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)
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