Impressionistic rendering of health insurers' profits

The new rules on health coverage are causing fibrillation in the microscopic hearts of health insurance giants Cigna, Aetna and United Health.

Apparently, stipulations in the new federal health law—including prohibitions on dropping policyholders when they get sick and refusing insurance to kids with preexisting conditions—will adversely affect insurers’ “medical loss ratio,” the percentage of each premium dollar pried out of insurers’ clutches to be used for actual healthcare.

A recent story by Robert T. Garrett of the Dallas Morning News puts it all in perspective.

In the article, former Aetna and Cigna executive Wendell Potter tells an illustrative tale of just how important this medical loss ratio is. According to Potter, Aetna had a problem a “few years ago when it announced that its medical loss ratio had inched up from slightly above 78 percent to a little bit more than 79 percent. The investors were so upset about that incremental change, the stock price dropped 20 percent on that one single day.”

Over the last 15 years, the industry has managed to drop, deny, lie, steal and cheat their healthcare costs down 15%, causing jubilation in the boardrooms, and industry profits to inflate like an engorged tick.

Having to divert money from the important things–executive compensation, bonuses and dividends–to things like medicine and healing has filled industry CEOs with dread; Wall Street does not like trimmer ticks.


I must be going deaf and blind. I know there are hordes of angry Americans out in the streets, carrying pitchforks and torches, screaming at the top of their lungs for an end to a healthcare system that determines its success by how little healthcare it delivers… I just can’t see them.


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  1. Rosemary Mancillas says:

    Check out the latest from the Insurance industry:
    “Insurance firms infuse GOP with big doses of cash” Chicago Tribune:,0,6752608.story

    We don’t stand a chance against the oligarchy- do we?


  2. Russ Buchanan says:

    Hey Rosemary –

    No, we don’t stand a chance; not until our fellow Americans notice that their chump meters are pinned in the red zone — finally forcing them to put down their lattes and pick up those pitchforks and torches, which they will no longer be able to afford (even though they’re manufactured for pennies by “globalized” child-slaves in Sri Lanka.)

    Terrific piece in the Trib–thanks.



  3. Rosemary says:

    You know, about 35 years ago– my Western Civ History professor, made a statement about “revolutions” that stayed with me– to paraphrase; Revolutions are not started by poor, starving peasants at the bottom of the heap. Revolutions are started by the bourgeousie middle class, who see their possessions and income shrinking and their businesses failing. Poor peasants have enough trouble trying to find food and stay alive on a survival level, they don’t have the energy or the resources to start or sustain a revolution. Remember, it was the nobles/lords/landowners who made King Jojhn sign the Magna Carta… not the serfs or peasants. ( And the rights were guaranteed only for landowners– not the peasants.)

    SO… if you look at what is happening in this country, the poorest who need the most assistance in this downturn, will be the last ones to raise hell. The middle class is going to have to feel the pain enough to raise the pitchforks and the torches.

    But in this country, the basic perception about the wealthiest one percent having the greatest proportion of wealth, is unclear. Most people do not realize just how bad the disparity us. Americans want to believe that one day they can be part of that 1%, so they are inclined not to penalize them, esp. since they really do not know how much of the wealth they actually control. ( I heard about a research report on NPR, but don’t have it now.)

    So again we get back to an ingnorant public. They want the answers to be blasted at them from the TV on their sofa without doing any homework. I remember my dad used to just read the headlines in the newspaper. Drove me crazy. Not much has changed today… Newt was right… people are sheep.

    That is why numbnutz like Palin can spout simplistic political cliches and have such a following… the dumbing down of Americans, is with us. Simple minds need simple answers, simple slogans, simple solutions, even if they are false.

    People got a false sense of security when the govt. made airport screening so “scrupulous” at the gates… but Americans failed to ask about the cargo shipped on planes.

    The felt secure and gave up their rights for obsessive government surveillance and wiretapping, and failed to ask, how is anyone going to manage those gazillion bits of information to pull out the ones that are important? What good is it if it is being stored in an intelligence warehouse by one of a hundred obscure agencies all working on their own, not sharing or integrating their intelligence?

    SO… I get very depressed because every time I think that Americans are finally going to wake up —it never happens. I thought health care was going to be the major issue in the 2000 election. And now 45% of the public thinks that the health care reform act should be completely rescinded??
    That must be the 45% of employed people that have health insurance through their employer or the retirees and veterans who have guarenteed health care through the VA or Medicare and Social Security. Screw everyone else.

    but then, if I was Empress of the World, I would have phased in Universal Health care with Single Payor. This plan is bullshit. It is a freaking gold mine for the Insurance companies.

    So that happy 45% better start letting more of these Mexicans and other immigrants in and become citizens, so they can help pay the Social Security bills for this generation coming up… or that 45% will not be so happy in 10 + years when they have little to look forward too in benefits.

    You know, I heard all kinds of bullshit about the Canadian system not working, everytime it was brought up. Well, I have lived and traveled in my motorhome, all over this country since 2002. I have met MANY snowbird Canadians who come and stay in warmer climes for 6 months or less, and I always ask them about their health insurance and healthcare. I have not, in all these years, met ONE single Canadian, who did not LOVE their healthcare system and would never give it up for ours or any other. They have told me examples of how good their care was. I don’t have time to write all the stories I heard, suffice it to say, they were really good.

    The politicians and the insurance and health care industry who pays them, have filled the airways, the print media and the internet with nothing but lies and self serving propaganda about the Canadian health care system.

    And just an interesting side note– they did not do what we did ( getting rid of the Glass-Steagall act) permitting banks to merge with investment firms… and gues what? CANADA HAS THE MOST STABLE AND SECURE FINANCIAL SYSTEM OF ALL THE WESTERN NATIONS. Now granted, they may not have the outrageous explosion of growth that we had, but they are doing quite well, thank you very much.

    Interesting ,eh? Our neighbors to the north, like us, but they do wonder about our sanity sometimes…


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