Saturday, February 27, 2010

Let's Talk About Health Insurance Reform

The Republicans begin every conversation about lowering the costs of health insurance by bringing up tort reform, a.ka malpractice reform. In their narrow minded window of health reform solutions, capping damages on injured citizens is top on their list.

There is valid evidence that caps on non-economic damages do not reduce the costs of health care. They "do not bring down insurance rates!"

The state of Texas allowed the health insurance and health care industries to write the state's new malpractice law. The insurance industry's wish list was fulfilled. Yet, today the most expensive place in the nation to receive medical care and treatment is McAllen, Texas.

The experience of Texas in capping damage awards is a good example. Contrary to Perry’s claims, a recent analysis by Atul Gawande in the New Yorker found that while Texas tort reforms led to a cap on pain-and-suffering awards at two hundred and fifty thousand dollars, which led to a dramatic decline in lawsuits, McAllen, Texas is one of the most expensive health care markets in the country. In 2006, “Medicare spent fifteen thousand dollars per person enrolled in McAllen, he finds, which is almost twice the national average — although the average town resident earns only $12,000 a year. “Medicare spends three thousand dollars more per person here than the average person earns.”
Let's open up the horizon of possibilities. Let's talk about real solutions. Let's legislate a cap on the salary of the health insurance company CEO.


That is the sound of every CEO screaming at the top of his/her lungs that you can't legislate a cap on 'their' salary.

Why not? It certainly would save the insurance company billions of dollars each year.

While the American people find themselves priced out of health insurance and healthcare, the CEOs of America's largest for-profit health insurers are making record salaries.

And perks . . .like private corporate aircraft, country club memberships, security services (wonder why they need this?) and a lifestyle most Americans can only dream about.

It's really long overdue that the American people hit the streets to demand guaranteed and affordable healthcare. It's also long overdue that we drive a stake through the heart of the fully parasitic Murder by Spreadsheet for-profit insurance industry.

From the Washington Post:

Karen Ignagni, CEO America's Health Insurance Plans (AHIP)

Ignagni's total compensation, according to AHIP's most recent filing from 2007, was $1.58 million, which includes $700,000 in base salary, $370,000 in deferred compensation and a bonus. Ignagni won't say how many hours a week she works. The number's so high it's embarrassing, she said.

[All the following data for the 2008 salary survey is provided by Fiercehealthcare]

Meet the parasites:

Ron Williams - Aetna

Total Compensation: $24,300,112

Details: Williams earned $24,300,112 in total compensation for 2008, with more than half of that ($13,537,365) coming from option awards. He also received an additional $6,456,630 in stock awards to go along with his base salary of $1,091,764.

Personal use of a corporate aircraft and vehicle, as well as financial planning and 401(k) company matches added up to $101,487 for Williams.


H. Edward Hanway - CIGNA

Total Compensation: $12,236,740

Details: Hanway took a significant pay cut from 2007 to 2008, due mainly to a drop off of more than $11 million in his non-equity incentive plan compensation. Still, his base salary of $1,142,885 surpasses that of Aetna's Williams, and is supplemented by just over $3.6 million in option awards, and just over $820,000 in non-qualified deferred compensation earnings.

Also, nearly $21,800 in "other compensation" included the use of a company car with a driver, in-office meals, and emergency assistance services relating to medical exams.


Angela Braly - WellPoint

Total Compensation: $9,844,212

Details: Braly, like Williams, earned more money in 2008 ($9,844,212) than in 2007 (9,094,271), increasing her option rewards by nearly $1.5 million, and also receiving a $200,000-plus bump in base salary, from $922,269 to $1,135,538. Braly's stock awards dropped from $2,160,159 to $1,750,015 because, according to the SEC, "performance-based restricted stock units awarded in 2008 were cancelled because our ROE target for 2008 was not met."

Braly's "other compensation" comprised use of a private jet for her and her family on business trips, just under $10,000 for legal services relating to her employment agreement and cash credits.


Dale Wolf - Coventry Health Care

Total Compensation: $9,047,469

Details: Wolf is the only CEO on this list who is no longer employed with his associated health plan; he retired from his position on Jan. 30 of this year after serving in that role since Jan. 1, 2005, and was replaced by former CEO Allen Wise.

Wolf, whose total compensation dipped quite a bit from 2007 ($14,869,823) to 2008 ($9,047,469), was pleased with the direction the company was headed in at the time of his departure.

"I am proud of what a talented group of people have accomplished over the past 13 years of my association with the company," Wolf said, "and I am confident that the fundamentals which are in place today will carry the company forward to continued success."

