US health insurers reap record profits in 2009
By Kate Randall
19 February 2010
www.wsws.org/articles/2010/feb2010/prof-f19.shtml

The five largest US health insurance companies set new profit records in 2009, while the greatest economic downturn since the Great Depression sent millions of Americans onto the unemployment line and into poverty.

The five firms reported $12.2 billion in profits last year, an increase of $4.4 billion, or 56 percent, over 2008. At the same time, 2.7 million Americans who had been enrolled in private health plans the year before lost their coverage....

.....While the insurers raked in massive profits in 2009, four of the five companies insured fewer people through private coverage. At the same time, all but one of the five insurers increased the number of people they covered through public insurance programs, including Medicaid, Children’s Health Insurance Plans (CHIP), and Medicare. This is part of a long-term plan by insurers to shift responsibility for covering millions of sick, older, or lower-income customers to taxpayer-funded government health programs. These programs have, in turn, been increasingly hiring the big insurers to manage their care.

While their profits have soared, the proportion of dollars earned through premiums that is spent on health care expenses went down at three of the five firms, with ever-larger relative sums being funneled to administrative expenses and CEO and shareholder profits. The medical loss ratio (MLR)—the share of premiums used to pay health care providers—decreased or remained flat at most insurers.

The top five insurers continue, as well, to manipulate their capital resources carefully to benefit their Wall Street investors and corporate executives. The majority of companies report waiting six to eight weeks after receiving claims to pay doctors, hospitals, and patients, utilizing the cash to build up company reserves and boost their balance sheets.....