Wednesday, August 11, 2010

Sweet Gigs

Feeling a financially pinched because of no job, or fewer hours, or lowered pay? A lot of people are. A lot, but not all. Some folks are making out quite nicely, thank you.

Among the lucky class are the CEOs of some major insurance companies. They're doing just fine.

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.

The pay of those CEO are justified by their Boards and by the CEOs themselves by pointing to the successes of the corporations in doing what the corporations are supposed to do: expand market-share, hit targets, make money. Lots of money.

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.

It's quite clear those companies are doing quite well, apparently because of the brilliant leadership of their CEOs. That's why they get the big bucks. Those leaders knew just how to get those profits in the door. In the case of insurance companies, specifically these insurance companies, rate hikes helped do the trick. After all, health care has gotten expensive. The cost of providing that health care has to be covered somehow.

So, if you're lucky enough to have employer provided health insurance, your boss has to shell out more money for that benefit, lessening the pool for other benefits (wages, for example). If you have a private policy, you have to cut back on other expenses (food, for example).

Unregulated capitalism at its finest.

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Anonymous paula said...


6:18 AM  

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