Break out the cheese steaks, the pretzels and the roast pork sandwiches -- it's party time at Philadelphia-based CIGNA Insurance.
Champagne bottles are popping all over Center City Philadelphia this weekend.
Profits are up 40 "freaking" percent at CIGNA!
Yup, you read that right! Because people are suffering in the recession and can't afford their massive "CIGNA junk policy" deductibles, medical care is not being accessed by policyholders as much as in the past. As a result, CIGNA's so-called medical loss ratio (MLR) was able to slip from 84.4 percent a year ago to 78.5 percent in the last quarter. The Journal reports:
Analysts noted that the percentage of premium revenue used to pay members' medical claims--a key measure known as the medical loss ratio--in Cigna's main commercial risk segment declined to 78.5% from 84.4% a year earlier. Investors like to see insurers contain the MLRs; regulations under the new health-coverage laws, however, will require insurers to spend at least 80% or 85% of premium revenue on patient care as of 2011, dependent on type of health plan.
As you know, the ACA requires commercial insurers to spend at least 85 percent of premium dollars for medical expenses with group policies and 80 percent for individual policies.
The managed-care industry and analysts expect lower earnings this year compared with 2010 because of health-policy changes--notably the new minimum medical-spending requirements for insurers--and likely return of demand to typical levels. Industry earnings are expected to grow in 2012 and beyond.
Because CIGNA knows its shareholders will be pissed when profits drop next year due to the government-mandated MLR floors, CIGNA is doing all it can to influence policymakers along with the crooks at UnitedHealth, Aetna and WellPoint. Their goal: gut consumer protections in the ACA that could lead to decreased profits for Wall Street.
It's the same old story at CIGNA -- when we suffer, CIGNA wins. The Journal goes on to say:
The industry benefited last year as consumers reduced their use of medical services amid the sluggish economy and high unemployment.
What a twisted and perverted system we have, eh CIGNA?!
People don't get any less sick when they lose their jobs or lose income. Children don't get cancer any less frequently, but they are still forced to cut back on care because of our immoral for-profit health insurance system that translates bad times for the American people into great times for CIGNA executives and shareholders.
Maybe CIGNA can send some of its profits to the Sarkisyan family whose daughter CIGNA "murdered by denial" in 2007. CIGNA, of course, weaseled its way out of accepting any liability for her death.
UPDATE: Yesterday I wrote about how CT insurance executives are doing their best to kill CT's public option, SustiNet. Wendell Potter has a great new column on SustiNet available at the Huffington Post.