Health Insurance CEOs Rake in the Dough

Last year, 2007, was great for CEOs of the top 7 for-profit health insurance companies. Just look at the average value of CEO compensation packages—$14.3 million. Pay packages ranged from (only) $3.7 million all the way up to $25.8 million.

The previous year, 2006, was even better for these CEOs. Their average compensation package rang in at $15 million.

See a chart of the total compensation packages of the CEOs of the largest 7 health insurance companies.

And then there were the perks: use of corporate jets and cars, financial planning and tax preparation service, and other freebies.

While the threat of medical bankruptcy is a real concern for many Americans, these CEOs have a financial cushion most of us can only dream of.

Millions and millions of people in the US have no health insurance or have insurance in name only, and you have to wonder where health insurance companies’ priorities are.

Using figures from the 2008 Employer Health Benefits Survey, the average pay package for a single CEO could instead be used to cover 1,127 additional families.

With outrages like this, it's no wonder that the public is demanding change. But, America’s Health Insurance Plans (AHIP), the insurance trade group, is fighting tooth and nail to keep business as usual. Rather than allowing people to choose a public plan that they would be forced to compete with, they'd rather force everyone to buy their plans.

There's a good reason why AHIP doesn't want to compete. What they offer is a bad deal for customers and the general public. As the United States Government Accountability Office reported recently, people who have signed up with private Medicare plans (private insurance companies that contract with the government to provide benefits to people with Medicare), can end up having to pay more out-of-pocket than they would under the public Medicare plan (traditional fee-for-service).

But are the plans saving taxpayers money? No! The private fee-for-service plans are actually costing the public 17% more than when the government handles the coverage itself.

So, AHIP wants insurers to continue making a killing, CEOs to continue living large, and money to continue being wasted on inefficient administrative systems, advertising, and large payouts to parent companies. Why expect anything different from profit-driven insurers?

Don't let them get their way!

Demand Fair Rules:

• A public alternative to insurance company coverage that is accountable to us.
• Fair regulation and oversight of insurance companies, with government as a watchdog.



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—Dennis P. Osorio is with Community Organizations in Action, the advocacy arm of Northwest Federation of Community Organizations.

12-19-08 By Dennis Osorio | Comment (1)