Health Care Premiums Also Used for Lavish Salaries, Luxury Items, Underwriters

[sabra]

Source: ABC News

West Virginia Democrat Wants Transparency in Insurer Health Care Spending

A significant portion of health insurance premiums go not for actual medical care but for private jets, generous CEO salaries and underwriters who decide when to drop patients who become too expensive, according to a Senate committee report.

Sen. John D. Rockefeller, D-W.Va., chairman of the Senate Committee on Commerce, Science and Transportation, wrote to 15 of the biggest health insurance companies in August, asking them to provide information on how much of policyholders' monthly premiums was spent on medical care versus the amount that went to administrative costs and company earnings.

Such figures are known in insurance industry-speak as "medical loss ratios." But when insurance companies balked, saying the information was confidential and proprietary, Rockefeller's investigators went digging through public documents and found that much of policyholder premiums was going to nonmedical costs.

The insurance industry has long pointed to federal data that says about 87 percent of every dollar that people spend on premiums goes toward actual medical care, but Rockefeller's investigators found the average for the top six insurance companies is closer to 82 cents on the dollar for medical care.

That five-point difference represents billions of dollars.

Read more: http://abcnews.go.com/GMA/YourMoney/health-insurance-pr...

[PDJane]

1. Yes,it does.......

And that difference is why the insurance companies will kill to keep making those profits. It is also why health care should be a non-profit service.

[Hawkeye-X]

2. For most part, it is non-profit

They just use the premiums to enrich themselves.

[DollyM]

3. there was an article in our local paper . . .

A couple of weeks ago there was an article in our local paper about how the health insurance companies only make about 4 percent profit, akin to what someone would make selling Avon or Mary Kay. I have trouble believing this but being a very conservative, small area, I am sure this is what people want to hear so they can go on paying those outrageous premiums on health insurance while they feed their kids top ramen just to be able to pay the bills.

[dflprincess]

4. William McGuire - former CEO and chief parasite of United Health Group

was quite the art collector. He used to buy pieces for his private collection with his own money....Then he'd lease them back to UHG for display in their corporate building. Apparently, this was legal.

When you think about it, UHG policy holders paid double for the art. Once when they paid McGuire's salary and again when he received his leasing checks.

[flyarm]

5. understand this Americans can go out of the country and buy art ..DUTY ( TAX) free!

so many of the wealthy buy art , and don't pay taxes on that money..for the art..then they loan it out to museums or corporate headquarters..they still own the expensive art..it is like a private bank account..the art, if good won't depreciate..and the rich guy saved the tax money!

Its why so many rich folks buy art in France..and they leave it in the museums, or have the art travel to many countries depending on their contract with the museum, but their estates always own the art..and it is taken care of by the museums, and they saved the tax money for their estates.

[dflprincess]

6. Fine,

but they're not using my health care premiums to do it (and then telling me that those premiums have to go up every year).

[flyarm]

7. no kidding!! ..I am right there with you!! eom

[dflprincess]

8. Sorry,

misunderstood where you were coming from. It has to do with a recent experience where someone thought the insurers spending money on somthing other than health care was okay because other companies do it. (Apparently they didn't have a mother who taught them the "everyone else is doing it" wasn't an excuse for bad behavior).

[flyarm]

9. no problem..I too am one of those "teaching moms!"..eom

[progressivebydesign]

10. when the AP had that story about how the Insurers had such tiny profits.. I laughed.

How stupid do they think we are? We ALL know that profit is what's left over. They sure the hell aren't going to pay for those things out of the profit. Your accounting guys make sure that those are considered expenses.. problem solved.

[Zoeisright]

11. I think 82% is high. It's probably more like 70%.

n/t