By now, most readers will have heard that health insurer, Anthem Blue Cross, is raising health insurance rates for approximately 800,000 Californians, on average, between 30-39%, starting next month.
If a Californian's Anthem policy used to be, say, $8000 per year, the increases would raise that same policy cost to somewhere around $10,500 per year. Nice profit-taking work, you know, if you can get it.
Anthem isn't raising prices so radically because America is suffering from runaway inflation. Ask any Social Security recipient.....there's no COLA (cost of living adjustment) for Social Security this year. The COLA is linked to inflationary indecices.
Anthem isn't raising prices because their company's profits have plummeted. Parent company, Wellpoint, posted a $2.7 billion profit, net-net, last quarter.....
WellPoint posted a 727.3% gain on its bottom line during the fourth quarter, as net profits jumped to $2.74 billion from $331.4 million in the year-ago period. Its margins catapulted to 18% from 2.2% in 2008's fourth quarter.
Indianapolis-based WellPoint is the largest commercial health insurer based on membership. It operates Blue Cross Blue Shield plans in 14 states (selling insurance, you know, 'across state lines')and Unicare plans in several others.
Why such a steep increase for Californians, then?.....
In a statement Monday, the insurer blamed the weak economy and rising health care costs for its rate hike,...
To be fair, a large portion of Wellpoint's 4th quarter $2.7 billion in profits came from the sale of NetRx, a subsidiary Wellpoint previously owned. But taking that transaction out of the equation results in this.....
Excluding that gain, the company still posted a healthy profit climb of roughly 63%, even as revenue dipped by $300 million and membership fell by 1.4 million members.
Wellpoint's revenue dropped $300 million and policy holders dropped by 1.4 million in the 4th quarter.....no doubt caused by recessionary pressures on Californians. Yet, even then, Wellpoint's profits jumped 63%. Profits going up 63% is counterintuitive evidence that, recession or not, there doesn't appear to be any justification for raising rates in California by 30-39%.
Let's compare the other big insurers profits last quarter to see if Wellpoint, and it's subsidiary Anthem Blue Cross, are just exceptions.....
UnitedHealth Group is the nation's biggest insurer....
....saw its fourth-quarter net profits climb 30% and margins go to 4.8% from last year's 3.9%.
....swung to a gain of $330 million from a loss of $210 million in the fourth quarter of 2008. That's a 257% shift.
Its margin for that period was 8.3%, far above the industry average of roughly 4%.
.....fourth-quarter profits jumped 44%, to $250.7 million from last year's $174.1 million, a gain of 44%. Margins climbed to 3.4% from 2.4%
In short.....and I think this should go without saying.....during the worst recessionary period in the modern history of the U.S.....during a time when American unemployment rates are as bad as during Reagan's first years in office......America's biggest health insurers are posting INCREASED profits.
Where do the health insurers increased profits go?
The second- largest insurer, UnitedHealth Group Inc., said Jan. 21 that it may raise its 3 cent-a-share payment to investors after the health-care debate in Washington is settled.
WellPoint Inc.’s chief executive officer, Angela Braly, said the health insurer is considering offering its first dividend....
How have Wellpoint stockholders been faring over the last year, a year marked by deep recessionary pressures?
WellPoint’s shares......have gained 52 percent in the past 12 months.
1) Wellpoint, parent of Anthem Blue Cross, is raising prices on California health policy holders......because they can.
2) Profits from the sale of ever-increasing Big Health Insurance policy costs continue to rise, even in historically recessionary times.
3) Much of those profits, coming from the millions of ever-rising-cost-policies.....winds up in the hands of a small group of already-wealthy "investors" through stock price increases and dividend payments.
All this explains why, when Republicans controlled Washington, nothing was done about health insurance costs. No reform offered. Those profit numbers, to Republicans, are proof that America's capitalistic economic system is 'working' as it should.
For Republicans, and corporately-owned Democrats, a few American "investors" becoming even richer through the distribution of profits gained by radically increasing the cost of health insurance year after year.....while millions more Americans are priced out of the 'market'....means everything is working out just fine.
Except for the majority of Americans.
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