The Health Insurance industry has concentrated and consolidated in recent years to form an oligopoly which is controlled by five giant corporations: UnitedHealth Group, Wellpoint, Aetna, CIGNA and Humana. Don't be fooled by the varioous names of companies purporting to sell health insurance which would indicate diversity in the market. UnitedHealth Group owns Oxford, PacifiCare, IBA, AmeriChoice, Evercare, Ovations, MAMSI and Ingenix, a healthcare data company. In 2007 their profits were $4.654 billion. Theses profits were largely made by denying people health care due to denial of enrollment due to preexisting conditions or rescission which is a process of canceling a client's health insurance once they file a really large claim by going back and finding some error in their application. In addition they deny procedures to people left and right on a routine basis without canceling their policies.
Wellpoint owns BLUES across the US, including Anthem Blue Cross Blue Shield, Blue Cross Blue Shield of Georgia, Blue Cross Blue Shield of Wisconsin, Empire HealthChoice Assurance, Healthy Alliance, and many others. The Blue Crosses and Blue Shields used to be non-profits but no more. They have been completely privatized. Their profits in 2007 were $3.345 billion. As for the other three, Aetna's profits were$ 1.831 billion; CIGNA's, $ 1.115 billion; and Humana's, $ 834 million.
According to the data, the five largest groups based on total revenue reported to the National Association of Insurance Commissioners (NAIC) and the California Department of Managed Health Care were WellPoint, Inc., the Kaiser Family Foundation, UnitedHealth Group, Health Care Services Corporation and Aetna. Among them, net premiums written grew an average of nearly 6 percent even as total members declined by almost 2 percent. Total revenue and net premiums written for the health industry as a whole grew 8.7 percent and 8.5 percent, respectively.
The five largest publicly traded groups by total revenue reported to the Securities and Exchange Commission — UnitedHealth Group, WellPoint, Inc., Aetna, Humana, Inc. and the CIGNA Corporation — saw an average total revenue increase of 9.4 percent in 2007.
Rounding out the top 10 of health care corporations are the following:
6. Health Net
7. Coventry Health Care
8. Amerigroup
9. Universal American
10. Centene
Here are the CEO compensations:
2007 Total CEO Compensation
- Aetna Ronald A. Williams: $23,045,834
- Cigna H. Edward Hanway: $25,839,777
- Coventry Dale B. Wolf : $14,869,823
- Health Net Jay M. Gellert: $3,686,230
- Humana Michael McCallister: $10,312,557
- U.Health Grp Stephen J. Hemsley: $13,164,529
- WellPoint Angela Braly (2007): $9,094,271
L. Glasscock (2006): $23,886,169
2008 Total CEO Compensation
- Aetna, Ronald A. Williams: $24,300,112
- Cigna, H. Edward Hanway: $12,236,740
- Coventry, Dale Wolf: $9,047,469
- Health Net, Jay Gellert: $4,425,355
- Humana, Michael McCallister: $4,764,309
- U. Health Group, Stephen J. Hemsley: $3,241,042
- Wellpoint, Angela Braly: $9,844,212
Former CEO of United Health Group, Bill McGuire walked away with a billion dollar compensation package. On October 15, 2006, it was announced that McGuire would step down immediately as chairman and director of UnitedHealth Group, and step down as CEO on December 1, 2006 due to his involvement in the employee stock options scandal. Simultaneously, it was announced that he would be replaced as CEO by Stephen Hemsley, who has served as President and COO and is a member of the board of directors. McGuire's exit compensation from UnitedHealth, wich was around $1.1 billion, was the largest golden parachute in the history of corporate America.
For more on Health Insurance Corporate salaries and compensation packages, click here. Health care bills are the largest single cause of bankruptcy in the US and most of these people have health insurance and think they are covered. When it comes time to use it, they find out they're really not or are covered inadequately. But since only a minority of American citizens come down with serious medical problems which require serious medical care and are very expensive, the majority of Americans go blithely on their way convinced they are adequately protected in case of an emergency. If they realized that their insurance company is in the business of maximizing their profits by finding ways to eliminate - rather than provide care for - really sick people, they might not sleep so well at night, and in fact might be clamoring for government protection under a public health care system that would not deny them treatment when they really needed it the most.
Wendell Potter is a former CEO of CIGNA. He has turned whistleblower because he could no longer live with himself and participate in a system that placed profits over human needs.
Wendell Potter can remember exactly when he took the first steps on his journey to becoming a whistleblower and turning against one of the most powerful industries in America.
It was July 2007 and Potter, a senior executive at giant US healthcare firm Cigna, was visiting relatives in the poverty-ridden mountain districts of northeast Tennessee. He saw an advert in a local paper for a touring free medical clinic at a fairground just across the state border in Wise County, Virginia.
Potter, who had worked at Cigna for 15 years, decided to check it out. What he saw appalled him. Hundreds of desperate people, most without any medical insurance, descended on the clinic from out of the hills. People queued in long lines to have the most basic medical procedures carried out free of charge. Some had driven more than 200 miles from Georgia. Many were treated in the open air. Potter took pictures of patients lying on trolleys on rain-soaked pavements.
For Potter it was a dreadful realisation that healthcare in America had failed millions of poor, sick people and that he, and the industry he worked for, did not care about the human cost of their relentless search for profits. "It was over-powering. It was just more than I could possibly have imagined could be happening in America," he told the Observer
Potter resigned shortly afterwards. Last month he testified in Congress, becoming one of the few industry executives to admit that what its critics say is true: healthcare insurance firms push up costs, buy politicians and refuse to pay out when many patients actually get sick. In chilling words he told a Senate committee: "I worked as a senior executive at health insurance companies and I saw how they confuse their customers and dump the sick: all so they can satisfy their Wall Street investors."
Health care reform is really all about diminishing the influence of the health insurance corporations which are driving up costs due to their relentless pursuit of profits. It is not about the government taking over health care; it is about the government regulating the health care industry mainly the insurance companies. With some luck the Democrats will pass a major health care reform bill which will be paid for, will bring costs down, will cover everyone adequately and will eliminate rescission and non-enrollment due to preexisting conditions. This may well sound the death knell for private insurance companies in the US because their profits are driven by denying sick people health care and by canceling policies of those who might cost them money. If these practices are outlawed, then private health insurance companies will lose most of their profit centers, and, consequently, their stock values will tank. Many will probably get out of the business. This might leave only the public option standing with health insurance companies in the business of selling supplementary insurance which adds an additional layer of protection and/or luxury to the health care process.
