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insurance ceos
Fueled by Stock Buybacks, Pay of Top Insurance CEOs Surged to $335 Million Last Year
"These health insurance CEOs have been so successful not because they have improved the health and well-being of Americans, but rather because they have sustained financial returns for Wall Street investors."
Jun 07, 2023
The United States' healthcare system is the worst in the developed world, delivering the highest death rates for treatable conditions, the highest infant and maternal mortality rates, and the lowest life expectancy at birth.
But a system that is failing patients, often in catastrophic ways, has been a massive boon for the executives who run the few private companies that dominate the nation's healthcare sector.
Last year, the CEOs of CVS Health, UnitedHealth Group, Cigna, Elevance Health, Centene, Humana, and Molina Healthcare—the top seven publicly traded health insurance giants in the U.S.—brought in a combined $335 million in compensation, STAT recently reported.
The outlet emphasized that "high-flying stock prices again fueled a vast majority of the gains," which mark a new record. Joseph Zubretsky, the CEO of Molina Healthcare—a company whose revenue comes entirely from taxpayer-funded programs such as Medicaid—took home a staggering $181 million in 2022.
As former Cigna executive Wendell Potter noted Tuesday, "these health insurance CEOs have been so successful not because they have improved the health and well-being of Americans, but rather because they have sustained financial returns for Wall Street investors."
"Not much has changed in how insurer CEOs are compensated since I left Cigna in 2008. Except they're making way more," wrote Potter, who is now the executive director of the Center for Health and Democracy.
In a new analysis of the latest CEO pay figures, Potter observed that "had it not been for their companies' share buybacks"—which help boost the price of their stock by reducing the number of shares outstanding—"they wouldn't have banked nearly that much money."
"My analysis of how much the companies have used our premiums and tax dollars to buy back shares of their own stock showed that combined they spent $141 billion on share repurchases between 2007 and 2022," Potter wrote. "Keep in mind that that is $141 billion that otherwise could have been used to reduce our premiums and deductibles–and keep an untold number of American families out of bankruptcy and away from GoFundMe–but was used instead to increase the wealth of their shareholders and top executives."
\u201c(1/6) LATEST: CEOs from the 7 big health insurance companies pulled in $335 million in just 2022 alone.\n\nHow did they do it?\n\nBy imposing high out-out-pockets requirements and premiums; stock share repurchases; and by gaming the Medicare and drug supply chain.\u201d— Wendell Potter (@Wendell Potter) 1686067073
Potter argued that the CEOs' exorbitant pay packages are "especially alarming when you consider that they are getting more and more of it from us as taxpayers" as tens of millions of Americans go without insurance, struggle to afford their prescription medicines, and drown in medical debt.
In an analysis released earlier this year, Potter estimated that government programs are the source of around 90% of the health plan revenues of Molina, Humana, and Centene.
Centene CEO Sarah London brought in more than $13 million in total compensation last year, and Humana chief Bruce Broussard took home more than $17 million. Both companies are major providers of Medicare Advantage—a privately run, publicly funded, and fraud-ridden program that is a growing source of insurance company revenues.
"Keep all of this in mind the next time you go to the pharmacy counter and are told that even with insurance you'll have to pay a king's ransom for your meds because your insurer—through its pharmacy benefit manager (PBM)—has once again jacked up your out-of-pocket requirement," Potter wrote. "Or the next time you notice how much has been deducted from your paycheck for your health insurance–and Uncle Sam."
Fresh outrage over the pay of insurance industry CEOs, which surged during the coronavirus pandemic as millions lost health coverage and got sick, comes amid a renewed Medicare for All push in Congress.
Last month, Sen. Bernie Sanders (I-Vt.), Rep. Pramila Jayapal (D-Wash.), and others reintroduced Medicare for All legislation in both chambers, with more co-sponsors than ever before—though the bill has no chance of passing the divided Congress.
The legislation would virtually eliminate private health insurance and provide comprehensive care to all for free at the point of service, a transformative change that would likely save tens of thousands of lives and hundreds of billions of dollars each year.
