Health Insurance Companies Are Dramatically Increasing Premiums Due To The New Health Care Law

And There Is Not Much We Can Do About It
Published on 08-20-2010
By Michael Snyder - BLN Contributing Writer

Wasn't the new health care reform law supposed to make health care more affordable for everyone? Well, imagine my surprise when I opened up a letter from my health insurance company recently and found out that my health insurance premiums were going up by nearly 50 percent. I am in perfect health and I have never had a single health insurance claim with this company. Unfortunately, after doing a little research, I discovered that I am far from alone. All over the United States, people are being hit with double-digit percentage increases in their health insurance premiums even as the health insurance predators continue to rake in record profits. At a time when millions of American families are barely making it from month to month, the last thing they need is to be figuratively kicked in the groin by the health insurance companies. But that is exactly what is happening.

Not that health insurance companies ever needed an excuse to raise rates, but in 2010 many of them are blaming changes in health care law for the dramatic rise in premiums.

Of course it is true that there are over a dozen new taxes on the health care industry in the "health care reform" law that Barack Obama and the Democrats rammed down the throats of the American people, and everyone should have realized that those taxes would ultimately be passed on to the consumer.

But what is also true is that the health insurance companies basically wrote large sections of the health care reform law and health insurance company stocks rose when this new law was passed.

So why is this new law so good for health insurance companies?

Well, the new health care law requires all of us to purchase health insurance from them.

We are no longer going to have the choice of opting out of their system.

We are going to be forced to buy health insurance.

And since they are all raising rates, there is no escape from the pillaging.

As the new health care bill was being debated, Obama promised that the average American family would save $2,500 in yearly premiums under the new law.

If any of you still believe that claim I have got a bridge to sell you.

The Congressional Budget office says that yearly health insurance premiums are actually going to increase by about $2,300 each year as a result of the new law, but that estimate is probably far, far too low.

The truth is that rates are already shooting through the roof. Just consider the following excerpt from a recent article on Fox News....

Here is the terse reason CareFirst/Blue Cross/Blue Shield of Washington gave its subscribers for raising a monthly premium from $333 to $512 on a middle aged man who is healthy, is not a smoker and is not obese: "Your new rate reflects the overall rise in health care costs and we regret having to pass these additional costs on to you."

Could you afford to pay $512 a month for health insurance just for yourself?

Unfortunately, the truth is that this is nothing new. Many health insurance companies have been increasing health insurance premiums by double-digit percentages year after year after year even as they continue to reel in record profits.

In particular, health insurance companies seem to love to stick it to small businesses and the self-employed.

According to an article on the Mother Jones website, health insurance premiums for small employers increased 180% between 1999 and 2009.

The greed of the health insurance companies seems to know no bounds. For example, the 39% hike that Anthem Blue Cross sent some California customers last year made headlines across the nation. But executives defended the dramatic premium hikes as perfectly justifiable.

The reality is that health insurance is becoming so insanely expensive that millions of Americans can't even afford it anymore.

But thanks to the new health care law they are being forced to keep shelling out their hard-earned money for it.

It is getting really hard for anyone to deny that the health care system in the United States is deeply, deeply broken. The new health care law is not going to reduce costs. It is only going to help the health insurance companies continue to rake in obscene profits.

But wasn't the new health care law supposed to prevent the health insurance companies from abusing all of us?

Well, as it turns out, the new health care law does not give the federal government much regulatory power at all to prevent premium increases.

But what about the states?

Can't they do something?

Well, yes they can, but unfortunately most state legislatures have been bought off by the health insurance industry.

Since 2003, health insurance companies have shelled out more than $42 million in state-level campaign contributions.

That is a lot of money, and they wouldn't be spending that kind of money if they did not expect a return for it.

"The pressure that the industry can bring to bear in state legislatures is unbelievable," J. Robert Hunter, a former insurance commissioner in the state of Texas recently told the Los Angeles Times. "They pretty much get what they want."

The cold, hard reality is that health insurance companies are not in business to help people and provide affordable health care. They are in business to make money and they are very good at it.

But there are a few states that have stood up to the health insurance companies. States that have "prior approval" laws have been able to successfully fend off some of the over-the-top rate increases that health insurance companies have been trying to ram down the throats of consumers. For example, the Los Angeles Times recently reported on what has been happening in the state of Oregon....

Regence BlueCross BlueShield of Oregon was forced to cut back a proposed 26.4% increase in one of its individual plans to 17.3%. Other carriers were ordered to scrap altogether hikes as high as 20%.

Unfortunately, a number of these states that have these "prior approval" laws are now being sued by insurance companies.

