April 17, 2010
An investigation of six of Americas largest health insurers concluded that over one quarter of policyholders premiums on the individual health insurance market did not go to medical care in 2009, according to a Senate Commerce, Science, and Transportation Committee report released Thursday.
This new data makes clear that too many health insurance companies are still putting profits before people, and they have a lot of work to do to meet the consumer protection requirements of the health care reform law by the end of this year. Its time to give consumers the medical benefits they pay for and deserve, said Senator Jay Rockefeller (D-WV), the committee's chair.
Insurers were spending millions to fight health reform in Washington, while at the same time they were shorting patient care for consumers across the country, explained Larry McNeely, the Health Care Advocate for U.S. Public Interest Research Group, a consumer watchdog organization.
Federal regulations, called for in the recent health reform law, will require that 80% of premium dollars go to care, starting in 2011. Insurers who do not meet the new standards will have to rebate the difference to their customers. But the report warns regulators to be vigilant for insurers attempts to evade the forthcoming regulation.
According to the Implementing Health Insurance Reform report, insurers resisted providing this information, and investigators had to ultimately obtain data from the National Association of Insurance Commissioners.
The following chart details the percentage of premium revenue which the top six insurers actually spent on claims in 2008 and 2009 in the individual, small group, and large group health insurance markets, according to the report.
| Individual | Small Group | Large Group | |
| Aetna | 75.70% | 84.20% | 87.20% |
| Cigna | 88.10% | 92.10% | 85.20% |
| Coventry | 71.90% | 78.20% | 86% |
| Humana | 68.10% | 80% | 88.20% |
| United Health | 70.50% | 81.10% | 83.30% |
| Wellpoint | 74.90% | 81.20% | 84.90% |
| Total | 73.60% | 81.20% | 85.10% |
The Committee also published the amount each insurer received in premiums and the amount paid out for actual medical claims. The difference, the amount not spent on care by these six companies, amounts to $2.15 billion in the individual market, $5.7 billion in the small group market, and $6.6 billion in the large group market.
Its appalling, McNeely said. Insurers have been fleecing Americans out of billions of dollars. Thankfully, the new health care reform law will soon require insurers who dont provide a good value to rebate that money back to their customers.
