Bartlett

Worth a nice close read.

Comments

[fundamentalist]

I don't see how this bill will help those who are currently uninsured. Maybe someone can enlighten me.

[zero]

there's no need for enlightenment. this bill will not help those who are currently uninsured and it won't help those who are. it's a huge give away to the health insurance industry, as it currently exists. it's not likely to improve to the good of the general population and it's very likely to get much, much better for the health insurance industry. (and it's not about dems and repubs. it's about congress who are, collectly, owned by business. a white house as well for that matter).

[zero]

kate, did you have a happy c-mas? goo-goo and pecan log enjoy themselves?

[Doug]

zero: "it's a huge give away to the health insurance industry, as it currently exists."

Did you notice that health insurance stocks went thru the roof the past few weeks? Definite proof of your premise, here.

[zero]

once the senate voted on the bill a health insurance dude was quoted as saying, "we won". (it was reported the same day or next day by the wire services.) the stocks went through the roof because there's no perception that much will change in the negative (less money)for the industry and much could change in the positive (more money).

and, please, i implore you. not a word about capitalism or the dutch in discussing this thread.

[david beasley]

zero, do you mean to say the capital is in the dutch treat at the insurance office? OOps.

[zero]

oh david. you are soooooo silly. thanks for the laugh. but no dutch or capitalism in any form, please! piggies....

[fundamentalist]

I don't see how insurance companies won anything. They dodged the nationalization bullet, only to have regulation doubled. Now we have state and federal agencies micromanaging our business. If you don't like the meager 5% profit that health insurance companies make, you only have the state and federal regulators to blame. The regulators set the profit levels.

[fundamentalist]

The good news, from Kaiser Health News:

"The agency also would distribute as much as $140 billion a year in new government subsidies to help small employers and as many as 19 million lower-income people buy coverage."

The bad news: Because of new mandates on coverage and the requirement to cover pre-existing conditions, health insurance will cost considerably more. Also, doctor and hospital charges already rise at an average of 10% per year due to state-restricted supply and state-induced demand. Expect those to rise 20% per year with insurance premiums rising by an equal amount.

[evagrius]

"Oversized Profits, Executive Pay
Profits at 10 of the country’s largest publiclytraded
health insurance companies in 2007
rose 428 percent from 2000 to 2007, from
$2.4 billion to $12.9 billion, according to U.S.
Securities and Exchange Commission filings.
In 2007 alone the chief executive officers at
these companies collected combined total
compensation of $118.6 million—an average of
$11.9 million each. That is 468 times more than
the $25,434 an average American worker made
that year.35

Profits and CEO Compensation for 10 Major Private Health Insurance Companies
Company
2000 Net
Income
(millions)
2007 Net
Income
(millions)
% Change
2007 vs.
2000
Chief Executive Officer
2007
Value of Total 2007
Compensation
(millions)
Aetna $ 127 $ 1,831 1,342 Ronald A. Williams $ 23.0
Amerigroup Corp. 19 116 511 Jeffrey L. McWaters* 8.2
Centene Corp. 7 73 943 Michael F. Neidorff 8.8
CIGNA Corp. 987 1,115 13 H. Edward Hanway 25.8
Coventry Health Care Inc. 61 626 926 Dale B. Wolf* 14.9
Health Net Inc. 164 194 18 Jay M. Gellert 3.7
Humana Inc. 90 834 827 Michael McCallister 10.3
UnitedHealth Group Inc 736 4,654 532 Stephen J. Hemsley 13.2
Universal American Corp. 23 84 265 Richard A. Barasch 1.6
WellPoint 226 3,345 1,380 Angela F. Braly 9.1
Total $ 2,440 $ 12,873 428 $ 118.6

From;

www.HealthCareforAmericaNow.org

fundamentalist;

Wouldn't you like to have your CEO's wage compensation? I'll bet you can make the same decisions as he does.

[evagrius]

Another tidbit;

http://wonkroom.thinkprogress.org/2009/08/05/are-health-insurers-making-too-much-money/

"Profit" means what's left over after administrative cost and marketing and paying for health care.

[Kate]

Zero, A good Christmas was had by all here. I hope you had the same.

[fundamentalist]

evagrius, Of course I would like to earn what the CEO does. No I don't know that I can make the same decisions he does.

Dollar figures look really scary, but the honest way to compare them is by percentage. What percentage profits do insurance companies earn? According to PWC, the average is 5%, among the lowest in the nation. Admin expenses are about 8%.

Based on the data you posted, the CEOs earn on average 1% of the profits (net income). So if you eliminated CEO pay completely, you would get rid of 1% of 5%, or 0.05% of the cost of premiums.

"In 2007 alone the chief executive officers at these companies collected combined total
compensation of $118.6 million—an average of
$11.9 million each. That is 468 times more than the $25,434 an average American worker made that year."

Why should I care what another man makes as long as he does so legally? Beware of envy and covetousness. Apparently, the boards of those companies value his services that much, just as the owners of pro football teams value quarterbacks that much.

The only people who are concerned about what other people make are those who still cling to the medieval notion that one man can gain only at the expense of another. A corollary to that medieval idea is that trade is zero sum; in this case, the insurance company makes all of the gain and the member gets nothing in return. Economics proved that notion wrong over 300 years ago, but most people still cling to it.

[fundamentalist]

"health care economist Uwe Reinhardt explains. Within the context of companies’ revenues, insurers skim off 15-20 percent of premium dollars for administrative costs and profits."

Actually, according to PWC, the average is 13%, 5% for profit and 8% for admin.

[evagrius]

Mr. fundamentalist,

You really are quite humourous.

[zero]

that's grand, kate. it's very cold here. very. brrrrr..... it was 6 this morning! yikes!

[fundamentalist]

evagrius, so what do you think a CEO should make, and why?

[[email protected]]

I think we should raise the wages of all workers to $150/hour, really, and make CEOs work for only $155/hour. That way they make a little more than the rest of us, but nobody makes more than another. And we'll all be making tons of money!

[evagrius]

Mr. fundamentalist;

www.americanprogress.org/kf/ceo_pay_web_final.pdf

See Table 2 and Figure 2 and read the quote from William F. Buckley Jr.

[fundamentalist]

evagrius, I read your article. I have read close to a hundred similar articles. I understand all of the arguments about CEO pay and I don't disagree with anything but the moral judgments. Nevertheless, the article does not answer the question I posed to you: how much should CEO's make and on what basis?

I do disagree with one implication of the article. The author implies that CEO's are getting richer at the expense of stockholders and employees. That's the old medieval economic view. The author needs to join 19th century economics at least, if he refuses to live in the 21st century.

Something the author doesn't know is that CEO's get high pay to a large degree because they are finance pros and know how to game the system using debt. They are doing nothing illegal; in fact, they are acting just as the Federal Reserve wants them to act. Inflationary policies reward high levels of debt and as a result those who know how to use the system. Workers get poorer because of inflation. If you divided every CEO's pay among the workers, it wouldn't contribute much to their pay check, while inflation silently destroys their pay checks.

Still, I would like to know how much CEO's should earn, why and who is going to determine CEO pay?