That is how these folks work - they will either try to buy off politicians or they will keep filing lawsuits until they get what they want.

Meanwhile, the top executives at the five largest for-profit health insurance companies in the United States received nearly $200 million in total compensation in 2009.

Are you upset yet?

You should be.

And you know what?

When it finally comes time to actually use your health insurance, these predators will do anything they can to get out of paying up.

In fact, it has been documented that some of the largest health insurance companies actually pay their employees large bonuses for denying claims. The employees who deny the most claims are the ones that get the largest bonuses.

The health care system in the United States is messed up beyond all recognition, and the new health care law has made things worse than ever. Americans pay more than anyone else in the world for health care, and all that we get in return is a system that is deeply, deeply broken.

Executives at health insurance giants cash in as firms plan fee hikes

(I apologize in advance for any offense, but is there a bigger class of cocksuckers than insurance and bank executives? During the worst economy since the depression, these dicks are going to hike the rates AGAIN after doing it last year and the year before!!! And this time, they are raising rates 40%! Fuck them! Off with their heads! First against the wall when the shit goes down.--jef)

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Execs @ Cigna, Humana, UnitedHealth, WellPoint and Aetna received nearly $200 million in compensation in 2009, according to a report, while companies sought rate increases as high as 39%.
By Noam N. Levey, Los Angeles Times
August 11, 2010 | Reporting from Washington

The top executives at the nation's five largest for-profit health insurance companies pulled in nearly $200 million in compensation last year — while their businesses prepared to hit ratepayers with double-digit premium increases, according to a new analysis conducted by healthcare activists.

The leaders of Cigna Corp., Humana Inc., UnitedHealth Group and WellPoint Inc. each in effect received raises in 2009, the report concluded, based on an analysis of company reports filed with the Security and Exchange Commission.

H. Edward Hanway, former chief executive of Philadelphia-based Cigna, topped the list of high-paid executives, thanks to a retirement package worth $110.9 million. Cigna paid Hanway and his successor, David Cordani, a total of $136.3 million last year.

Only one executive in the list actually saw his paycheck shrink last year: Ron Williams, the CEO of Hartford, Conn.-based Aetna Inc., earned nearly $18.2 million in total compensation, down from $24.4 million in 2008.

"Most families are struggling to hang on. Employers are struggling to stay in business. And these guys were giving themselves huge raises," said Ethan Rome, executive director of Health Care for America Now, a coalition of advocacy groups that prepared the report.

A spokeswoman for WellPoint said executives' compensation reflects their effort to improve care and hit corporate goals. Representatives of the other four insurers either declined to comment Tuesday on the report or did not respond to questions.

The executive packages were calculated by adding base salaries, bonuses, stock awards and other compensation reported on company financial statements. It did not include the value of exercised stock options.

Last year was highly profitable for most of the country's big publicly traded insurers. In the first two quarters of this year, profits for many insurers have continued to soar more than 20%.

Aetna's net income jumped more than 40% in the second quarter of 2010 compared with a year earlier. Indianapolis-based WellPoint recorded a 51% increase in its profit in the first quarter compared with the same period in 2009.

At the same time, the companies have sought major premium hikes. In Rhode Island, UnitedHealth of Minnetonka, Minn., this spring sought increases of up to 15.5%. In Utah, some customers of Humana of Louisville, Ky., reported increases of 29%.

In California, WellPoint subsidiary Anthem Blue Cross planned increases as high as 39% earlier this year. (The company later scaled them back, acknowledging errors in its rate-setting).

Industry officials have said the rate hikes are necessary because of rising medical costs, but insurance companies have faced added scrutiny as executive pay grows. After UnitedHealth CEO Stephen Hemsley cashed in nearly $99 million worth of stock options last year, a group of shareholders launched a bid to expand shareholder input on executive pay.

"It creates a culture of over-compensation," said Lance E. Lindblom, president of the Nathan Cummings Foundation, which led the ultimately unsuccessful effort to increase oversight at UnitedHealth. "That takes eyes off the ball of performance."

The Country is Getting Mugged

Why is Too Much Not Enough?

By BILL MOYERS and MICHAEL WINSHIP

Living in these United States, there comes a point at which you throw your hands up in exasperation and despair and ask a fundamental question or two: how much excess profit does corporate America really need? How much bigger do executive salaries and bonuses have to be, how many houses or jets or artworks can be crammed into a life? After all, as billionaire movie director Steven Spielberg is reported to have said, when all is said and done, "How much better can lunch get?" But since greed is not self-governing, hardly anyone raking in the dough ever stops to say, "That's it. Enough's enough! How do we prevent it from sweeping up everything in its path, including us?"

