In 2005, William McGuire, as CEO of UnitedHealth Group, received compensation of $124.8 million, according to Forbes. In 2006, The Wharton School estimated the value of his options package at $1.6 billion.
For $1.6 billion, he must have revolutionized health care, right?
But United Health doesn’t treat illness, doesn’t perform surgery, doesn’t provide health care of any kind. Neither does any other health insurance company.
Their principal goal is not to provide health care at all. It is just the opposite; to provide as little health care as possible in order to maximize profits and reward their executives and shareholders.
To do this, they ration health care to the healthiest, weeding out anyone who might actually need health care.
In addition, they limit "insurance losses" by refusing claims, contesting expenses, imposing lifetime limits on care, limiting the payout per illness, requiring prior authorizations for treatment, and shredding your coverage with ever more exclusions.
What UnitedHealth really revolutionized is the audacity with which they invoked the fine print in the policy to cancel costly clients, the ones who have become chronically or catastrophically sick, and the rate at which they deny claims. The California Nurses Association found that UnitedHealth’s PacifiCare subsidiary rejected 39.6% of all claims. They paid employees, and even awarded bonuses, for rejecting claims and terminating patients with chronic illnesses.
In addition, because of their near monopolies, insurance companies can raise premiums at will. The American Medical Assn. found in a 2007 survey that a single insurer had a 50% or more share of the conventional insurance market in 76% of the country...including most major metropolitan areas.
This gives the companies enormous power to drive up premiums and other costs. The two largest insurers, WellPoint and UnitedHealth Group, each acquired 11 other insurers between 2000 and 2007 and now control a total of 67 million "covered lives." This is one reason insurance premiums have doubled in the last seven years.
The same factor...lack of competition...allows health insurance companies to raise co-pays and increase deductibles at will.
Despite the insurance companies’ propaganda, it’s the government that does all the health care heavy lifting, funding Medicare for old people and the disabled, Medicaid for poor people, the VA for veterans, DOD/TriCare for the military, and the BIA health service for Indian reservations. According to some estimates these agencies remove as much 90 percent of the risk from the health insurance pool, including veterans with PTSD who will require lifetime care.
That leaves the healthiest segment to private companies, who still manage to spend as much as 47 percent of the premium dollars they receive in "loading fees," – non-medical expenditures --according to a University of Minnesota study.
What insurance companies do is take your money and promise to pay if you get sick.
They then use your premiums for their own purposes, including showering money and benefits on executives, like "Dollar Bill" McGuire," and on tame board members who rubberstamp management’s decisions. It was reported in the Minneapolis StarTribune in 2006 that ten public members of UnitedHealth’s board each cashed in at least $1 million worth of company stock. So management and the board were busy scratching each other’s back with the assets of a public corporation.
Those premiums provide them resources to hire lobbyists, buy off congressional watchdogs with campaign contributions and underwrite the current $400 million public scare campaign against insurance reform, the better to protect their private piggy banks.
With those resources, insurance executives award themselves stock options, golden parachutes, lifetime use of company jets, chauffeured limousines, company apartments, club memberships, sports tickets, financial planning, and other perks.
Competition from a government option would clearly doom such largesse. Medicare’s overhead is 4% and its administrator makes $250,000. The private insurance industry, in contrast, extracts $450 billion from the system every year...enough to fund Medicare for everyone.
A recent Kaiser Family Foundation study determined that insurance premiums average $13,375 per family (including employer contributions). In addition, according to NPR, the average middle class family pays of "tax" of $1100 dollars to its local hospital to cover emergency room medical care for the indigent. This is the highest cost medical care in the world, and even covers illegal aliens.
Medicare-for-all would eliminate those costs and allow cost-effective medical care at less than the combined $14,475 average that families are already paying, because private insurance companies wouldn’t have their hands in the till.
Despite the current costly, corrupt, and dysfunctional system, some in Congress continue to oppose reform, choosing in effect to protect insurance executives’ perks instead of providing healthcare for all. This is what $400 million, liberally spread around, can do, and further reason the system must be changed.