Former health insurance exec skewers Aetna’s and other industry complaints re: Obamacare

Wendell_Potter_cropFormer health insurance industry exec Wendell Potter, the author of multiple exposés on the greed and bad actions of the industry in which he once worked has a great column at healthinsurance.org that’s worth a few minutes of your time this morning.

It’s entitled “Cry me a river, Aetna. Retreating carriers whine that exchanges bruised their bottom lines; meanwhile, their profits are off the charts, thanks to … Obamacare.”

Here’s Potter, after noting that Aetna has raked in nearly $7 billion in profits since January 2014 despite its claims of massive amounts of red ink:

“Here’s the thing you need to know. Most of the people who buy coverage on the public exchanges are relatively poor and relatively sick. That’s because most of them were not able to afford Aetna’s policies in the many years before Obamacare became law. Now that those folks can finally afford coverage, thanks to Obamacare’s income-based subsidies, they’re also finally able to see a doctor and pick up their prescriptions. In other words, they’re actually using their insurance.

To make matters worse – at least in the eyes of for-profit health insurance company executives – there are not enough healthy, wealthy and young people buying Obamacare plans to make the ‘risk pool’ more to their liking.

Having worked for nearly 20 years in the health insurance business, I can assure you that the top priority of executives of the for-profit companies is not to make sure low-income Americans can get the medical care they need. Nope. Not a chance. Those guys consider every claim they pay to be a loss (hence the term ‘medical loss ratio’). They’re in this business to make a buck.

Their top priority – just as it is with most other New York Stock Exchange corporations – is to ‘enhance shareholder value.’ And every three months, what those executives want more than anything else is to impress Wall Street with its profits, to ‘exceed analysts’ expectations.’ If they can do that, they can pretty much be certain that their company’s stock price will go up. And when that happens, something else will go up: their net worth. That’s because all of the top executives of for-profit health insurers, without exception, are sitting on a big stash of their company’s stock.

Here’s another data point Bertolini didn’t mention when he was announcing the planned dumping of most of its Obamacare enrollees: Since March 5, 2009 – the day President Obama kicked off the debate on what would become Obamacare – Aetna’s stock price has increased 631 percent….

If you are an executive of a for-profit insurer, and you have to dump poor, sick people to meet your shareholders’ and analysts’ profit expectations – and to get quite a bit richer yourself – so be it. As I’ve written in the past, Aetna, in particular, is no stranger to that practice.”

Potter goes on to explain how corporate and CEO greed is at the heart of the for-profit health insurance industry complaints about the Affordable Care Act rather than flaws in the law itself. The bottom line: One long-term fix to what ails the American healthcare system is removing the obligation of for-profit insurers to meet the demands of their Wall Street masters. Let’s hope Wendell Potter keeps telling this story.

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