even growing profit margins.

Given the political environment and the company's historic profit margins, which he cited at 7%, McDonald wondered if UnitedHealth Group could keep up those price increases. United said, yes it can.

■Higher premiums, higher profits
■Coventry takes hit from class-action lawsuit
■See related content
"I think that you can still price to trend. I think that is the appropriate long-term positioning of the organization," CEO Stephen Hemsley said.

Five of the seven largest shareholder-owned health plans -- Aetna, Health Net, Humana, UnitedHealth Group and WellPoint -- reported profits in the second quarter of 2010 better than the same period in 2009.

But all seven companies raised their estimates of the total profit they will bring in for the full year.

Net income for the quarter ranged from $1 million for Coventry Health Care to $1.1 billion for UnitedHealth Group. Coventry was charged $278 million for a class-action lawsuit settlement regarding its workers' compensation business in Louisiana.

United's per-share profit of 99 cents was up 37% from the same quarter in 2009, but that wasn't even the largest increase among the biggest seven insurers. Aetna reported earnings of $491 million, or $1.14 per share, a 48% jump, Humana and WellPoint reported a 20% jump in per-share earnings compared with the second quarter of 2009. Coventry earnings would have been up without the settlement.

Cigna's health insurance business did better than expected, but the company saw earnings drop because of losses in nonhealth business.

5 of 7 largest shareholder-owned health plans reported higher 2nd quarter profits in 2010 than in 2009. Most of the big health plans lost members and brought in lower revenue than the prior year but were still able to make a profit because of lower medical spending. For several insurers, a milder-than-anticipated flu season made a critical difference to earnings, allowing them to count as revenue money that had been set aside, but not spent, for the influenza A(H1N1) pandemic. For some plans, such as WellPoint, that turned around what would have been a profit decline from the second quarter of 2009.

Insurers also credited their care management programs and continued economic pressure that appeared to keep members from spending on care.

However, the debate over rates and the potential for further backlash as new health system rules take shape tempered investors' response to health plan earnings.

U.S. Reps. Pete Stark (D, Calif.) and Jan Schakowsky (D, Ill.) released separate statements demanding that insurers lower premiums in light of recent rate increases. They are co-sponsors of legislation, introduced July 22, that would establish a public health insurance option to be included in health insurance exchanges created by health system reform.

Schakowsky said the "windfall" quarterly profits "are the umpteenth example of why this industry needs to be checked."

Coventry and Cigna were the only plans Stark didn't mention by name in multiple releases chiding health plans. He put out a release July 28 slamming WellPoint, Aetna and UnitedHealth Group, then followed up with statements on Humana's Aug. 2 earnings report and Health Net's Aug. 3 earnings report.

"Last week we found that WellPoint and Aetna were reaping hundreds of millions more in profits while spending hundreds of millions less on health care," Stark said in the Aug. 2 release.

"Today's report shows another insurer having a banner year. I await announcements by Humana and other insurers that they will be passing along these billions to consumers in the form of lower premiums."

That doesn't appear to be in the cards. Angela Braly, WellPoint's CEO, president and chair, said during her company's quarterly conference call that she's confident her company will be able to get future rate increases approved despite resistance in some states in 2009 and 2010 -- most famously, in California, where a proposed 39% maximum increase for individual plans was credited with relighting the fire to get health system reform passed.

"We expect that over time, appropriate rates will be granted in order to sustain this important market segment for the many Americans it will serve," Braly said. "This market is projected to expand by 16 million people during the next decade as a result of health care reform, and creating a fundamentally sustainable marketplace will be critical."

The American Medical Association was critical of health plans after the release of the earnings reports, citing numbers that show rate hikes outpacing health spending overall and physician services in particular.

"Huge premium hikes and windfall earnings from the health insurance industry are out of step with the latest figures showing the slowest rate of growth in U.S. health care spending in nearly 50 years," said AMA Immediate Past President J. James Rohack, MD. "Spending for physician and clinical services grew 5%, the slowest rate of growth since 1996.

"While insurers propose double-digit price increases, the latest figures show prices for physician services increased by only 2.7%. In fact, inflation adjusted physician fees decreased by 25% between 1996 and 2006. More oversight is needed to make certain that insurers are not funding their multibillion-dollar merger and acquisition strategies on the backs of patients, physicians and employers."

The print version of this content appeared in the Aug. 23 issue of American Medical News.

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ADDITIONAL INFORMATION:
Higher premiums, higher profits
Most of the seven largest shareholder-owned health plans took in higher profits in the second quarter of 2010 than the same period in 2009, despite declining membership and lower revenue. Lower medical spending and an unexpectedly mild flu season boosted earnings. Company executives do not plan to back off requests for higher premiums where they believe them to be necessary, however. Dollar figures on revenue and income are given in millions.

Revenue Net income Earnings per share
2Q09 2Q10 (change) 2Q09 2Q10 2Q09 2Q10 (change)
Aetna $8,671 $8,546 (-1%) $347 $491 $0.77 $1.14 (48%)

Cigna $4,488 $5,353 (19%) $435 $295 $1.58 $1.06 (-33%)

Coventry $3,537 $2,868 (-19%) $18 $1 $0.12 $0.01 (-92%)

Health Net$4,014 $3,442 (-14%) $40 $45 $0.38 $0.45 (18%)

Humana $7,899 $8,653 (10%) $282 $340 $1.67 $2.00 (20%)

United $21,655 $23,264 (7%) $859 $1,123 $0.73 $0.99 (37%)

WellPoint $15,413 $14,457(-6%) $694 $722 $1.43 $1.71 (20%)




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Coventry takes hit from class-action lawsuit
Coventry Health Care reported steeply rising operating profits for the second quarter of the year, but its earnings were cut to a penny per share due to a court decision in a class-action lawsuit brought by four Louisiana physicians, among others. The Louisiana 3rd Circuit Court of Appeals ordered the company to pay plaintiff health care professionals and hospitals $278 million, representing fines, plus interest.

"We are still working hard and pursuing all avenues of appeal for the Louisiana court decision, which we believe is not supported by either the law or the facts," Coventry CEO and Chair Allen Wise said during a second-quarter earnings conference call with investment analysts July 30.

