Contractors, insurance firms gouging taxpayers, panel says

[babylonsister]

Contractors, insurance firms gouging taxpayers, panel says

Defense contractors, insurance firms make millions off loose Iraq insurance rules

RICHARD LARDNER
AP News

May 15, 2008 10:51 EST


A poorly run Pentagon program for providing workman's compensation for civilian employees in Iraq and Afghanistan has allowed defense contractors and insurance companies to gouge American taxpayers, a House oversight committee said Thursday.

Insurance companies alone have pocketed $600 million in excessive profits over the past five years, says a staff report from the House Oversight and Government Reform Committee, but the Defense Department refuses to adjust its approach for managing the program.

According to the committee, the Pentagon allows its contractors to negotiate their own insurance contracts. By contrast, the State Department, U.S. Agency for International Development and the Army Corps of Engineers have all selected a single insurance carrier to provide the insurance at fixed rates.

"What makes the situation even worse is the people this program is supposed to benefit — the injured employees working for contractors — have to fight the insurance companies to get their benefits," committee Chairman Henry Waxman, D-Calif., said at a hearing Thursday. "Delays and denials in paying claims are the rule."

KBR Inc., one of the largest defense contractors in Iraq, paid the insurance giant AIG $284 million for medical and disability coverage under the Defense Base Act, a reference to the federal law mandating the insurance. Due to the way KBR's contract is structured, this premium, along with an $8 million markup for KBR, gets billed to the taxpayer.

"Out of this amount, just $73 million actually goes to injured contractors, and AIG and KBR pocket over $100 million as profit," Waxman said.

more...

http://talkingpointsmemo.com/news/2008/05/contractors_insurance_firms_go_1.php

[dajoki]

1. Sounds just like...

it is here in the USA. The insurance companies, the contractors and businesses rake in huge profits, while the injured person gets nothing but harrassment.

K&R