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Like the rest of Wall Street, WellPoint – one of the nation’s largest insurers, with 14 state Blue Cross brands in its portfolio – is having a banner year.
Today, WellPoint announced that profits jumped 727%. In the middle of the biggest recession in generations, WellPoint is raking in the cash hand-over-fist.
Why the jump? Turns out, last year WellPoint spent even less on actual health care than it did in 2008.
In 2008, it spent 83.6% of the premiums it took in on care – paying for doctors, drugs, and the like. In 2009, they spent only 82.6% of your money on your care. That seemingly small difference actually belies bigger discrepancies. An analysis by the Senate Commerce Committee [pdf] found that while WellPoint spends about 85% of every premium dollar on care in the large group market that big businesses can tap into, they spend as low as 73% of every dollar collected through individual plans, and 79% on small group plans purchased by small businesses.
A small change in this "medical loss ratio" means billions of more dollars that can be spent on CEO pay or reported as profit. Indeed, Martin L. Miller, a Senior Vice President at WellPoint, said that lowering the amount of money WellPoint spends on health care "really is the driver of profitability" and that the lowering of this percentage "is really what’s driving our improved financial results this year."
So, what did WellPoint do with that extra money?
They spent $4.7 million of it – $4.7 million of your dollars – on lobbying, a 21% increase from last year. And they secretly funneled more than $1 million to the Chamber of Commerce to run misleading attack ads trying to kill health reform. Oh, and CEO Angela Braley – the woman who said that her company wasn’t interested in expanding coverage if it meant making less money – made $8.7 million.
Isn’t that just sick? The list of injustices in this story is long.
WellPoint joins the rest of Wall Street and makes a huge profit this year while Americans are losing their jobs, their health care, and their houses. To guarantee that profit, WellPoint spends less of your money on your care. Instead, they steal those dollars you paid to finance your future care and pay $4.7 million to corporate lobbyists to "convince" Congress to kill reform. Oh, and they launder at least $1 million through the Chamber of Commerce for a smear campaign. And don’t even start on the CEO’s pay.
These companies can’t be allowed to operate this way any longer. A system where Wall Street-run corporations make money by spending less on medical care guarantees that under this system, our care will get worse and their profit margins will rise. Without limits on medical loss ratios, strong and enforced regulations on business practices, and a public health insurance option, nothing will change.
That’s why Congress and the President need to finish reform right. Every day that goes by without health care reform:
- 6,821 more people lose their health insurance [pdf]
- 2,548 more people file for bankruptcy because they got sick
- 60 more people die [pdf] because they don’t have the coverage they need
This problem is not going away. We need to get it done, get it done right, and get it done now.
(also posted at the NOW! blog)
I’m proud to work for Health Care for America Now
30 Comments
Turn over some rocks & show this to the cowardly Senate Democrats.
Clearly, Wellpoint needs a captive customer base in order to afford to cover everyone w/preexisting conditions.
You could never have law that required Wellpoint to disregard pre-existing conditions without guaranteeing that everyone in America is required to hold a product from Wellpoint or a similar “business”. Yes I am being sarcastic if you couldn’t tell.
Susan B. Bayh wife of you-know-who sits on the board of directors of Wellpoint
she also sits on two other boards as well or that is what i have heard!
Gee, I sure am glad to know my $460/month goes to something beyond the right to pay $2500 before health insurance kicks in — it goes to Anthem’s bottom line!
Yup!
Hey! Here’s a great idea! Let’s pass a law, just to say we passed a law, that makes everyone give Wellpoint money, no matter what, or the IRS shows up and collects for them!
This is totally fucking beyond obscene. Where is that insurance reform?
Oh, yes. Martha Coakley took it. Let’s send Lieberman, Nelson, Landrieu and Lincoln to pick it up.
And Obama is trying to preserve this feudal-like system, at the peoples’ expense.
So, how well did Evan Bayh do?
More profits = more campaign contributions = more profits = more campai….
A perfect self-reinforcing system.
wellpoint makes me sick.
Your money or your life.com
I think that’s yourmoneyANDyourlife.com
When [and only when] progressives figure out a way to translate stories like this into a new Congress composed of men and women who will no longer tolerate stories like this will stories like this no longer continue to appall progressives who insist something has to be done to change stories like this.
