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.
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.