In 2008, physicians, chiropractors and hospitals sued Coventry subsidiary First Health Group, which operates a workers' compensation rental preferred providers organization. Rental PPOs are referred to as "silent PPOs" in which employers or health plans pay for access to network discounts without clearly disclosing that they are doing so.

In the First Health Group case, defendants included some self-insured employers and some health plans that were accessing the First Health workers' compensation network. Louisiana workers' compensation care is supposed to be paid under a fee schedule set by the state.

The plaintiffs alleged that they were not properly notified that payers were accessing the First Health network discount rates rather than paying according to the state's fee schedule. Louisiana state law requires notification of rental network arrangements.

The case has been taken through state and federal courts, and the remaining disputes center on which is the proper venue and whether the state court's summary judgment should stand.

The Louisiana State Medical Society filed an amicus brief for the plaintiffs with the state Supreme Court on Aug. 2, asking it to reaffirm the lower court finding that payers in Louisiana are not allowed to access network discounts for workers' compensation cases and must pay according to the state's fee schedule.

While appeals work their way through the court system, however, Coventry must account for the settlement they have been ordered to pay. The company recorded the $278 million charge in their second-quarter earnings statements.

Here we go AGAIN

I couldn't resist posting this information regarding Blue Cross and Blue Shield "NOT FOR PROFIT" health insurance companies. This is my first post since March 23 when President Obama signed the health care reform bill.

BCBS Plans Increased $4.5 Billion Since 2001:

An analysis by Consumers Union found that non-profit
Blue Cross Blue Shield (BCBS) health plans have collected billions in
surplus over the past decade while raising health care premiums. The report
notes that BCBS plans in 10 states (Alabama, Arizona, Massachusetts,
Michigan, New York, North Carolina, Oregon, Pennsylvania, Tennessee, and
Wyoming) held a collective $9.1 billion in surplus funds in 2009, or $855
per-member per-year. In 2001, those plans held $4.6 billion collectively, or
$395 per-member per-year. The report offers policy recommendations to
control and reduce insurer surpluses, including advising states to implement
minimum and maximum surplus ranges and forcing insurers to spend excessive
funds on state-prescribed expenses (Kaiser Health News, 7/22).

Health Care NOW is the Law of the Land

While driving to work this morning I listened to the health care reform bill signing ceremony taking place in the East Room of the White House. I couldn't help but reflect back to last August when I decided to write this blog. Initially writing the blog was an outlet for my frustration in fighting with insurance companies on behalf of our practice and on behalf of patients requiring health care. Overtime, writing this blog became a forum of legitimate debate, expression of concern for the less fortunate people of the United States of America not having access to health care, and whether or not health care should be treated as a commodity like orange juice or building supplies.

I have been privileged to hear from many of you passionately expressing your views or participating in this debate. Because of this blog I have had several interactions with Senators Boxer and Feinstein, and Representatives Sherman,Waxman, and Pelosi from California. I have been very critical of President Obama and the above named legislators for their inaction and unwillingness to stop corporate america from profiteering off the sick and or injured. I have expressed criticism to all of them for allowing the insurance industry, the medical device industry, and the pharmaceutical industry to drive health care and for taking their campaign contributions. I have publicly stated my opinion that all of them were more concerned about their re-election than they were about providing real access to health care and fixing our broken health care system.

I have also been very critical of the Senate Bill which did NOT go far enough in ensuring access to quality health care. I felt and still believe that the only solution to our broken health care system is universal health care with options for additional coverage (hybrid system). I felt and still believe that aspiring medical students should be educated and trained by our government in exchange for a minimum six year commitment to public health service with reasonable salary after they complete their residency and or fellowship training. I felt and still believe that corporations should NOT be part of the basic health care equation.

Frankly, I do not like this bill because the true beneficiary of this law is the insurance industry who now has over 30 million new customers without significant limitations on pricing. Anthem Blue Cross generated a $4.7 billion profit in the last quarter of 2009. At the same time letters were sent to individual policy holders in California informing them of up to 39% increase in their insurance premiums. Two weeks ago, the Dept of Insurance in California announced their findings of an investigation that Anthem Blue Cross committed 700 insurance violations. Each violation carries a $10,000 fine. This fine will be paid for by policy holders and the constant denial or delay of claims. Blue Cross doesn't care if they violate the rules because they will never pay fines from their profits. In other words, the Health Care Reform Bill signed today by President Obama will not stop the insurance industry from delaying payment or denying claims, raising insurance premiums, violating claims rules, or passing costs from their own negligence onto policy holders and health care providers.

That being said, the law that President Obama signed today is historic in that access to quality health care will now be available to tens of millions of people, who without this law, would go untreated. The law also provides that insurance companies may not deny coverage for people with pre existing conditions and they may not terminate coverage for sick or injured policy holders. Children up to age 26 will be allowed coverage under their parents policy. These are all good things.

As with all health care plans, the young and healthy support the elderly and the ill. Mandatory insurance for all Americans will help cover the costs of pre existing conditions. It won't solve all the economic impact of the legislation, but it will help. Opposition to the bill continues to deny this fact. The fear mongering promulgated by the opposition is a cover for the attitude of caring only about oneself and the continued profiteering off of sick people. As the new law infiltrates our society, the fear will subside when people come to terms with the reality of how little they will be personally effected (unless they don't have health care coverage or earn over $250,000 each year). This bill is NOT socialism. This bill does not take away our personal freedoms. This bill only makes it possible for people to get health care.

I agree with the President that this is a beginning. Concerns such as tort reform, education and training of health care providers, limiting profiteering off the sick or injured by the insurance industry, pharmaceutical industry, and medical device industry, and eliminating waste in providing health care MUST be continuously evaluated. Access to health care and solutions to these concerns will go a long way in FIXING OUR BROKEN HEALTH CARE SYSTEM.

Since Health Care NOW is the law of the land, this will be my last post on HEALTH CARE NOW. It has been a privilege to share my thoughts, concerns, and hopes with you all. I wish you good health.