Look at the health care industry saying to hell with consumers and then hiking premiums - by as much as 39% in the case of Anthem Blue Cross in California. According to congressional investigators, over a two-year period Anthem's parent company WellPoint spent more than $27 million dollars for executive retreats at luxury resorts. And in 2008, WellPoint paid 39 of its executives more than a million dollars each. Profit before patients.

This week, America's Health Insurance Plans (AHIP), the health insurance industry's lobby, announced they'd be spending more than a million dollars on new television ads justifying their costs.

Speaking at their annual policy meeting in Washington - and without a trace of irony - AHIP's president and CEO Karen Ignagni declared, "The current debate about rising premiums has demonstrated that, in fact, we have a health care cost crisis in this country. Unfortunately, the path that has been followed is one of vilification rather than problem solving."

Beg pardon? You're lamenting a health care cost crisis and raising your premiums? Isn't that like the guy complaining there's an obesity epidemic in America while ordering a double Big Mac with extra fries?

Of course, a million is a mere bagatelle in the shadow of the $544 million that was spent on lobbying by the health sector last year, plus more than $200 million in advocacy ads. And a million's just the curtain raiser to what will be spent in these final weeks of health care reform debate. Two weeks ago, The Washington Post reported, "Washington interest groups have burst back into action in hopes of bolstering or defeating a new Democratic push on health-care reform legislation, sparking another wave of rallies, lobbying efforts and costly advertising campaigns."

This in spite of the projection that over ten years the Obama plan would plop an additional $336 billion into the insurance companies' pockets - in the form of subsidies given to those who can't afford to buy health insurance on their own.

Okay, this is getting weird: We're going to help the poor by enriching their exploiters?

But apparently even that won't satisfy big business' voracious appetite for more. On Tuesday, Employers for a Healthy Economy, a coalition of 248 business groups, led by the U.S Chamber of Commerce, and including construction and manufacturing interests, as well as health insurance companies, said that over ten days they will spend up to $10 million on ads aimed at putting the screws on members of Congress to vote against health care reform.

Goodness knows, it isn't just because their profit margins may dwindle. No, according to Neil Trautwein, vice president of the National Retail Federation, one of the trade associations involved, "These bills are job killers. Retail simply cannot afford any higher benefit costs or burdensome mandates." (Never mind that extrapolating from baseline forecasts made by the U.S. Department of Labor's Employment Projections Program, the Center for American Progress, a liberal think tank, projects that health care reform possibly could create an average of as many as 400,000 new jobs a year.)

But beyond the health care fight, and perhaps far more significant in the long run, this effort is just one more example of life, Pandora-style. The Company has arrived, only it's called the U.S. Chamber of Commerce, and it's got its sights on anything that moves, damn the natives, full speed ahead. During 2008, 86% of contributions from the chamber's political action committee went to GOP candidates. The conservatives have found their Avatar, AKA Frankenstein.

Of course there is not actually a Chamber of Commerce, at least the way we might imagine it. This is no confederation of congenial, small town business groups that pass out maps of Main Street and souvenir key rings. The chamber in question is a front group. Yes, yes, it reports a membership of three million businesses, but tax records indicate that in 2008 a third of its contributions came from 19 companies paying between $1 million and $15.3 million. Don't hold your breath: the chamber is not required to reveal who those 19 are.

The March 8 edition of the Los Angeles Times reports that "internal documents suggest the organization's treasury is filled in substantial part by contributions from a couple dozen major corporations most affected by Washington policymakers."

Got it? Predators who prey together stick together.

With all that cash, the Times notes, "The chamber spent more than $144 million on lobbying and grass-roots organizing last year, a 60% increase over 2008, and well beyond the spending of individual labor unions or the Democratic or Republican national committees. The chamber is expected to substantially exceed that spending level in 2010."

This elite organization of oligarchs has been emboldened by the Supreme Court decision in the Citizens United case, which now allows corporations to spend freely on political campaigns right up until Election Day, and by the chamber's recent success contributing a million dollars for ads supporting Republican Senator Scott Brown in Massachusetts.

What's more, writes the Los Angeles Times, "Using trade associations such as the chamber as the vehicle for spending corporate money on politics has an extra appeal: These groups can take large contributions from companies and wealthy individuals in ways that will probably avoid public disclosure requirements."

So with the spring comes anonymous greed run rampant. "In the past a lot of companies and wealthy individuals stood on the sidelines" of politics, a corporate lawyer at Washington's influential law firm Covington & Burling told the Times.

"That cloud has been lifted," he said.

As the sun sets on democracy.

No wonder demonstrators outside that health insurance meeting in Washington this week surrounded the hotel with yellow crime scene tape.

The entire country is being mugged.