Industry Leader UnitedHealth’s 21% Profit Surge Shows What the Fight Is About
Just one day after the Republican Party voted to take away benefits from consumers and revive the insurance companies’ stranglehold on health care, industry leader UnitedHealth Group said its full-year profit jumped 21% to $4.6 billion in 2010. “Nothing demonstrates more clearly why the Republicans are so bent on undermining the Affordable Care Act (ACA) and why the House voted yesterday to repeal it,” said Ethan Rome, executive director of Health Care for America Now (HCAN), the 1,000-member coalition that led the fight for the new health care law. Analysts are expecting announcements of strong profit growth from other health insurance companies in the next few weeks.
“The Republicans’ reckless repeal plan will put insurance companies back in charge of our health care, restore the ‘anything-goes’ premium-rate hikes that are crushing consumers and businesses and raise the federal budget deficit to heights never before seen,” Rome said. “The health insurance industry is getting what it paid for in the 2010 elections – a free hand to do anything to make obscene profits. The GOP’s repeal vote was about letting the insurance companies off the hook and taking away important consumer benefits that matter to real people, like the ban on denying care to people with pre-existing conditions, big savings on drug costs for seniors and new caps on how much of each premium dollar goes to overhead and profits.”
UnitedHealth, a bellwether for the industry, this morning reported $4.6 billion in profit last year, up from $3.8 billion the year before. Last year UnitedHealth spent 80.6 percent of its premium revenue on actual medical care, a far lower ratethan in 2009. At the same time, insurers have been pursuing huge rate increases across the nation.
Wall Street knows that the ACA is likely to curb profits at many insurance companies in 2011, so the industry is especially interested in repealing new rules that cap how much premium money insurers may use for executive pay, profits and administration. That would explain why Congressman John Carter (R-Tex.), the Republican conference secretary, has pledged to block those rules.
Empowered by the Supreme Court’s Citizens United decision, corporate-backed groups intent on the repeal of the health care law spent enormous sums to elect pro-repeal candidates, according to a new study by People for the American Way. The industry also fought the law by funneling $86 million to the U.S. Chamber of Commerce last year and spent more than $769 million on lobbyists in the past four years. It isn’t known yet how much insurers gave to other major front groups. The Republicans have also hired former insurance industry lobbyists into key staff roles, including Julie Goon, a former lobbyist with the industry’s trade group, in a senior role with the Energy and Commerce Committee.
Health Care for America Now launched a multifaceted counterattack against the Republican repeal plan this week that included:
· 42 events in 23 states, garnering significantmedia coverage. Click here for photos and clips.
· Nearly 20,000 constituent phone calls to House Republicans’ offices.
· An online anti-repeal advertising campaign that totaled more than 2.3 million impressions.
· Coverage by 60 television stations of HCAN advocate Stacie Ritter’s story about fighting for coverage for her twin daughters after their cancer treatment.
· An anti-repeal demonstration on Capitol Hill before the vote on Wednesday.
Health Care for America Now is a national grassroots coalition of more than 1,000 organizations in 46 states representing 30 million people. HCAN led the fight over the past two years to win passage of healthreform and to keep Congress from being steamrolled by corporate special interests.