Aetna CEO Asked Execs To Read Piketty, Then Gave His Lowest-Paid Workers A Raise

[okaawhatever]

One CEO has taken a step that could help fend off Thomas Piketty's nightmare vision of rising wealth inequality: He's giving thousands of his workers a raise.

Aetna Chairman and CEO Mark Bertolini announced on Monday that the health-insurance company will be raising wages for its lowest-paid employees. Starting in April, the minimum hourly base pay for Aetna's American workers will be $16 an hour, according to a company press release.

The 5,700 workers affected by the change will see an average pay raise of about 11 percent. The lowest-paid workers, who currently make $12 an hour, will get a 33-percent raise.

The Wall Street Journal reported that Bertolini recently requested that Aetna executives read Capital In The Twenty-First Century, by the French economist Piketty. The book, which has been hailed as the "most important book of the twenty-first century," warns that the gap between the haves and the have-nots is heading toward Gilded Age levels of inequality and calls on the world's largest economies to fix the problem.

Continued at Link:
http://www.huffingtonpost.com/2015/01/13/aetna-ceo-piketty-worker-raises_n_6462540.html

[Jackpine Radical]

1. So enlightenment is possible.

Somehow, this sends a real wave of optimism through me.

[tammywammy]

2. k&r

[Ruby the Liberal]

3. Wow. Did not see that coming.

Suspicious as to where they found the money as lord knows shareholders won't feel the pinch - and now this explanation bubbles to the surface.

Feeling a bit cautiously optimistic this morning. Thanks for the thread!

[Iris]

27. My guess is from bonuses and raises at top level.

Since he asked his executives to read the book, too. I didn't read the whole article. Maybe there's an explanation there.

[dixiegrrrrl]

41. He used the magic words.."social compact"

words I swear have been extinct for the past 2 decades.

[Divernan]

4. Wow! An enlightened, humane CEO: Aetna we're glad we met ya!

The U.S. government, which last raised the federal minimum wage to $7.25 an hour in 2009, has not exactly scrambled to respond. Aetna's move is one way companies could help close the gap.

“It’s not just about paying people, it’s about the whole social compact,” Bertolini told the Journal. “Why can’t private industry step forward and make the innovative decisions on how to do this?”

Other factors may have influenced Aetna's decision to boost pay. The Affordable Care Act is helping millions of Americans get insured, which means insurance companies have to beef up their consumer services to stay competitive.

“Health care decisions are increasingly consumer driven," Bertolini said in a statement emailed to The Huffington Post. "We are making an investment in the future of health-care service."

[okaawhatever]

7. Two effects of the ACA that people don't give it credit for:

“Health care decisions are increasingly consumer driven,"

Consumer driven....you know that makes most insurance CEOs ball like babies.


"We are making an investment in the future of health-care service."

They're interested in service? That is a 180 from a few years ago. Back then they were primarily interested in getting the contracts from the fortune 500 companies.

[Schema Thing]

11. And it's probably a relatively "easy" way to help meet the MLR requirements

[calimary]

12. Sounds like he wants to get out ahead of it. Shrewd move! And the public relations

will be great if they play it up. Might even start a minimal domino effect in some of the executive suites? Maybe that's too much to hope for. HOWEVER, I'm feeling encouraged by this.

And YEAH, SPOT ON that it's another residual of the ACA. Let's call it "trickle-down" so the business community can grasp it a little more easily.

[90-percent]

5. This CEO is doomed

Aetna's Board of Directors will not be pleased with his vulgar display of basic human decency, compassion and generosity. Thinking such as this could erode their self imposed bonuses from ten million a year to a measly 9.8 million a year.

This CEO is a traitor to his class!




-90% Jimmy

[alcibiades_mystery]

6. Institutional shareholders will shitcan him before summer

Bank it.

[NewJeffCT]

9. I don't think so

Bertolini is partially disabled, having suffered a spinal cord injury several years ago. It would not look good canning a guy that might need to be pushed out in a wheelchair. Plus, while he's been CEO for 5 years, the stock has gone from just over $30/share to just over $90/share.

Despite being an insurance company, Aetna has been pretty progressive over the years in their hiring & promoting of women & minorities: former tennis great Arthur Ashe made news in the late 70s or early 80s when Aetna hired him first as a consultant to their board of directors, and then putting him on their board. Bill Clinton's first nominee for attorney general in 1993 was Zoe Baird(before Janet Reno) - who was head of Aetna's legal department at the time.

(The CEO before Bertolini was African American, and Aetna's president is a woman.)

[okaawhatever]

14. Excellent information. I'm glad to hear this and will look for ways to send my business to them

in the future.

[NewJeffCT]

15. They are still an insurance company

and a public corporation, so profits are still important thing to them. That said, raising pay for 5,700 workers is not a short term decision, I'd think?

[okaawhatever]

16. With the ACA their profits are limited. They must spend 85 cents of every dollar on health care

the remaining 15 cents goes to all administrative costs and profit. I think Aetna knows that in the future insurance companies will have very similar cost structures and customer service will be what customers look for.

The ACA is only medical and they still have auto, accident, etc. to profit from

[Lurks Often]

29. Aetna is strictly health insurance and health insurance related

[liberal_at_heart]

39. The health insurance industry helped write the ACA. I just bet buried with in those thousands of

pages of law there are loopholes that allow them to keep more profit than they are telling us.

[okaawhatever]

40. Apparently there isn't. That is why the insurance companies are fighting so hard to reverse that

rule. They have two things they desperately want to change 1. The cap on profit and 2. pre-existing condition exemption. Those are the ones they're giving GOP candidates big money to change. We'll see if they do in the next Congress.