House Amends Health Care Now only hours after passage

March 21, 2010 — It seemed like an anticlimax to the history that had just been made on the floor of the House of Representatives, but it was an anticlimax that mattered a lot politically to healthcare reformers in Washington, DC.

At roughly 10:45 pm EST, the House approved a Senate bill in a 219 to 212 vote that overhauls the nation's health system and extends insurance coverage to millions more Americans. Less than an hour later, the House amended that measure in a 220 to 211 vote to incorporate key changes sought by its own leadership as well as President Barack Obama.

The revisions to the Senate legislation appear in a budget reconciliation bill that lawmakers use to change revenue and spending lines in the federal budget. Casting those changes in the form of a reconciliation bill is important to congressional Democrats, because such a bill cannot be filibustered in the Senate, where Democrats lack the 60 votes needed to override a filibuster. The Senate is expected to vote on the reconciliation bill later this week to wrap up months of congressional debate on transforming one sixth of the nation's economy.

The Senate healthcare reform legislation that the House passed and then amended would, among other things, require most Americans to obtain health insurance, help needy individuals and families buy coverage through government-operated insurance "exchanges," prevent private insurers from denying someone a policy based on preexisting conditions, and increase Medicaid enrollment by almost 50%.

Amendments Include Medicaid Pay Raise for Primary-Care Physicians

The amendments approved today do not alter the basic framework of the Senate healthcare reform bill, but they do introduce significant embellishments, some key to the measure's passage. The reconciliation bill would:

Add 16 million additional Americans to the Medicaid program compared with 15 million under the Senate plan, and raise Medicaid reimbursement rates to Medicare levels for general internists, family physicians, and pediatricians in 2013 and 2014.
Eliminate a special deal for Nebraska that would have exempted it from funding its share of an expanded state Medicaid program, and instead beef up federal Medicaid funding for all states.
Eventually close the "doughnut hole" in the Medicare Part D prescription drug plan, a coverage gap that forces Medicare recipients to bear the full cost of medications.
Make steeper cuts in payments to private Medicare Advantage plans.
Levy a 3.8% Medicare Part A (hospital insurance) tax on unearned income for individuals who earn more than $200,000 ($250,000 for married couples). This comes on top of a 0.9% increase in the Medicare Part A tax on earned income for these individuals and couples under the Senate bill.
Delay the effective date of an excise tax on high-cost insurance plans from 2013 to 2018, and increase dollar thresholds for insurance costs that are subject to the tax.
Offer more generous subsidies to individuals and families purchasing required insurance coverage.
When the reconciliation amendments are incorporated, the Senate bill translates into health insurance coverage for 32 million additional Americans over 10 years at a cost of $938 billion while reducing the federal deficit by $143 billion during that period, according to the Congressional Budget Office.

While the reconciliation bill must now receive Senate approval before the amendments take effect, the Senate bill itself — now approved by the House — will go to President Obama for his signature, according to a game plan for today's votes published on the Web site of House Majority Leader Steny Hoyer (D-MD).

[CLOSE WINDOW]
Authors and Disclosures
Journalist
Robert Lowes
Freelance writer, St. Louis, Missouri

Disclosure: Robert L. Lowes has disclosed no relevant financial relationships.

Congress Passes HEALTH CARE NOW

March 21, 2010 — The great healthcare reform battle of 2009 and 2010, for the most part, is over.

Congressional Democrats today finally passed their bill.

The only thing it needs now is the signature of President Barack Obama to become the law of the land.

In a 219 to 212 vote, the House today approved a bill enacted by the Senate last December that represents the most sweeping government initiative in healthcare since the creation of Medicare and Medicaid in 1965.

Most notably, the legislation will require most Americans to acquire health insurance, help cash-strapped individuals and families purchase it through government-operated insurance marketplaces called exchanges, increase Medicaid enrollment by almost 50%, and impose regulations on private insurers that would prevent them from denying someone coverage based on preexisting conditions.

After the historic vote, the House is expected to turn today to a budget reconciliation bill that would amend the now-approved Senate bill more to the House's and the president's liking. Taken together with this reconciliation bill, the Senate reform package would extend insurance coverage to 32 million more Americans over 10 years at a cost of $938 billion, although it would reduce the federal deficit during that period by $143 billion, according to the latest estimates of the Congressional Budget Office (a few days ago, the CBO had released slightly different dollar amounts).

If approved by the House, the budget reconciliation bill will go before the Senate, where Senate Majority Leader Harry Reid (D-NV) says he has the minimum 51 votes required to pass it. Reconciliation bills — which adjust revenue and spending lines in the federal budget — cannot be filibustered in the Senate. It takes 60 votes in the Senate to override the endless speeches and procedural motions that characterize a filibuster and force a vote on legislation. Republican Senators, who unanimously opposed the reform bill approved by their chamber last year, command 41 votes.

Today's House Vote Makes History in More Ways Than One

In addition to dramatically reshaping the American healthcare system — which accounts for one sixth of the nation's economy — the legislation passed by the House today was historic for other reasons. For the first time, the American Medical Association supported a plan for government-orchestrated healthcare reform after having denounced earlier proposals, including legislation creating Medicare and Medicaid, as dangerous experiments in "socialized medicine." Other major medical societies that backed today's bill were the American College of Physicians and the American Academy of Pediatrics.

The fear of federalization still resonated, though, among Republican politicians who formed a thick stone wall against the legislation. Their arguments against what they called a government takeover of medicine at times reached rhetorical fever pitches that will be remembered for years.

Sarah Palin, the former governor of Alaska and the Republican vice presidental candidate last year, warned that under the Democrats' reform plan, bureaucratic "death panels" would deny care to the disabled and elderly in the name of cost-saving. Even though the likes of the AARP called these claims unfounded, the debate about complex healthcare policy soon featured the catch-phrase "pulling the plug on granny."

At the same time, the new Tea Party movement entered the fray, holding rallies, flooding congressional townhall meetings, and wavings signs with messages such as "Save Granny. Defeat Obamacare" and "Get Government Out of Our Lives." Such protesters showed up today in force in Washington, DC, as the House casts its vote.

