subject: Health Insurance Companies Raise Executive Salaries Along With Rates [print this page] Health insurers warned against the Obama administration's reforms. According to them, the premiums from the guaranteed influx of customers complying with the law's individual mandate would not offset the higher medical costs resulting from their being forced to accept patients with pre-existing conditions.
Indeed, several major health insurance companies have increased their rates since healthcare reform passed in March. Democrats in Congress have sternly told insurers that purposely increasing rates ahead of the deadlines for rate caps is strictly verboten. It remains to be seen if recent increases would be considered justified.
Said increases include a 29% jump in health insurance rates for Humana policyholders in Utah, as well as a nearly 16% increase in individual premiums for Rhode Island residents under UnitedHealth. If these are truly based on medical inflation and increased administrative costs, the changes are painful, yet reasonable.
However, an increasing number of people are doubting the industry's motives. During a period when consumers and small businesses have been forced to cut back, some chief executives have not followed suit. In fact, most of them effectively received raises! According to filings with the Security and Exchange Commission, the five major for-profit health insurance providers paid their heads about $200 million during the last fiscal year.
The most egregious example is with Cigna; former chief H. Edward Hanway received a nearly $111 million golden parachute for his retirement. That does not even include the over $20 million his successor was also paid in 2009. That is a hard pill for many to swallow when affordable health insurance has become more difficult to find.
On the other hand, kudos must be given to the CEO of Aetna. Ron Williams' total compensation (consisting of base salary, bonuses, and stock options) dropped from $24.4 to $18.2 million.