Maybe Barack Obama will get the ball rolling tonight. You think?
You think not?
You think maybe we’ll have to do it ourselves?
Okay, how?
No, it will sound good because he can talk but that’s all it is Talk and talk is cheap. Its business as usual and change you can believe in. Please remember when caught in a lie you admit you were wrong and then tell an even bigger one. It worked for Josephs Goebbels it work king g and it works for O.
I was only being ironic. Obama is already bought and paid for. We are not. But how do we become relevant to those other than ourselves?
I don’t pretend to have the answer. All I know is that while progressives are superb in pointing out the problems, they are less than stellar in coming up with solutions. That has to change or nothing else will. We need to back to the 1930s, the 1960s.
But how?
pa rum pum
Swedish style insurance regulation anyone?
I’m for it.
Careful – the Insurance Industry can be ANIMALS!
Watch the new cartoon at:
http://iblogwesthartford.blogspot.com/2010/01/aetna-cigna-and-connecticare-would-they.html
I don’t see how you get 727% from what is provided at your link. Could you clarify?
Sorry, got the wrong link. Here’s the right one:
http://www.latimes.com/business/la-fi-wellpoint28-2010jan28,0,5464798.story
Progressives need to keep fighting, but sadly, a vast great portion of our population is unaware of this, including the Tea Party types, who wish to remain in denial about it. Sure doesn’t help with conservatives pushing back at every turn.
However, I’m not specifically blame conservatives and Tea Partiers. I’ve stated often here how beyond disgusting this is. Until more of the population grasps just how firmly we are all being screwed, I think we can only count on more of the same.
SOTU?? Don’t make me laugh. ObamaRahma ain’t gonna change a thing. “Change” is for chumps only. He’s got his, so big ole EFF YOU to the rest of us. Didn’t Rahm E. say: “… don’t be so retarded!” or words to that effect?? You get the drift.
I am cynically impressed that WellPoint could buy so many Senators and Representatives for an outlay of only $5.7 million in lobbying and astroturf fees. Let’s generously assume they also funneled another $2-3 million to the BlueCross Blue Shield trade association that then showed up in AHIP lobbying income.
As a business co-founder if someone came to me and said our company could generate $100-150 Billion in NET profits over the net 10 years with an outlay of only $8 Million today, I would kiss their feet.
To put this in easier to understand math, imagine pulling a buck out of your pocket and donating it to your 2 senators and one representative in exchange for – hold on – $25,000 over the next 10 years. Would you take out just a buck? That $250 I donated to Obama would get me $6.25 million.
That’s corporate welfare.
Back in 2000 it cost Microsoft $6 million to buy congress to squash the antitrust case they had lost, worth about $10-30 billion in MSFT profits over the decade.
This just goes to show that it doesn’t take much to buy our own congress – if we spend wisely. We peasants just aren’t getting value for our dollar.
NI;
That is excellent narrative.
This is precisely the way to explain what is going on.
Seriously fine.
DW
I have BC insurance, I hate it and I hate them, and healthcare insurance is my biggest, most upsetting concern in life.
Reading this story and others like it just sickens me. I work hard for what little money I make, and this year, it will probably be the breaking point for me, if BC increases the rates the way I think they will.
You just would not believe the rage I feel against the United States government for allowing this torture to continue. They act like they have all the time in the world to fix this problem, and all the while, people like me are suffering while others are dying.
Hell, why should Obama worry? He, his family, the Senate, the House…they’ve all got it made for life. Why the hell should any of them give a damn?
Meanwhile, BC and its employees: Fuck all of you.
Gee, I wonder how much they paid off to Susan Bayh.
Over 1,000,000, I wonder where is loyalities lye. The only reason why Mike Pence isnt running against him for his senate seat is because Byah is already helping the nay sayers cause!
What’s wrong with the public option? Mandate without the choice of a public healthcare system puts us all at the mercy of the likes of Wellpoint. A public healthcare infrastructure will dramatically increase employment in this key sector and helps to reduce costs in the long-run as it will cover a more comprehensive range of services.