Fiery denunciations of reform legislation also resounded inside the Capitol building up until the time of the vote.

"My colleagues are celebrating the birth of a great new entitlement program," said Rep. Marsha Blackburn (R-TN). "Only they see dependency on the federal government and the death of freedom as a cause for celebration. Freedom dies a little bit today."

Last-Minute Promise of Executive Order Against Abortion Funding Secured Key Votes

One obstacle to House Democrats rounding up enough votes for victory was the issue of federal funding of abortions in an overhauled healthcare system.

When House Democrats crafted and passed their own reform bill last year, they included language that would prohibit any woman receiving an insurance premium subsidy from purchasing a health plan that covered an abortion other than a federally sanctioned one to save the life of the woman or in cases of rape and incest. The Senate bill contains a complicated anti-abortion restriction that resembles the House version in intent, but Democratic reform advocates in the House like Rep. Bart Stupak (D-MI) who are also abortion opponents said the Senate language was not strong enough for them to support the bill in good conscience.

Earlier today, President Obama convinced Rep. Stupak and his coalition of like-minded Democrats to change their votes to "Yea" by promising to issue an executive order that would ensure no abortions would be federally funded under the reform bill before the House on Sunday. President Obama released the text of the order and said he would sign it as soon as the House passed the bill.

It was good enough for Rep. Stupak.

"We've been able to come to an agreement to protect the sanctity of life in healthcare reform," Rep. Stupak said Sunday.

Two Medical Societies Applaud Reform Bill, But Say More Legislative Work Remains

In a press release issued tonight, American Medical Association President J. James Rohack, MD, said that by extending health insurance to millions more Americans, the bill passed by the House "will help patients and the physicians who care for them."

"Every day physicians see the devastating effect being uninsured has on the health of our patients," Dr. Rohack said. "Physicians dedicate their lives to helping patients, and we have an historic opportunity now to do just that."

Similarly, Lori Heim, MD, the president of the American Academy of Family Physicians, hailed the bill's passage in a written statement. "As a result of today's vote, Americans can look forward to health security because they soon will have the chance to buy health insurance that meets their needs without emptying their bank accounts," Dr. Heim stated.

Both Dr. Heim and Dr. Rohack said that their societies will continue to work with Congress on what they see as the unfinished business of healthcare reform, particularly medical liability reform and a permanent solution to the problematic formula for setting Medicare reimbursement for physicians, which calls for a 21.2% pay cut this year.

[CLOSE WINDOW]
Authors and Disclosures
Journalist
Robert Lowes
Freelance writer, St. Louis, Missouri

Disclosure: Robert L. Lowes has disclosed no relevant financial relationships.

House votes to repeal anti trust exemption for insurance companies

February 24, 2010 — In a rare display of bipartisan unity, the US House of
Representatives this afternoon passed, by a lopsided vote of 406 to 19,
legislation that would end health insurance companies' 65-year exemption
from a variety of federal antitrust rules.

Supporters of the bill — the Health Insurance Industry Fair Competition Act,
which would repeal portions of the McCarran-Ferguson Act, passed in 1945 —
argue that it will restore competition to the health insurance market, which
surveys have shown has become increasingly dominated in many areas by 1 or 2
insurers.

"It's time for Washington to decide whether we stand with patients or
profiteering, whether we believe in market competition or a collusion
between politicians and insurance companies," said freshman bill cosponsor
Rep. Tom Perriello (D-VA) in the run-up to the vote.

But skeptics, many in the GOP, charge that the repeal will have a negligible
effect on premiums and that it will do little to address the consolidation
issue — in fact, the Federal Trade Commission and the Department of Justice
already have the authority to examine the antitrust implications of health
insurer mergers and acquisitions.

Citing the Congressional Budget Office, which predicted a small effect on
premiums because states already had laws on their books that outlaw
practices that would be prohibited under the bill, including bid rigging and
price fixing, Rep. Lamar Smith (R-TX) argued during floor debate that "some
may wish upon a star, but this bill is a dim bulb."

Still, dim bulb or not, most House Republicans were not inclined to buck the
popular backlash against insurance companies and vote against the bill.
Some Republicans who ended up voting for the bill nevertheless argued during
the procedural portion of the debate for its amendment. Among other things,
they argued for an amendment that would permit insurance companies to share
historical loss data and actuarial services — a provision, they said, that
would be especially beneficial to smaller insurance companies. The
resolution barring amendments prevailed, however, and Republicans such as
Rep. Dan Lungren of California used a portion of their floor time to argue
for what they say would be more effective cost-control legislation — medical
malpractice reform.

The bill will not affect property and casualty insurers, including medical
malpractice carriers, which will maintain their antitrust exemptions.
Action now moves to the Senate, where the measure may need a supermajority
of at least 60 votes to move forward.

Back by popular demand. First Blog post August 8, 2009

President Obama called for a bipartisan health care summit that begins tomorrow, February 25, 2010. I have heard from several readers of this blog to re-post my first entry. Enjoy AGAIN

Saturday, August 8, 2009
Welcome to Health Care Now. This Blog is dedicated to fixing a very broken health care system in the USA.

There can be no real health care reform without insurance and pharmaceutical industry reform. Health Insurance and Pharmaceutical Companies DO NOT PROVIDE HEALTH CARE. These companies are in busines to make money for their shaeholders and executives. Check this out!


UnitedHealth CEO
Stephen J. Hemsley
2007 Compensation
$13.2 million
2008 Compensation (Forbes)
$3,241,042
Former Managing Partner and CFO of Arthur Andersen (BusinessWeek)
Total Value of Unexercised Stock Options (Forbes)
$744,232,068
2009 Options Exercise
$127,001,281
Value of Wayzata, Minnesota Home (Hennepin County Assessor)
$6,640,000
Articles:
Hemsley returns $190 million in stock options acquired as a result of practices found to be fraudulent by the SEC (American Medical News)

CIGNA CEO
Edward Hanway
Five-Year Compensation, as of April 30, 2008 (Forbes)
$120.51 million
Total Value of Unexercised Stock Options (Forbes)
$28,881,000
Value of New Jersey Beach Home (Cape May County Assessor)
$13,607,400
Articles:
The family of a 17-year-old girl who died hours after CIGNA reversed a decision and said it would pay for a liver transplant plans to sue the company, their attorney said Friday.
Hundreds of entertainment industry workers in California and New Jersey who buy health insurance as a group are being hit with a rate increase that will raise some family-plan premiums to more than $44,000 a year.

