Greed Trophy up for Grabs
By gollies, the top executives of health insurance corporations are not giving up without a fight! To paraphrase every high school football coach who ever lived, "When the going gets ugly, the ugly get going."
During the past several months, the Barons of Wall Street had established themselves as the vilest and most reviled corporate team in the land. They've been lavishing bonuses on themselves even as their firms continue to benefit from government bailout measures and even as ordinary Americans continue to struggle with the economic collapse caused by the bankers' arrogance and avarice. Wall Streeters were widely considered a shoo-in to take the coveted Corporate Greedhead Trophy this year — but, holy cow, what a comeback bid we're now seeing from the Giants of Insurance!
Let's recap their amazing charge: Last week, the news broke that America's five largest health insurance companies (United Health, Wellpoint, Aetna, Humana and Cigna) had scored record profits in 2009, totaling $12.2 billion. This was a stunning 56 percent hike over the previous year, a drive made all the more impressive by the fact that these gains came during the worst economic downturn since the Great Depression.
As American families struggled financially last year, Team Insurance was able to boot 2.7 million more people out of their private health plans, leaving those folks in the corporate dust. In an even slicker, hidden-ball play, three of the five giants cut the proportion of premiums they spent on their customers' medical care, shifting those premium dollars into corporate salaries, profits and administrative overhead. Even Wall Street's Barons had to shake their heads in disbelief and marvel at the audacity of that play.
By the way, buried in that increase for the insurers' administrative overhead was a little statistic that often gets overlooked: lobbying expenses. The Big Five spent $16.8 million last year to lobby against comprehensive reform of our health care system.
The recession-time surge in insurance profits, the shedding of older and sicker customers, the lateral of more premium dollars into things like executive pay — these maneuvers alone would've moved health insurance up in the top tier of ugly industries. But then the industry ratcheted up its game another notch. One of Wellpoint's subsidiaries heaved a "Hail Mary" pass that shocked everyone and catapulted insurance into a serious contender for the Greedhead Trophy.
In the same week that Wellpoint acknowledged that its 2009 profits were up by $2.3 billion over the previous year (a 91 percent increase), its Anthem Blue Cross subsidiary in California caused a sensation by seeking to raise the premiums on its customers' policies by as much as 39 percent this year.
As befits a true Greedhead striver, Wellpoint neatly stiffed critics by asserting that this price hike was necessitated by the general increase in America's health care costs — never mind that the corporation's rise in premiums is actually 10 times more than the rise in the overall cost of health care. What a move!
However, whether Wellpoint's daring California score will be allowed is in question, for there was a flag on the play. State insurance zebras are questioning the legitimacy of the increase, causing a company executive to argue heatedly that while tens of thousands of customers would indeed be socked with a 39 percent jump in their premiums, the average rate increase would be a mere 25 percent, so the play should be OK.
Come on, sports fans, ya gotta give 'em some style points just for trying to get away with that.
Still, can the upstart Insurance Giants hope to out-ugly the more-sophisticated Wall Street Barons? The great thing about Corporate America is that competition is always fierce for the national greedhead title, and insurance is now in the running. As sportscasters can tell you: Only time will tell, it's not over 'til it's over, tomorrow's another day, winners never quit/quitters never win, wait'll next year, and it's deja vu all over again.
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