Americans v. The Health Insurance Industry

Private health insurance corporations are gorging themselves with record profits at the expense of American workers and businesses. Insurance profits are up. Premiums are up. But payouts for medical care lag behind

Evidence reported by CBS MarketWatch shows that US health insurers have raked in record earnings over the past four years at a far greater pace than the rest of corporate America.

American workers and businesses have been gouged by insurance premium cost increases that outstrip the costs of medical care. Insurers have further boosted profit margins through an industry-wide practice of “shedding lives” – an insurance business practice of systematically weeding out sicker individuals and higher risk groups from the ranks of the insured.

According to researchers:

Profits of the top 17 US insurers rose by a record 114% over the four years since 2000, By comparison, the S&P 500 profits rose a meager five percent.

Stock values for the 17 largest health insurers doubled over the last four years.

Health insurance premiums rose by 60% over the same period.

The proportion of premiums that insurers paid out for medical costs declined over this period. The portion channeled into insurance company profit growth and claims processing increased.

Average pay for the top five executives at the 16 largest insurance companies doubled to an average of $3 million per year since 2000.
As a result of insurance industry financial practices:

The number of uninsured Americans climbed by 1.4 million to 45 million in 2002 and 2004.

The number of small businesses (companies with between two to 99 employees) that provide health benefits to employees dropped from 71% to 65% over the four-year period ending in 2003.

American-based businesses have been put at a growing disadvantage in competition with foreign competitors from nations where health insurance is a social benefit, rather than a private production cost. Over the last four years, for example, General Motors saw the cost of health insurance for employees in its American operations rise by 37%.

Click here for the full story of the how the health insurance industry is benefiting from America’s health insurance crisis.