Wolf carried a base salary of $965,000 in 2008, and earned just over $1.9 million in stock awards. His "other compensation," which amounted to $486,447, included transportation on the company's airplane, a company match retirement savings plan and a company match 401(k) plan.


Michael Neidorff - Centene

Total Compensation: $8,774,483

Details: Neidorff, who's base salary remained at $1 million, received increases in both his bonus ($1.25 million, up from $1 million) and his stock awards ($4.7 million, from $3.98 million) in 2008. According to the SEC, "Neidorff's agreement was amended twice in the past twelve months; (1) to eliminate the non-compete and non-solicitation requirements if there was a ‘hostile change in control' as defined in his agreement and (2) to add language to the agreement to make it compliant with Internal Revenue Section 409A."

Neidorff's "other compensation" of just over $418,000 comprised of use of the company airplane "for all travel," life insurance benefits, security services, and tax preparation services, among other things.


James Carlson - AMERIGROUP

Total Compensation: $5,292,546

Details: Despite a lawsuit regarding Medicaid fraud that cost the Illinois plan $225 million, Carlson himself earned roughly $2 million more than he did in 2007. All aspects of his compensation increased in 2008, from his base salary (up from $608,000 to just over $761,000) to his non-equity incentive plan compensation (up to about $2.8 million from $1.98 million a year ago). Carlson's bonus also grew quite a bit, going from $225,000 in 2007 to $520,312 in 2008; much of that amount was based on long term incentive program goals being met.

Carlson's "other compensation," which nearly tripled (going from about $7,000 to just over $20,000), included his employer 401(k) contribution, life insurance premiums, an executive health screening, flight services and a medical insurance stipend.


Michael McCallister - Humana

Total Compensation: $4,764,309

Details: Despite its pick ups of two smaller health plans (OSF Health Plans of Peoria, IL and Cos/Cariten Healthcare of Knoxville, TN), Humana's McCallister earned roughly $5.5 million less in 2008 than in 2007. While his base salary ($1,017,308), option awards ($3,078,897) and "other compensation" ($668,104) all increased, his non-equity incentive plan compensation and his nonqualified deferred compensation earnings totaled zero dollars. The latter represents a discontinuation of the Officers' Target Retirement Plan, according to the SEC.

McCallister's "other compensation" included personal use of the company aircraft for him, and sometimes his family; company contributions to the Supplemental Executive Retirement & Savings Plan and the Humana Retirement & Savings Plan; a once-a-year physical, financial planning assistance, and more.


Jay Gellert - Health Net

Total Compensation: $4,425,355

Details: Gellert, whose company is considering selling off divisions in at least four states, earned nearly $740,000 in additional compensation for 2008. His overall base salary increased to a little more than $1.2 million from about $1.18 million in 2007, and his stock awards also rose (from about $1.4 million to more than $1.8 million).

Gellert's "other compensation," which totaled $131,526, included, but were not limited to, a $53,000 housing allowance, a corporate car and tax reimbursements of nearly $41,000.


Richard Barasch - Universal American

Total Compensation: $3,503,702

Details: After taking a pay cut from 2006 to 2007, Barasch more than doubled his total compensation for 2008, jumping up from $1,564,293 in 2007. Barasch's base salary jumped up to $857,851 from $798,340 in 2007; his stock and option awards also increased, as did his "other compensation," which reflected a car allowance, relocation benefits and a matching contribution to his 401(k).

Also of note for Barasch was the fact that his non-equity incentive plan compensation earnings totaled $1,195,147; in 2007, he did not receive any money in 2007 for such compensation, but took home $1.1 million in 2006.


Stephen Hemsley - UnitedHealth Group

Total Compensation: $3,241,042

Details: An $895 million class-action lawsuit over stock-option back dating aside, Hemsley still manages to make the cut for this list at No. 10. The UHG CEO's base salary was $1.3 million in 2008, to go along with a non-equity incentive plan compensation worth just over $1.8 million and "other compensation" amounting to slightly more than $119,000.

Hemsley's other compensation was a combination of the company matching his contributions under the 401(k) plan and the company matching contributions under his executive savings plan. According to the SEC, "in May 2006, the amount of Hemsley's supplemental retirement benefit was frozen based on his current age and average base salary and converted into a lump sum of $10,703,229." Because of this, "there was no increase in the benefit payable to Mr. Hemsley under his supplemental retirement benefit" in 2008.

Real solutions with real results. It is not yet within the lexicon of the politicians.

No comments: