Thursday, January 20, 2011
Health Insurers Continue to Gouge Americans
This Video is from congressional hearings in 2010 after Anthem Blue Cross announced its 39% rate increase in California.
In California, Blue Shield has just announced to its customers that it is raising insurance rates as much as 59% because of its own rising costs. The State Insurance Commissioner, Dave Jones asked them to delay the planned hike for 60 days. The reply was equivalent to "get lost, you have no power over us". And guess what? He doesn't.
The four other large insurance plans in California have also raised their premiums by double digits. Blue Cross Anthem had already increased rates in October as much as 20% for nearly 800,000 individual California policyholders. They now want more.
Why do I make the bold statement that they are gouging Americans? Researchers at Goldman Sachs Group (as reported in the Wall Street Journal) estimate that the top four publicly traded plans will show earnings increases averaging 21% in the 4th quarter of 2010 compared to a year earlier. Aetna, Inc could see a 65% jump in the quarter just ended. "It is a very good time for profits in the health-insurance industry," says Robert Laszewski, president of consulting firm Health Policy and Strategy Associates.
It's also a good time to be an executive at a Health Insurance Company. WellPoint (parent to Anthem and it's steep rate increase) CEO Angela Braly earned a 51% pay increase from 2008 to 2009 to $13.1 million. Hey, did someone mention a recession?
I can assure you that physicians are not receiving payment increases from these insurers. Hospitals in California are contracting with them only enough to cover cost of living and inflation (a few percentage points). As families are struggling to hang on and employers are struggling to stay in business, the Insurance Industry is fat and happy.
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