[Neon Gods]

28. Thanks for this background

It makes the news of the raises even more compelling.

[mountain grammy]

30. My mom worked for Aetna at their home office in Hartford.

That was in the 60's and 70's. They were progressive for women. She worked her way into a good job and then as a consultant after retirement. Mom wasn't an executive, but as a widow with two kids, she made a decent living.

Piketty's book doesn't offer much in the way of remedies, but this CEO understands he's part of the problem and must be part of the solution.

[NewJeffCT]

33. my mom worked there from the mid 80s until retiring in 2004 as well

she did very well for a woman that had no college degree and started off as a secretary. Used to be a great place to work - a large majority of the employees worked 37.5 hours/week, or 7.5 hours/day, and were very flexible with working times - people would come in at 6am and leave at 1:30, or come in at 9:30 and work until 5:00. Unfortunately, as the company had financial difficulties on and off through the 90s, they scaled back on the generous benefits and eventually got rid of the 37.5 hour week, going to the "normal" 40 hour week. (My mom used to say that every year, they paid a little more for their benefits and got a little less in return.)

(she was smart enough to go to college, but back when she graduated high school around 1960, Italian girls either went to work or got married - not to college.)

[mackerel]

35. Doomed was what I was thinking too! At least he can say he did one good thing in his life.

[JayhawkSD]

8. This is what I'm talking about

He read Piketty and he didn't start ranting about inequality, he raised the wages of his workers because this is the solution to the problem. He got it. He knew that inequality is but the symptom of the problem, and the problem is the failure of working class prosperity to keep up with econimic growth.

[okaawhatever]

17. Let's hope that now he's raised the wages he starts to rant about inequality. Maybe other CEOs

will hear him.

[Roland99]

10. Piketty's book (or, rather, his research) *is* that good!

Facts do not lie (despite any conservatives' protestations against the content and summations in the book)

[Hekate]

13. Stunning. Cautiously optimistic to see who else responds.

[Faux pas]

18. Kickin'

with a

[riqster]

19. Enlightened self-interest at work.

[ohheckyeah]

20. I have Aetna medical

insurance and my premium only went up $2.00 a month for 2015. Before the ACA and Aetna, my BC premiums were going up $70 - $100 a month yearly.

[Dark n Stormy Knight]

21. What is this guy, crazy? I can't believe he expects his executives to

read!

[Jefferson23]

22. Damn hippies

K&R

[abelenkpe]

23. K&R

[valerief]

24. Good. I wonder if they get medical insurance, too. nt

[lostnfound]

25. I have Aetna now and will keep it and recommend it. That's awesome.

I have had United in the past but changed to Aetna a couple of years ago, and been generally satisfied. This is a terrific move.

[BlancheSplanchnik]

26. Wow!!!! I'm so glad to see this.

And surprised! An insurance CEO!? Wow!

[tclambert]

31. Other CEOs will have to beat him with copies of "Atlas Shrugged" and "The Fountainhead."

Surely such behavior must be punished!

[rurallib]

32. color me amazed. Last year when I signed up for the ACA

my choice was basically only Coventry which had just been bought by Aetna. Let us say it did not go well.
Wasn't Aetna the CEO who said he was going to undermine the ACA?

Maybe there is hope for our world yet.

[butterfly77]

34. I was going to switch to United..

[pa28]

36. This is a practical, forward thinking CEO.

He's thinking about the long term survival of the system that puts the silk in his underwear.

[liberal_at_heart]

37. K&R. Shocking, but glad to see it.

[appalachiablue]

38. Very pleased and surprised to see this. Must be a decent CEO. Thank heavens for Mr. Piketty.

[B Calm]

42. Doesn't the ACA limit insurance companies on profit and if company profits

are too great they have to refund the money to the people who purchase their insurance?

[IronLionZion]

43. Medical Loss Ratio (80/20 rule)

The 80/20 Rule generally requires insurance companies to spend at least 80% of the money they take in on premiums on your health care and quality improvement activities instead of administrative, overhead, and marketing costs.

The 80/20 rule is sometimes known as Medical Loss Ratio, or MLR. If an insurance company uses 80 cents out of every premium dollar to pay for your medical claims and activities that improve the quality of care, the company has a Medical Loss Ratio of 80%.

Insurance companies selling to large groups (usually more than 50 employees) must spend at least 85% of premiums on care and quality improvement.

If your insurance company doesn’t meet these requirements, you’ll get a rebate from your premiums.

https://www.healthcare.gov/health-care-law-protections/rate-review/

http://www.whitehouse.gov/blog/2014/07/24/8020-rule-saving-americans-lot-money-what-exactly-it

[LiberalArkie]

44. I know where he got the money.

They quit covering my asthma meds and they dropped the pharmacies in my county. The rep said I would need to drive to a Walmart.

[JDPriestly]

45. This is good news.

The current wage differential is so off balance that it will hurt our economy.

We don't need to have perfect balance or fairness in wage differentials, but the disparity today is very unhealthy. Money is not just necessities and a few extras, it is political power.

People without money have difficulty participating in the political discussion. People with lots and lots of money dominate politics. That is very unhealthy. I hope I don't have to explain why.

[Grins]

47. Why does Mark Bertolini hate America?

Doesn't really matter.

They won't have to pay it 'cuz the Cato Institute weasels say welfare pays more than any minimum wage job.

So what idiot would show up for work, work for which Wall St. Journal editor, Paul Gigot, said that wages should be kept low because that is the only way the poors (i.e., the 'lucky duckies&quot can learn from their poverty?

[rwsanders]

48. Maybe he'll realize insurance companies prevent people from getting healthcare. Will his head pop?