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Aetna Cuts 600,000 Lives for Profit

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Aetna announced that it will deliberately cut 600,000 people from its insurance rolls to raise its profits next year:

In a third-quarter earnings conference call in late October, officials at Aetna announced that in an effort to improve on a less-than-anticipated profit margin in 2009, they would be raising prices on their consumers in 2010. The insurance giant predicted that the company would subsequently lose between 300,000 and 350,000 members next year from its national account as well as another 300,000 from smaller group accounts.

Aetna’s decision to downsize the number of clients in favor of higher premiums is, as one industry analyst told American Medical News, a “pretty candid” admission. It also reflects the major concerns offered by health care reform proponents and supporters of a public option for insurance coverage, who insist that the private health insurance industry is too consumed with the bottom line. A government-run plan would operate solely off its members’ premiums.

Aetna is saying they want to make more money on each person they insure to please Wall Street, so they are raising prices. It doesn’t matter to them if this action causes them to lose some less profitable customers, customers that actually use their health care benefits. In fact, they welcome it. They are more than happy to let these people be priced out of the market, go uninsured, go bankrupt, or lose their lives. These people are not bringing in enough money for Aetna, so Aetna would rather not have them as a customer.

Aetna is following the insurance company playbook as articulated last year by Wellpoint CEO Angela Braly when she said, “We will not sacrifice profitability for membership.” In other words, the insurance companies won’t sell health coverage to more people if it means they will make less money on each person.

They don’t care about coverage, they just care about profits. This is exactly why we must have a public health insurance option.

Health reform without a public option will not not work. The insurance industry playbook would still be on the table, and they would still find ways to cut people for more profit. Even with laws against insurance companies denying care, they would still find ways to do it.

The CBO confirms this with their analysis. Even with laws making it illegal for insurance companies to deny care, the CBO found that while the public option would keep down insurance premiums overall, it would attract less-profitable customers that the insurance companies don’t want and would refuse to insure.

There is no substitute for a public health insurance option that’s national and available everywhere on day one – no triggers. And indeed, the bill on the table in the Senate gets us there.

To those moderates who are holding out, don’t let the perfect be the enemy of the good. There may be some things in the Senate bill you don’t agree with, but that’s no reason to deny this country the reform it needs and wants. It’s time to allow this bill to come up for a fair, majority vote in the Senate.

*This post originally appeared in SEIU Blog on December 9, 2009. Reprinted with permission from the author.

About the Author: Jason Rosenbaum is a writer and musician currently residing in Washington D.C. He is interested in the intersection of politics and culture, media consolidation issues, and making sense out of our foreign policy disasters. He currently works for Health Care for America Now and he is also the webmaster for The Seminal.

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Insurance companies go before Kucinich panel

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In a room filled almost to capacity with K street lobbyists and company lawyers, executives from the nation’s top six insurance providers testified before the Domestic Policy subcommittee during day two of the subcommittee’s hearings. While yesterday committee members heard from victims of insurance companies and industry whistleblowers who shared their disheartening stories of industry abuse, today brought a much different tone.

The witness list included executives from United Healthcare Group, WellPoint, Aetna, Humana, CIGNA and Health Care Service Corporation. They repeatedly expressed their support for health care reform, but when questioned about specific industry practices or guidelines, they tirelessly dodged the issue. Whether the committee members asked about rescission policies or executive salaries, the witnesses seemed reluctant to provide anything beyond vague generalities extolling the virtues of their industry.

However, it seemed that many of the committee members took yesterday’s testimony to heart. Following up on Dr. Linda Peeno’s statement from yesterday that her salary was directly related to how many claims she denied, Representative Cummings asked all the witnesses if there was any reward at their company for doing likewise. Frustrated by the complete denial of such practices by all executives, Rep. Cummings said “Well, I guess there must be those other insurance companies out there doing this.”

Rep. Conyers also dropped in on the hearings, even though he is not a member of the subcommittee. He took a slightly different line of questioning, asking the witnesses if they were aware of a wide variety of insurance-related facts, such as the existence of the organization Healthcare for America NOW. None of the witnesses said they had ever heard of it.

Overall, the hearings posed several tense moments between the Democratic representatives and witnesses. At one point, Rep. Conyers asked Patricia Farrell, the Aetna representative, how much she made per year. She refused to disclose the amount to the committee, offering instead to submit it in written form after the hearing. All of the other witnesses, except the Humana and Health Care Services Corporation executives, refused as well.

While it is unclear exactly how much light today’s hearing shed on the internal practices and operations of the insurance companies, the committee members did request large amounts of additional information from the witnesses, including tapes of internal meetings discussing raising profits and compensation listings for their top executives. Rep. Kucinich closed the hearing by noting that this is just the beginning of an ongoing process to learn exactly how the insurance companies operate and how they can be reformed to better served the American people.

About the Author: Maria Tchijov is an online organizer & new media specialist in healthcare on SEIU’s New Media team. SEIU is the nation’s largest union of health care workers, with over half of the union’s 2.1 million members working in the field, including 110,000 nurses and 40,000 doctors.

This article originally appeared in the SEIU blog on September 17, 2009. Reprinted with permission by the author.

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