With Growing Legions of Uninsureds

Given that 7 million people fell from employer health insurance rolls in 2009, one might expect private health insurers to feel the pain. They didn't. This post will examine five major health insurers in three areas, number of people covered, profits, and CEO pay.

For those who don't like detail, the general picture looks like this:

Fewer people covered
Higher corporate profits
Fatter CEO pay

WellPoint

Number of people covered--WellPoint covered 33.67 million people in 2009, down from over 35 million in 2008. As of June 10, 2010 WellPoint covered even fewer, 33.5 million people.

Profits--WellPoint's income before taxes more than doubled from $3.1 billion to $7.4 billion. Netting out a one time gain from the sale of a subsidiary, income before taxes still increased to $3.6 billion.

Executive Pay--WellPoint CEO Angelo Braly's compensation rose from $8.7 million in 2008 to $13.1 million in 2009.

UnitedHealth Group

Number of people covered--United Health served 70 million people in 2009, down from 73 million in 2008. As of July 20, 2010 United covered 6 million more people, but the increase is due to acquisitions of Health Net of the Northeast and PPC Worldwide.

Profits--United Health's income before taxes increased from $4.6 billion in 2008 to $5.8 billion in 2009.

Executive Pay--UnitedHealth CEO Stephen Hemsley's compensation rose from $3.2 million in 2008 to $8.9 million in 2009.

CIGNA

Number of people covered--CIGNA's medical membership declined to 11 million people in 2009 from 11.7 million in 2008. As of August 5, 2010 CIGNA covered more people, 11.3 million.

Profits--CIGNA's income before taxes increased from $382 million in 2008 to $1.9 billion in 2009.

Executive Pay--CIGNA CEO David Cordani's compensation dropped from $7.1 million in 2008 to $6.5 million in 2009, however the non-equity incentive portion of his pay soared to $5 million.

Humana

Number of people covered--Humana's medical membership declined to 10.3 million people in 2009 from 11.6 million in 2008. As of August 2, 2010 Humana covered virtually the same number, slightly less than 10.3 million.

Profits--Humana's income before taxes increased from $993 million in 2008 to $1.6 billion in 2009.

Executive Pay--Humana CEO Michael McCallister's compensation rose from $5.2 million in 2008 to $6.5 million in 2009.

Aetna (the trendbreaker)

Number of people covered--Aetna served 18.9 million people in 2009, up from 17.7 million in 2008. As of July 27, 2010 Aetna's medical membership decreased by 86,000 to 18.602 million; pharmacy benefit management services membership decreased by 90,000 to 9.695 million; and dental membership decreased by 41,000 to 13.912 million.

Profits--Aetna's income before taxes fell from $2.2 billion in 2008 to $1.9 billion in 2009.

Executive Pay--Aetna CEO Ronald Williams' compensation declined from $18.6 million in 2008 to $18 million in 2009.

Williams recently told CNBC that Aetna had "margin improvement" included in its pricing. I wonder how those struggling to afford coverage can foster Aetna's growing margins.

With growing legions of uninsureds, health insurers made more profit and CEO's got greater incentive pay. President Obama made this group the cornerstone of reform. Amazing.