Insurers make big profits while the country is mired in recession

Health Care for America Now has released a study showing that in 2010, the last year before market regulations from health care reform take effect, insurance companies posted huge profits despite the catastrophic recession that plagued the rest of the country.

HCAN finds that the profits from the 5 largest health insurance companies grew 17% in 2010 reaching $11.7 billion. These companies spent less on benefits, dropped a combined 3.5 million people from their rolls in 2009 and 2010, and raised premiums enough to collect an additional $7.7 billion in 2010. For all of their efforts, the CEOs of these companies have pocketed nearly $1 billion dollars in compensation from 1999 to 2009.

All of this highlights the importance of the health care reform bill last year. For instance, last year all five of these companies spent 83% or less of the premiums they collected on medical care for their customers. The rest of those premiums dollars went to executive salaries and operating costs. Starting this year these companies will be required to spend 85% of the money they collect from large business customers on medical care, or else send out refund checks to make up the difference. The Department of Health and Human Services has estimated that 9 million health insurance customers will receive checks totaling $1.4 billion in rebates from their insurers in 2011.

-- Health Care for America Now