Kathleen Sebelius, Secretary of Health and Human Services has come out swinging against health insurance companies, saying that, it is time to put health care back in the hands of consumers and not insurance companies. In a recent statement she said health insurance companies were raising premiums at a time when families were struggling to cope with a down economy.
The insurance company, Anthem Blue Cross in California wrote recently to beneficiaries indicating that premiums are going to be raised by as much as 39 percent. As well, large insurance companies have requested increases of 56 percent in Michigan, 24 percent in Connecticut, 23 percent in Maine, 20 percent in Oregan and 15 percent in Rhode Island.
Sebelius said that what makes this situation so untenable is, not only are insurance premiums being increased, but insurance industry profits are also growing significantly.
“Humana earned $452.3 million in the fourth quarter of 2009 from its Medicare Advantage plans, compared with $267.3 million a year earlier, a 70 percent increase,” said Sebelius. “At the same time, these companies are being vastly overpaid by the federal government, making huge profits and sticking seniors with higher bills.”
According to Sebelius, the five largest health insurance companies – WellPoint, UnitedHealth Group, Cigna, Aetna, and Humana – earned combined profits of $12.2 billion in 2009, 56 percent more than the previous year. Moreover, the CEOs of these same companies are each taking home up to $24 million per year.
Sebelius said that it is imperative that the broken health care system be reformed as without competition, transparency, or choice, there is nothing to stop insurance companies for continuing to increase rates, passing on the cost to American workers.
“Our broken system is working for insurance companies, not families. While profits and premiums are going up, coverage is going down,” Sebelius said. “And three of the top five insurers cut the proportion of premiums they spent on customers’ medical care last year, committing more to salaries, administrative expenses, and profits.”
Reform will protect consumers from insurance industry abusive practices and will encourange competition, driving down costs and offering consumers choices to get the coverage that is right for them, Sebelius said. Furthermore, a reduction in health care cost through reform would likely generate between 250,000 and 400,000 jobs a year.