Humana CEO
Michael McCallister
2007 Compensation
$10.3 million
2008 Compensation (Forbes)
$1,017,308
Five-Year Compensation Total (Forbes)
$15.1 million
Total Value of Unexercised Stock Options (Forbes)
$60,865,194
2006 Options Exercise (SECForm4)
$22,294,710
Value of Park City, Utah Home (County Assessor)
$6,978,380
Articles:
Humana abandons senior citizens in Florida, returns after Republicans pass new Medicare law, upping HMO payments by ~ 25% (NY Times)

Aetna CEO
Ronald A. Williams
2007 Compensation
$23 million
2008 Compensation (Forbes)
$24,300,112
Total Value of Unexercised Options (Forbes)
$194,496,797
Williams is in the top ten of Forbes'"$100 Million CEO Club."
Articles:
Health insurance giants Aetna and CIGNA, along with others, became the latest targets of a wide-ranging probe launched by New York Attorney General Eliot Spitzer, according to USA Today. (source)

Coventry CEO
Allen Wise
CEO from 1996-2004, and from January 2009-Present
2004 Compensation (Forbes)
$13,052,799
2006 Sale of Stock
$14,458,251
2006 Options Exercised
$2,895,000
2005 Sale of Stock
$46,410,695
2005 Options Exercised
$6,709,564
2004 Sale of Stock
$12,826,756
2004 Options Exercised
$4,798,000
Value of Hilton Head, SC Home (Beaufort County Assessor)
$3,275,500

WellPoint CEO
Angela Braly
2007 Compensation (secinfo)
$9,094,271
2008 Compensation (Forbes)
$9,844,212
2006 Sale of Stock (SECForm4)
$4,858,585
2006 Options Excerise (SECForm4)
$4,566,124
Value of Indianapolis Home
$1,987,700

This is just a handful of health insurance executives. None of these people have ever diagnosed or treated any patient in their executive capacity. In fact, they participate in developing company policy that limits health care to their policy holders and in many cases deny health care to their policy holders. Withholding funding for health care is how these obscene salaries are paid.

Remove health insurance companies from the equation and all this money could actually be used to provide health care for those in need.
Posted by Doc at 5:41 AM

Anthem Blue Cross BUSTED in California

Insurance Commissioner Poizner Announces Hundreds of Legal Violations During an Investigation of Anthem Blue Cross' Practices

Insurer Faces Multimillion Dollar Fine After Review Finds 700 Plus Claims Handling Violations

California Insurance Commissioner Steve Poizner today announced that an investigation of consumer complaints filed against Anthem Blue Cross' claims handling practices has uncovered more than 700 violations of state law.

"When consumers pay their premiums every month, they expect insurance companies to uphold their part of bargain and pay claims quickly, correctly and comply with all other legal requirements," Commissioner Poizner said. "Our investigation has revealed more than 700 instances where Anthem Blue Cross has violated the state's claims handling laws. From a failure to respond when the Department of Insurance requested information to investigate complaints to misrepresenting the facts to consumers, these are serious violations and if they are proven in the enforcement action, Anthem Blue Cross will be held liable for them."

The California Department of Insurance (CDI) investigated consumer complaints filed against Anthem Blue Cross' claims handling practices in 2006 through 2009. This review found more than 700 violations of the law. The maximum penalty for each violation is $10,000, if the action was found to be willful.

Specifically, the market conduct exams found the following violations of law:

Type of Violation
Quantity

Failure to pay claims in 30 days 277 violations
Failure to respond to the CDI in reasonable time so we can investigate complaints 143 violations
Misrepresenting facts or policy provisions to insureds 66 violations
Failure to pay Interest on unreimbursed claims 25 violations
Failure to pay or contest a claim within 30 days 21 violations
Unreasonably low settlement offers 22 violations
Miscellaneous delays and other claims handling violations 178 violations



The official Accusation and Order to Show Cause will be filed with the Office of Administrative Hearing later today. When it is filed, it will be posted on the CDI Web site.

During the last three years, CDI has finished 10 market conduct exams of the top health insurers. Six exams were completed and four are in progress. So far, three of the six completed exams have resulted in enforcement actions and led to groundbreaking agreements with insurers that helped 4,000 consumers regain access to insurance after their coverage was improperly rescinded. They also led to the following actions:

· Anthem Blue Cross: $1 million fine, offer of new insurance for those who had their insurance policies rescinded, reimburse consumers for out-of-pocket expenses and take corrective action

· Blue Shield: Offer of new insurance for those who had their insurance policies rescinded, reimburse consumers for out-of-pocket expenses and take corrective action.

· Health Net: $3.6 million fine, $7.2 million in waived insurance premiums, offer of new insurance for those who had their insurance policies rescinded, reimburse consumers for out-of-pocket expenses and take corrective action.

FINALLY SOME LEADERSHIP

Obama backs repeal of insurer antitrust exemption

By Patricia Zengerle Patricia Zengerle
WASHINGTON (Reuters) – The Obama administration on Tuesday threw its weight behind a bid to repeal an anti-trust exemption protecting health insurers, keeping the industry in its crosshairs as it prepares to host a bipartisan summit on revamping healthcare.

"Today the president announced the administration's strong support for repealing the anti-trust exemption currently enjoyed by health insurers," White House spokesman Robert Gibbs said at a daily news briefing.

On Thursday, President Barack Obama will host a healthcare summit, the latest step in his uphill battle to break an impasse in Congress over a sweeping overhaul of the $2.5 trillion industry, one of Obama's domestic policy priorities.

"At its core, health reform is all about ensuring that American families and businesses have more choices, benefit from more competition and have greater control over their own healthcare. Repealing this exemption is an important part of that effort," Gibbs said.

