A few days after print publication, Knight's syndicated newspaper column, which moves twice a week, will be posted. The most recent will appear at the top.

Thursday, February 2, 2017

Health insurers must be held to account

Bill Knight column for Mon., Tues. or Wed., Jan. 30, 31 or Feb. 1, 2017

Big News last week, when a judge’s ruling and the announcement of a big insurer’s profits should have gotten the attention of people concerned about the repeal of the Affordable Care Act – folks perhaps distracted by the diversions of a series of outrageous edicts from the Oval Office.

On Jan. 23, Judge John Bates of the U.S. District Court for the District of Columbia blocked the merger of Aetna and Humana, two of the country’s biggest health-insurance corporations. The $37 billion deal was targeted by the U.S. Justice Department and a handful of states, such as Illinois, that objected to a consolidation that would lessen competition and ultimately hurt policyholders and patients.

Illinois Attorney General Lisa Madigan had said that the proposed merger would hurt people in at least 35 Illinois counties.

Before President Trump’s Inauguration, U.S. Attorney General Loretta Lynch had said, “If the Big Five [Aetna, Humana and UnitedHealth, plus Cigna and Anthem – who also seek to merge] were to become the Big Three, not only would the bank accounts of the American people suffer, but the American people themselves.”

On Jan. 18, Republican House Speaker Paul Ryan on Charlie Rose’s public-TV show claimed that Aetna lost money because of its business in public exchanges of the Affordable Care Act (ACA: “Obamacare”), a justification for dumping the program – and millions of Americans covered by it. However, Bates – a George W. Bush appointee – found that Aetna’s claim that the ACA was to blame for financial losses was false. Instead, it was a tactic to pressure the government to approve the merger.

“Aetna was willing to offer to expand its participation in the exchanges if DOJ did not block the merger, or conversely, was willing to threaten to limit its participation in the exchanges if DOJ did,” bates wrote in his 158-page decision. “This is persuasive evidence that when Aetna later withdrew from the 17 counties, it did not do so for business reasons, but instead to follow through on the threat that it made earlier.

“The evidence provides persuasive support for the conclusion that Aetna withdrew from the on-exchange markets in the 17 complaint counties to improve its litigation position,” Bates wrote.

Deputy Assistant Attorney General Brent Snyder commented that Bates’ ruling is a victory for consumers that will save customers and taxpayers as much as half a billion dollars a year.

The ACA cost insurance companies more because they had been prohibited from excluding people with pre-existing conditions and also had customers who formerly couldn’t afford to be covered at all. So insurers had to spend more of the premium dollars they collected, invested and built up as substantial assets. However, health-insurance companies – the ones who actually raised premiums, not government – still made enormous amounts of money.

In fact, UnitedHealth (which previously announced its withdrawal from much of the ACA marketplaces) recently reported a 56 percent increase in profits in the 4th quarter of 2016, according to the Jan. 18 Wall Street Journal – $1.9 billion on $45.5 billion in revenues.

Of the Big 3, Aetna and Humana aren’t scheduled to release their 4th quarter reports for several days, but all three showed similar performances in the 3rd quarter:

Aetna reported $603.9 million in net income on $15.7 billion in revenue, a 7.8-percent increase.
Humana reported $940 million in net income on $13.7 billion in revenue, a 38-percent improvement.
UnitedHealth reported $3.6 billion in net income on $46.3 billion in revenue, a 20-percent increase.

“Health insurers once again are demonstrating that nothing – absolutely nothing – is more important to them than making their rich shareholders even richer,” said Wendell Potter, a former health-insurance executive and author of “Nation on The Take: How Big Money Corrupts Our Democracy and What We Can Do About It.”

Despite health insurers’ complaints that the ACA made them (gasp!) insure patients, they remained very profitable. If Trump and the GOP have their way, the coverage will vanish for millions of ordinary people, and the extraordinary profits will get even bigger.

[PICTURED: Editorial cartoon by David Horsey, from]

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