Morton Mintz: Taking Aim at Insurance Execs’ Pay
Posted at 11:09 pm, December 5th, 2009
“Democratic senators are taking aim at insurance executives’ pay as they jockey for advantage in a rare weekend session to debate President Barack Obama’s health care overhaul,” the Associated Press reported Dec. 5.
The AP article provided no specific examples, so suppose I mention a few likely candidates:
One is Ronald A. Williams, chief executive officer of giant health-insurer Aetna Inc. He was paid a total of $47,345,946 in the last two years, as this site reported in August.
If Williams would care to justify his compensation — $64,857.46 a day, every day of the year; $2,702.39 an hour every hour of every day – I’d gladly extend him the opportunity to do so.
Now, as I just read in Huffington Post, “Aetna is planning to force up to 650,000 clients to drop their coverage next year as it seeks to raise additional revenue to meet profit expectations.” Maybe he can justify that, too.
Others in similar positions are also raking it in. I’ve learned from Seton Hall University School of Law’s Health Reform Watch that Williams’s 2007 compensation of $23,045,834 was nearly $2.8 million less than Cigna CEO H. Edward Hanway’s $25,839,777. Also in 2007, Coventry’s Dale B. Wolf received $14,869,823, United Health group’s Stephen J. Hemsley $13,164,529, Humana’s Michael McCallister $10,312,557, WellPoint’s Angela Braly $9,094,271. and Health Net’s Jay M. Gellert $3,686,230. Total 2007 pay for seven health-insurance CEOs: $100,130,021.
In 2008, Williams led the pack, with $24,300,112, followed by Hanway, $12,236,740; Braly, $9,844,212; Wolf, $9,047,469; McCallister, $4,764,309; Gellert, $4,425,355, and Hemsley, $3,241,043. Total 2008 pay for the seven: $67,859,240.
Suppose the seven had been paid, say, only $1 million each. That compensation would have enabled significant premium reductions — in 2007, of roughly $93 million; in 2008, of about $61 million — that would have enabled purchase of coverage by many of the 45,000 Americans whose deaths each year are linked to lack of health insurance.
December 6th, 2009 at 9:45 pm |
These earnings starkly illuminate the inherent contradiction of health insurance as an industry, i.e. as a profit-making venture, instead of being in the realm of the public interest. Consumers are funding these salaries! Also, the inordinately high executive compensation must be angering to physicians who participate in these insurers’ networks, whose fees are sharply curtailed by these companies.
Full disclosure: I am Morton Mintz’s daughter
December 7th, 2009 at 5:03 pm |
Mintz’s research reveals income figures that are absolutely stunning. It seems to me, as a lay person, that one measure of how civilized a society has become is the way that its wealth is distributed. One important difference between the United States, which has generated great wealth, and other developed countries is the much larger gap between high and low income citizens in the USA.
In Canada, the gap between the rich and the poor is growing rapidly, as I suspect it is in our friendly neighbour to the south. And yet it is the more equitable distribution of wealth in Canada that has permitted this country to give its citizens a publicly funded health care system, an institution that polls show Canadians appreciate above all other programmes.
Until citizens in both our countries start to think hard about the uncivilizing effects of extreme greed and challenge the unfortunately still prevailing neo-conservative or neo-liberal (depending upon whose terms one uses) free market economic theories, the income gap will continue to grow, to the detriment of society. Kudos to Morton Mintz for throwing more light on the dark underbelly of this free market romp.
Garfield Mahood, OC
Toronto, Ontario
December 10th, 2009 at 12:16 pm |
This should be an eye opener to everyone who is paying attention. It certainly highlights the major flaw in our health care system. I wish your statistics were required reading for every voter and for all those misguided tea baggers.
December 14th, 2009 at 1:08 pm |
There is no reason any health insurance company needs to make any profit at all. Health insurance companies have no actual inherent purpose in society at all. Any of their functions could easily be provided by government or non-profit organizations. The whole set up is a sham and Americans are being fleeced.
December 27th, 2009 at 5:09 pm |
All very good points, as it would be impossible for anyone to justify such salaries.
I have found that some “Not for Profits” also pay exhorbitant salaries and expenses, unless there are regulators who provide effective oversight.
January 2nd, 2010 at 1:50 pm |
Excellent article about something which is almost completely ignored by the corporate mainstream media.
February 12th, 2010 at 12:39 pm |
Changing the tax law will not hurt the executives, it will not lower compensation, it will only serve to increase premiums as the companies will pass on these extra expenses to the insured.