Health insurers for about 65 years have been exempt from federal antitrust laws, which are designed to protect consumers from price fixing and other anti-competitive acts.

The insurance industry said the exemption is narrow in scope and warranted and that its repeal would not lower health care costs.

"Health insurance is one of the most regulated industries in America at both the federal and the state levels," said Karen Ignani, president and chief executive of the industry trade group America's Health Insurance Plans.

"The real focus should be on addressing the rising cost of medical care, which is putting an unsustainable burden on families, employers, and the federal budget," she said.

Gibbs said he expected the House of Representatives to vote on legislation to revoke the exemption over the next few days. Obama's support was transmitted to Congress as a statement of administration policy.

INSURANCE INDUSTRY IN THE CROSSHAIRS

The Obama administration has stepped up its rhetorical attacks on health insurers as it fights to push through the healthcare overhaul. New regulation of health insurers was a key part of the overhaul plan Obama announced on Monday, and administration officials have pointed repeatedly to a premium increases of up to 39 percent set by WellPoint Inc.'s Anthem Blue Cross unit in California as evidence of the need for a healthcare overhaul.

A number of House Democrats have said repealing the antitrust exemption is a high priority.

"We want to open up competition. This bill is about making sure that anyone in America who wants to offer health insurance will do so in a free and open market," House Democratic Leader Steny Hoyer said.

"I surely hope it will pass with a significant bipartisan vote."

Democrats said revoking the exemption would prevent health insurance price-fixing or other anti-competitive practices, but did not offer evidence of any. The industry said state laws already forbid such practices.

The American Medical Association released a study on Tuesday showing that many U.S. insurance markets are dominated by just one or two insurance companies. In 24 of the 43 states covered in the report, the two largest insurers had a combined market share of 70 percent or more, up from 18 of 42 states in last year's report.

The House version of the healthcare revamp bills that have stalled in Congress included a repeal of the exemption. The Senate version did not. Obama's proposal in general more closely resembled the Senate plan, and did not address the antitrust exemption.

A number of consumer groups support repeal, saying states often lack the resources to effectively regulate insurers.

Unhappy with Insurance Companies? Only in America

Sebelius Unveils New Report on Requested Premium Increases in States Across
the Country
Report Highlights Requested Rate Hikes in Connecticut, Maine, Michigan,
Oregon, Rhode Island, Washington

U.S. Department of Health and Human Services (HHS) Secretary Kathleen

Sebelius today unveiled a new report, Insurance Companies Prosper, Families
Suffer: Our Broken Health Insurance System. The report highlights health
insurance premium increases in states across the country and comes shortly
after Anthem Blue Cross announced plans to raise rates on its California
customers by as much as 39 percent, even after its parent company took in a
profit of $2.7 billion in the previous quarter. The complete report is
available at www.HealthReform.gov .
“Over the last year, America’s largest insurance companies have requested
premium increases of 56 percent in Michigan, 24 percent in Connecticut, 23
percent in Maine, 20 percent in Oregon, and 16 percent in Rhode Island, to
name just a few states,” said Sebelius. “Premium increases have left
thousands of families that are already struggling during the economic
downturn with an unpleasant choice between fewer benefits, higher premiums,
or having no insurance at all. Hard-working families deserve better.”
The report examines requested insurance premium increases and notes:
* Anthem of Connecticut requested an increase of 24 percent last year,
which was rejected by the state.
* Anthem in Maine had an 18.5 percent premium increase rejected by the
state last year as being “excessive and unfairly discriminatory” – but is
now requesting a 23 percent increase this year.
* In 2009 Blue Cross Blue Shield of Michigan requested approval for
premium increases of 56 percent for plans sold on the individual market.
* Regency Blue Cross Blue Shield of Oregon requested a 20 percent
premium increase.
* UnitedHealth, Tufts and Blue Cross requested 13 to 16 percent rate
increases in Rhode Island.
* Rates for some individual health plans in Washington increased by up
to 40 percent until Washington State imposed stiffer premium regulations.
Health insurance reform will fix our insurance system, help drive down
costs, put consumer power and choice in the hands of the American people,
and ensure all Americans receive the health care services they need. Reform
will:
* Place additional oversight on health insurance companies to ensure
that people get value for the premiums they pay. Insurance companies will
have to report how they spend the premium dollars that they collect from
their customers. If they spend too much on administrative costs and profits,
they will have to give some of that money back to their customers. Insurance
companies will also have to provide public justification for premium
increases. Consumers can use this information to help decide whether they
want to purchase a particular plan. And if insurance companies are not able
to justify their premium increases, they could be barred from participating
in the health insurance exchanges.
* End Arbitrary Limits Placed on Coverage by Insurance Companies.
Under health insurance reform, families will no longer face lifetime limits
to their benefits, nor will coverage be denied or watered down based on
medical history. As a result, health insurance will provide real protection
from high health care costs.
* End Insurance Company Discrimination. Health insurance reform will
prevent any insurance company from denying coverage based on underlying
health status, including genetic information. It will end insurance
discrimination that charges families more if a family member has or had any
illness, and limit differences in premiums based on age.
* Create Competition Among Insurers with a Health Insurance Exchange.
Health insurance reform creates an “exchange” or marketplace for insurance
competition that will drive down premium prices for Americans. The health
insurance exchange will bring families and plans together into one organized
marketplace so families can compare prices and health plans in order to
decide which quality, affordable option is right for them. Health insurance
reform will guarantee every American a choice of health coverage, even if
someone loses a job, switches jobs, moves, or gets sick.
* Ensure Value in Our Health Care System. By rewarding high-quality
and efficient care, encouraging care coordination, and reducing medical
errors, health reform will slow the growth in health care costs and ensure
value for every health care dollar spent.
* Lower Premiums. The Congressional Budget Office estimates that
reform will streamline administrative costs of insurance companies and bring
more people into the insurance market, lowering premiums of a comparable
plan in the individual market by 14 to 20 percent. That means more money in
the pockets of American families, and the security of having high-quality
coverage.
“Premium hikes in California and across the country are a wakeup call,”
added Sebelius. “It’s time for Congress to pass reform and hand control over
health care decisions back to American families and their doctors.”