"In America, your health and your longevity should not be dependent on your bank account or your stock portfolio," said Sanders. "After all the lives that we lost to this terrible pandemic, it is clearer now, perhaps more than it has ever been before, that we must act to end the international embarrassment of the United States being the only major country on earth to not guarantee healthcare to all."
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Senate Dems Blast Medicare Advantage Giants Over 'Exorbitant' CEO Pay
"It is outrageous that industry groups, on your behalf, are putting your plan's enormous profits over care for seniors," wrote Sens. Elizabeth Warren and Jeff Merkley.
Mar 24, 2023
Sens. Elizabeth Warren and Jeff Merkley are calling attention to the massive profits and "exorbitant" executive salaries of top Medicare Advantage insurers such as UnitedHealthcare and Humana, which are leading a lobbying blitz against efforts to combat widespread fraud in the privately run healthcare program.
“In 2022, the seven major Medicare Advantage health care insurers—UnitedHealthcare, CVS/Aetna, Cigna, Elevance Health, Humana, Centene, and Molina—brought in revenues of $1.25 trillion and reported total profits of $69.3 billion, a 287% increase in profits since 2012," the Democratic senators wrote in recent letters to the companies' CEOs, citing an analysis by Wendell Potter of the Center for Health and Democracy.
"But rather than investing in benefits for patients," they added, "these seven health insurers instead spent $26.2 billion on stock buybacks."
Warren (D-Mass.) and Merkley (D-Ore.) also highlighted the "extraordinary salaries" of the insurance giants' CEOs and other top executives. Brian Thompson, who became UnitedHealthcare's CEO in 2021, brought home nearly $10 million in total compensation that year, according to SEC filings.
Humana chief executive Bruce Broussard raked in more than $17 million in 2021.
The letters were sent Wednesday as the insurance industry continues to ramp up its attacks on Biden administration proposals aimed at reining in upcoding and other tactics that Medicare Advantage plans use to reap larger payments from the federal government, which funds the program.
Critics of Medicare Advantage argue that such overpayments—which topped $15 billion in fiscal year 2021 alone—are "depleting the Medicare Trust Fund" at the expense of patients, who are frequently denied medically necessary care.
"MA plans are consistently paid more for seniors' care," Warren and Merkley noted, "and MedPAC projects that total Medicare payments to MA plans in 2023 will be $27 billion higher than if MA beneficiaries were enrolled in traditional Medicare."
"Rather than investing in benefits for patients, these seven health insurers instead spent $26.2 billion on stock buybacks."
Even though the Biden administration's proposed reforms would still leave Medicare Advantage plans with payments that are around 1% higher per enrollee in 2024 compared to this year, the insurance industry has characterized the changes as a cut and warned that their implementation would lead to higher premiums and worse care for beneficiaries.
In their letters, Warren and Merkley accused the for-profit insurance industry of attempting "to scare seniors and people with disabilities into opposing changes that will reduce waste, fraud, and abuse" in Medicare Advantage.
As The New York Timesreported earlier this week, "Medicare officials have been inundated with more than 15,000 comment letters for and against the policies, and roughly two-thirds included identical phrases from form letters."
"Insurers used television commercials and other strategies to urge Medicare Advantage customers to contact their lawmakers," the Times added. "The effort generated about 142,000 calls or letters to protest the changes, according to the Better Medicare Alliance, one of the lobbying groups involved."
That group—which counts Aetna, Humana, and other insurance giants as "ally organizations"—purchased a Super Bowl ad urging the White House not to "cut" Medicare Advantage:
Warren and Merkley voiced outrage that Medicare Advantage insurers would respond to the Biden administration's proposed policy changes by threatening "actions that hurt seniors"—such as premium hikes—"instead of reducing exorbitant salaries or the massive payouts to your shareholders and executives."
"It is outrageous that industry groups, on your behalf, are putting your plan's enormous profits over care for seniors," the senators wrote to the insurance company CEOs.
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