Business Booming for Health Insurers
Sunday, March 06, 2011
While publicly bemoaning the passage of the federal healthcare reform law, the nation’s largest insurance companies enjoyed another profitable year in 2010.
Collectively, the five biggest health insurers—UnitedHealth Group, WellPoint, Aetna, Cigna and Humana—earned $11.7 billion in profits. This total represented a 17% increase over profits made in 2009.
Cutting down on individual health insurance plans and reducing healthcare coverage were two ways these companies reduced costs and boosted their profit margins, according to the consumer group, Health Care for America Now (HCAN). In net figures, between 2008 and 2010, the big five added 2,128,000 Medicare, Medicaid and military customers, while losing 3,519,000 with private health plans.
HCAN said the five insurers collected $7.7 billion more in premiums in 2010 than the year before, “but growth in spending on patient care lagged behind.” For example, the share of premiums that Aetna spent on medical care dropped from 83.9% to 80.1%—a savings of $709 million.
“Insurers have been free to spend as big a share of premium revenue as they please on bloated CEO pay, marketing, administration, lobbying and a care-denial bureaucracy,” HCAN said in a prepared statement.
HCAN Analysis Shows Health Insurers Pocketed Huge Profits in 2010 Despite Weak Economy (Health Care for America Now) (pdf)
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