Aetna Forcing 600,000-Plus To Lose Coverage In Effort To Raise Profits

[t0dd]

Source: Huffington Post

Health insurance giant Aetna is planning to force up to 650,000 clients to drop their coverage next year as it seeks to raise additional revenue to meet profit expectations.

In a third-quarter earnings conference call in late October, officials at Aetna announced that in an effort to improve on a less-than-anticipated profit margin in 2009, they would be raising prices on their consumers in 2010. The insurance giant predicted that the company would subsequently lose between 300,000 and 350,000 members next year from its national account as well as another 300,000 from smaller group accounts.

"The pricing we put in place for 2009 turned out to not really be what we needed to achieve the results and margins that we had historically been delivering," said chairman and CEO Ron Williams. "We view 2010 as a repositioning year, a year that does not fully reflect the earnings potential of our business. Our pricing actions should have a noticeable effect beginning in the first quarter of 2010, with additional financial impact realized during the remaining three quarters of the year."

Aetna's decision to downsize the number of clients in favor of higher premiums is, as one industry analyst told American Medical News, a "pretty candid" admission. It also reflects the major concerns offered by health care reform proponents and supporters of a public option for insurance coverage, who insist that the private health insurance industry is too consumed with the bottom line. A government-run plan would operate solely off its members' premiums.

Aetna actually made a profit in 2009 but not at levels that it anticipated.

"They were surprised by an acceleration in medical costs in 2009 which pressured their earnings," Josh Raskin, an industry analyst for Barclays Capital, told the Huffington Post. "In an effort to get back to a more profitable level, they are raising their prices to match cost trends. When you raise rates, you run the risk of losing your membership. Health insurance is a very competitive marketplace."

As Williams told investors on the call: "The pricing that we put in place for 2009 turned out to not really be what we needed to achieve the results and margins that we had historically been delivering."

Aetna is one of the largest insurers in the private market, covering roughly 17.7 million people according to its 2008 annual report. It is also a major player in the current health care debate and inside Washington D.C. The insurance company has spent more than $2 million on lobbying just in 2009, according to the Center for Responsive Politics.

Read more: http://www.huffingtonpost.com/2009/12/04/aetna-forcing-600000-plus_n_380130.html

[ThomCat]

1. This is Evil!

They are going to cut the people who use their insurance the most, the people who need their insurance the most. They are going to boost their profits by deliberately throwing the elderly and people with disabilities off their rolls, and then charging younger healthier people more money for insurance policies they don't use or rarely use.

:grr:

[boppers]

2. This is Capitalism!

They're putting profits over people. Which is their job.

This is why we *NEED* more non-profit health care. I don't give a damn what it's called, be it "public option" or "co-op" or "magical fairy care".

[DrDan]

12. exactly - and will be applauded by sean hannity, neal boorz and the

and the other reagan disciples

[Daemonaquila]

17. Capitalism = Evil

Non-profit healthcare won't solve anything - they also look at their bottom line and raise prices. I was the VP of a corporation for a number of years, and every year had to review the price hike demanded by our group insurer and look at other offerings from for-profit and non-profit insurers as alternatives if we couldn't come to a more reasonable increase (often 15% in one year!!!) than they wanted. The non-profit vs. for-profit claim is a racket; the non-profits were raising prices and cutting certain benefits just as much as the others.

A centrally run public option - and moving into true single-payer mode - is the real answer. As long as insurance companies, whether co-op (which already basically exists for workers' comp insurance in some states) or some other model, run the programs, the customers will be screwed. As long as the companies can game the system somehow by making it difficult to get certain kinds of care, restrict access, provide lesser benefits for certain kinds of care or prescription, etc., etc., etc., they'll be doing it. What it's called is important, because it usually describes how they're screwing you.

[tinrobot]

3. Many of these people will die without insurance

But Aetna will make it's "expected" profit.

[eridani]

4. This calls for a trigger option

Put the CEOs up against a wall first.

[boppers]

21. They had their chances.

They screwed the public again, and again, and again.

No more second, third, fourth, fifth chances...

[avaistheone1]

5. Most countries make it illegal for insurance companies to make a profit off of

primary care health insurance.

I wish America could be more civilized and treat her people with better care. I thought we are supposed to be the greatest nation on earth.

[napi21]

6. I hope enough members leave that they actually lose money!

Maybe that will show the capitalist system that there has to be an end to how much profit you can continue to increase!

[earth mom]

7. Great Health Care Plan you got there Obama. NOT!!!!!!!!!!!!!!!!!!!!!!!!

:grr:

[rpannier]

10. I disagree

He has a great Health Care Plan as do all federal employees

Obama has had a great health care plan since he was elected as a state representative

[winyanstaz]

8. End the bloodthirsty health insurance now....

They are killing people.
They have failed. Time for better healthcare and a public option.

[havocmom]

9. Ah, the 'take the money & run' business model

Mandates are gonna mean indentured servitude for a lot of people PDQ.

[aquart]

11. This is murder. Depraved indifference to human life.

[safeinOhio]

13. How can a company with zero risk

think it should get a profit over 1%. It can't fail because it only has to raise rates to stay in business, let alone show a profit.

[waronbanks]

14. Can I ask a question?

When are we Americans going to march to Washington and demand an end to this criminal and evil industry? we really DONT have to take this. We really do ultimately have the power to bring these slimy weasels down so why do we just sit back and take this?

I just do not get Americans unwillingness to put a stop to the systematic stealing of our hard earned money.

[PuraVidaDreamin]

15. I've got one answer for you

Some of us are planning to do just a bit more than that

http://peaceoftheaction.org/


ps- Welcome to DU

[Daemonaquila]

18. Marching to Washington won't do it.

Marches on Washington are great press and great fun, but this is the sort of issue that needs much more deliberate, concerted action. It needs people to keep their murderous practices in the media spotlight day after day. It needs people across the country with well-organized talking points lobbying for regulation moving toward dismantling of insurance companies at the state and federal level. It requires outing specific insurers for specific unethical practices.

We take this because we're Americans - we have been conditioned that we can't fight city hall, and that it would be just too hard to play Don Quixote. It's relatively easy to get on a bus to DC, but it's much more complicated to think strategically and do the work month after month. It's easier to worry about "first things first," like making enough money at that McDonald's job to pay rent, and then come home too exhausted to think or act. As long as there's Wal-Mart for the cheap flat-screen TV and a lottery ticket to be bought at the corner store with the dream of being magically transported to a life of comfort, most Americans are not going to rise up. Until some troublesome jackass with a plan and the determination to organize on a grand scale gets uppity, anyway...

[waronbanks]

20. You are correct...

A march is the wrong word...OCCUPATION is whats needed. we go and we dont leave until there is action to STOP THIS EVIL AGAINST THE POPULATION.

[annabanana]

16. The tin ear that this displays makes it clear to me that they feel no threat

from public opinion. If they thought that the American People actually had any power, they would do everything in their power to hide this move.

[grilled onions]

19. "..Surprised by the acceleration in medical costs"

Really????? ...Which pressured their earnings??? How would they like to live on a fixed income,exisiting paycheck to paycheck, trying to pay for healthcare,meds while still staying above water??? They haven't a clue. When was the last time you heard of ANY person/family operating at a profit??? Yet these same people are expected to absorb higher and higher costs to keep the insurance companies, not just profitable, but profit to their "expectations"!!!!!