$4 Billion Quarterly Profit NOT GOOD ENOUGH FOR BLUE CROSS

I have not posted in two weeks because I have not fully recovered from reading that Blue Cross generated a fourth quarter FOUR BILLION PROFIT while sending out notices to California individual policy holders that their premiums would be increased up to 39%. I received a message this morning from a follower of this Blog asking why I haven't posted recently. I'm still trying to pull the Blue Cross sword out of my .........

NEW YORK TIMES Editorial
The Lesson of Anthem Blue Cross
Published: February 18, 2010

Clients were understandably furious when Anthem Blue Cross, the largest for-profit health insurer in California, announced huge rate increases for people who buy their own insurance: an average increase of 25 percent, and a 35 percent to 39 percent rise for a quarter of the purchasers. The move also provided a textbook example of why the nation badly needs comprehensive health care reforms.

The reform bills stalled in Congress would put a brake on such out-of-scale premium increases by broadening the pools of insured people to keep average premiums low, by setting up competitive insurance exchanges and by starting to rein in the cost of medical care that is driving up premiums everywhere.
Private insurers in several other states also have sought and won double-digit increases for policies sold to individuals. In one striking case, a Blue Cross Blue Shield plan in Michigan sought a 56 percent average increase in premiums for individually bought policies but settled for 22 percent in a compromise with regulators.

If the increases go through in California, where regulators have limited powers to control rates, Anthem’s enrollees would have to choose between paying the higher price, moving to lower-cost policies, perhaps with a high deductible, switching to another insurer if they can find one to take them, or dropping coverage entirely.

The nation’s largest health insurers reported substantial profits last year over all, but Anthem claims it lost money on the individual market in California. Its parent company, WellPoint Inc., attributed the need for the huge rate increase to a changing mix of customers as the recession forces many people to cut back on expenses.

The company says that healthier customers, gambling that they won’t need much care, are disproportionately dropping Anthem coverage or choosing not to enroll. The less healthy are staying with Anthem, where their higher medical costs are driving up premiums.

WellPoint will be asked to justify the increases at hearings in Congress and the State Legislature. California’s insurance commissioner is investigating whether Anthem will be meeting regulations to spend at least 70 percent of its premium revenues on claims.

It’s hard to know which conclusion would be worse: that Anthem is trying to fleece its individual customers or that Anthem’s rates are actuarially justified by its increasingly unhealthy enrollment pool.

The salient point is that the reform bills pending in Congress could almost certainly prevent this problem from developing. The bills would require everyone to buy health insurance (many with government subsidies). That would create large pools to spread the risk over both healthy and sick enrollees and keep average premiums low. On new insurance exchanges, people who buy their own insurance could benefit from group purchasing power and could choose from an array of policies. Competition among insurers on the exchanges is expected to help keep premiums down.

How about the Republicans’ health care proposals?

They would only address a small part of the Anthem problem. The Republicans reject the idea of mandates to spread the cost of care and instead call for ways for people dissatisfied with their insurer to buy cheaper coverage elsewhere. That could help relatively healthy people but would do nothing for the chronically ill or anyone with pre-existing conditions. They would be stuck in their health plans. State high-risk pools for sick people, another Republican solution, almost always have high premiums and would not provide a safe haven from rate increases in private plans.

Unless Congress passes comprehensive reform, we should expect many more Anthems in our future.

NOT DEAD YET

The California Senate passed a bill to create a single-payor health system, less than a week after a special election in Massachusetts cost Senate Democrats' the 60-vote majority they needed to pass federal health reform legislation.

Although Gov. Arnold Schwarzenegger has promised to veto the California bill, it could signal a change in the health reform debate, as proponents of health reform get frustrated with the national stage and move efforts to the states.

What happens to proposal now? The California Senate passed the bill by 22-14, with all but one Democrat and no Republicans voting for it. It now goes to the state Assembly, which has passed previous California single-payor bills, then to Gov. Schwarzenegger, who vetoed the previous bills. If passed, the bill would authorize $1million to establish a commission to decide how to pay for the system.

How does this relate to national health reform? Democratic State Sen. Mark Leno, the author of the bill, said voters came to dislike Congress' compromise health reform legislation. "Whatever comes out of Washington is much less certain, which only gives greater incentive for leadership coming from state legislators because somehow, some way, health care reform must be addressed," Mr. Leno told the Huffington Post.

What do Californians think? Mr. Leno points to past polls that have shown support for a state-run plan. A new poll by the Public Policy Institute of California finds that 74 percent of Californians believe the state is headed in the wrong direction. This could be interpreted as a call for radical change or anger at current legislators, the people who passed this bill.

What do opponents think? "What a bizarre place I work in," wrote Republican State Sen. Sam Aanestad, an oral surgeon, in the New American. Following the Massachusetts defeat, "Democrats who control the State Legislature in California revived their own universal healthcare bill. Didn't they get the message I did?"

How might other states react? With the prospect of the Congress' health reform bill failing, the health reform debate may now move to the states. Massachusetts has already enacted universal healthcare. Illinois, Oregon and Massachusetts have flirted with single-payor systems in state legislation and referendums, but all have failed so far.

Could it have a polarizing effect? There already is a wide gap between passionate proponents of a single-payor system, such as Physicians for a National Health Program, and opponents of government intervention in healthcare. Positions could harden if the federal health reform bill, which was supposed to bridge the divide, is not passed.

What exactly is a single-payor system? It involves creating a government-run or financed plan open to everyone. It may or may not be linked with elimination of private insurance and government-run health facilities. Canada and several European nations have various kinds of single-payor systems.

How would it affect physicians and hospitals? "I cannot support an under-funded program that would leave patients with far fewer options for care than they have today," Dr. Aanestad stated. The concerns are that a single-payor system could drive reimbursements down to Medicare levels and lead to waiting lines for certain services, as occurs in the Canadian system. Some U.S. physicians are already bailing out of Medicare, the U.S. single-payor system for the elderly, because it pays too little. But others argue that a single payor would be a boon for healthcare, providing a massive infusion of new paying patients and improving health status by detecting diseases earlier.

