Health Insurance Companies Rally with Republican Wins
Several of the largest health insurance companies, including Cigna Corp. and Aetna Inc., rallied on Wall Street after Republicans won the governor seats in New Jersey and Virginia. The health insurance providers are hopeful the Republican victories will further their fight against the Democrats’ plans to overhaul their industry as part of health care reform.
As Americans watch and wait to see if affordable health insurance will ever be a reality, health insurers have been pushing hard against the possibility of a public option, an option that Republicans oppose. Introduction of a public option will make the insurance market more competitive and reduce the number of people who will purchase health insurance plans and pay premiums to the insurers.
The delay in the passage of any type of health care reform has can be attributed to many factors, not least of which is the lack of consensus among Democrats and Republican opposition to the Democrats’ proposals. Americans may have to wait even longer for health insurance reform if US Senate Majority Leader Harry Reid is to be believed when he told reporters in Washington on November 3 that “We’re not going to be bound by any timelines.”
News of the rally on Wall Street by health insurance companies came on the heels of a report in the Wall Street Journal on November 3, which notes that the six largest health insurers in the United States spent significantly less on medical care than the industry-wide average, according to a US Senate Commerce Committee investigation.
More specifically, of the total amount of money in premiums received by the six companies in the individual insurance market (Aetna, Cigna, Coventry Health Care, Humana, Unitedhealth Group, Wellpoint), 74 cents of every dollar were spent on providing medical care to policy holders. In the small group health insurance market, the figure was 80 cents, and it was 84 cents in the large group market. The industry-wide average is 87 cents, according to America’s Health Insurance Plans trade group.
Sen. Jay Rockefeller, D-WV, who is chairman of the Senate Commerce Committee, was quoted in the Wall Street Journal as saying “while health-care costs are spiraling upwards, consumers are paying more and getting less, and the health insurance industry doesn’t want anyone to know what they are up to.”
Americans may well be wondering what the health insurance industry is up to as well. As citizens wait for some sort of health reform and affordable health insurance, those in charge of making such reform possible seem to spend a lot of time finger pointing—much of which may be well deserved—while the insurance companies, pharmaceutical suppliers, and the lawmakers themselves dodge the jabs. Meanwhile the American public waits, wounded, on the sidelines.
Bloomberg.net Nov. 4, 2009
Wall Street Journal Nov. 3, 2009