Saturday, November 20, 2010

Health Coverage Declines But Companies’ Profits Soar

Original Link:

By Mike Hall

The number of working-age Americans who get their health care coverage through work dropped for the ninth year in a row in 2009, according to a new study by the Economic Policy Institute (EPI). The main reason, says the report, is the lousy economy and an unemployment rate that jumped from 5.8 percent in 2008 to 9.3 in 2009.

The latest figures show that employment-based health insurance fell from 61.9 percent of workers in 2008 to 58.9 percent in 2009. Says Elise Gould, Director of Health Policy Research at EPI and author of the report:

The current recession and its negative impact on access to health care highlight how dependent Americans are on a healthy labor market for all facets of economic security.

The report points out that the new health care reform law will make it easier and more affordable for Americans to secure and maintain health insurance coverage. But the “continued poor labor market will likely lead to”

further losses in insurance coverage before this major relief takes effect in 2014.

Click here for the full report.

The lousy economy hasn’t had much of an impact on six of the nation’s biggest private health insurance companies which saw their profits increase by 22 percent over last year in the quarter that ended in September, according to a new analysis by Health Care for America Now! (HCAN).

HCAN says the $3.4 billion in 2010 third quarter profits for WellPoint Inc., UnitedHealth Group Inc., Aetna Inc., Humana Inc., Cigna Corp. and Coventry Health Care Inc. is tied to the companies spending a “smaller share”

of premiums on medical care, purging unprofitable members and burdening consumers with higher cost-sharing limits.

According to HCAN’s study of the companies’ filings with the Security and Exchange Commission (SEC), the big insurers are reducing the amount of the premiums they spend on health care—know as medical loss ration (MLR). For example, Coventry’s MLR dropped from 82.1 percent in the third quarter of 2009 to 76.8 percent in 2010’s third quarter while profits soared from $70.6 million to $189.9 million in the same time frame. All six showed lower MLRs and higher profits.

The new health care reform law—the Patient Protection and Affordable Care Act—will spend up to 85 percent of premiums on medical services instead of profits and executive pay. Says HCAN Executive Director Ethan Rome:

Their behavior is offensive, and it’s outrageous that the Republicans in Congress want to give control of our health care back to the insurance companies by repealing the Affordable Care Act. We need the law and the protections it provides.

The financial engineers running the insurance companies know they make money by denying care, and they make more money by denying more care. That’s why the tough protections and increased competition and choice in the new law are so important. The law ends the total stranglehold that these companies have on our health care.

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