Could it reduce insurance premiums? Paul Krugman, a New York Times columnist who supports a single-payor system, has argued the arrangement could curb premium growth by eliminating the costs of insurer-middlemen and by extending coverage to healthy people who are less costly to the system.

Would it add to California's budget deficit? The state faces a $20 billion deficit. The California Legislative Analysts Office said the single-payer proposal would cost $200 billion, or more than $5,000 in new taxes for every Californian. But Sen. Leno argued that Californians already pay $200 billion for their healthcare through premiums and other funding. He said the system could be funded through a payroll tax, existing state and federal funding and increased efficiencies by eliminating the insurer-middleman.

Possible removal of anti trust exemption for insurance industry

Last night before President Obama's State of the Union Address, I heard a newscaster say that the Speaker of the House was considering giving up the massive health care reform bill in favor of pursuing passage of small, separate pieces of the larger reform agenda. As an example, she pointed to the anti trust exemption enjoyed by the insurance industry for several decades.

If this is accurate information, WE THE PEOPLE will be the beneficiaries. This small reform item is very large in the overall "big picture" because insurance companies will no longer be able to fix prices (both insurance policies and reimbursement to providers) and will have to act independently. This will lead to competition amongst the insurance companies for policy holders and provider contractors resulting in driving prices down while increasing access to more providers since the health insurance companies will no longer desire to exclude providers from their networks.

Contact your Senators and Representatives and let them know you want the anti trust exemption that protects the insurance industry REMOVED. We all can help accomplish Health Care Now by letting our elected officials know how we feel about the unfair advantage insurance companies have in the market place, and their abusive tactics towards policy holders and providers.

US Supreme Court legalizes prostitution.

The US Supreme Court has validated what I have been screaming about in this blog since August. The court's decision this morning allows unlimited corporation campaign contributions. The worst part is WE THE PEOPLE ARE PAYING FOR IT. Every time you pick up a prescription, every time you make a bank deposit, every time you put gas in your car or heat your home, every time you eat a piece of meat or drink a glass of milk, every time you make an insurance premium payment, you are paying for lobbyists to keep corporate america powerful and protected by the US Government.

Every legislator and elected executive at every level receives campaign contributions from corporations. After today's Supreme Court decision, politicians can receive unlimited funds from the highest bidder. Prostitution is now overtly LEGAL. Our purchases add to the corpus of $$$ available to buy politicians. It has come to a point that the only solution may be revolution.

We are engaged in two wars. Our our economy is NOT improving. The jobless rate continues to increase. The homeless rate continues to increase. Financial assistance to people suffering from international disasters (earthquakes) gets priority over help for our own homeless and jobless. NO HEALTHCARE REFORM. Insurance industry protected by anti trust exemption. Gutless Presidential leadership and worthless congressional leadership. And today the US Supreme Court decision to allow corporations to buy our politicians with unlimited campaign contributions. I doubt very seriously that our founding fathers had unlimited campaign contributions in mind when constructing our Constitution.

South of France is looking very good these days.

Real Health Care Reform NO longer possible

Neither the House or Senate bill provide REAL reform. Real reform would
require:

1) removal of the anti trust exemption for insurance companies

2) limits on policy pricing in exchange for up to 45,000,000 new customers

3) No refusal of insurance for pre existing conditions

4) No cancellation of policies when a policy holder contracts a
catastrophic illness

5) A public option to ensure competition that will drive health care
costs DOWN

Pretty simple and doesn't require 2000 pages of unnecessary language!

I was a staunch supporter of Obama and health care reform until Obama showed he has no balls and the congress showed they are worthless. I hope they all get replaced in their next election. Obama is the biggest political disappointment since I started to vote over 42 years ago.

Democrats Negotiate Healthcare Legislation, Plan to Submit for Cost Estimate Early Next Week

Written by Lindsey Dunn | January 14, 2010

More Key Congressional Democrats, along with Pres. Obama, held a nearly day-long session yesterday to negotiate a joint healthcare reform legislation package with the aim of submitting a final plan to the Congressional Budget Office early next week. Negotiations are expected to continue today.

In a joint statement, Pres. Obama, House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.) said the group had made "significant progress in bridging the remaining gaps between the two health insurance reform bills."

Key issues within the plan that continue to require debate, as outlined by the Washington Post and the Wall Street Journal include:

Value of subsidies provided to low-to-middle-income Americans to obtain coverage (Both the House and Senate bills contain provisions that would provide subsidies to Americans with incomes up to 400 percent of the federal poverty level, but the value of such subsidies is unclear);
Insurance plan value with which to begin "Cadillac" tax on high-cost health plans (The House bill would begin taxing on plans that are valued at or above $23,000 for a family, though the Washington Post report this may be increased to $25,000 after negotiations);
Structure of a mandate that would require employers to offer insurance coverage to employees (House bill currently requires employers with payrolls greater than $500,000to offer coverage, while the Senate bill would impose a penalty on employers with more than 50 employees that do not offer coverage);
Whether an insurance exchange would be run by states or the federal government (Both the House and Senate bills would offer exchanges for Americans that do not qualify for coverage through an employer or a public program); and
Overall funding for the bill (Both House and Senate bills offer slightly differing proposals for funding, including taxes on high-income Americans, taxes on high-cost health plans, taxes on medical devices, reductions in Medicare expenditure growth and annual fees for health insurance companies).
Although the kinks are still being worked out, current estimates place the cost of the legislation, which would extend healthcare coverage to 36 million Americans at approximately $900 billion.

CBO analysis is expected to take at least a week, making it unlikely that the bill would be pushed through both the House and Senate and on to Pres. Obama before his State of the Union address planned for early February, according to the Washington Post.

Republicans vow they will continue work to block the legislation. House Minority Leader Johan Boehner (R-Ohio) told fellow Republicans that they could still "beat the bill," according to the Washington Post.

Read the Washington Post's report on healthcare reform legislation.

Read the Wall Street Journal's report on healthcare reform legislation.