Saturday, December 5, 2009

Aetna, I'm Glad I Never Met Ya

Not since Nero fiddled while Rome burned has anyone in a position of national leadership been dithering so much while a bad problem has grown worse with regards to the health care debate. As Harry Reid valiantly tries to get a health care reform bill with a public insurance option through the Senate so a bill for President Obama's signature can be worked out with the House - in the face of Republican and conservative Democratic opposition - Aetna, one of America's most ubiquitous insurance companies, has decided to drop 650,000 clients next year to increase their profit margin.
The Connecticut-based insurance firm is also raising rates on those who will continue to have coverage to secure larger profits, adding insult to injury. What's really stupefying is that Aetna has admitted as much, rather than hide behind some flowery language about the need to remain competitive and ensure quality service. Aetna CEO Ron Williams confessed to Aetna seeking greater profits in this not-so-cryptic statement: 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. 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."
Here's the clincher: Aetna still made money in 2009, but the firm was taken aback by how much medical costs ate into the health insurance end of the business. So, not satisfied with a modest profit, Aetna wants to make even more money to please its shareholders. Sound like a fair deal to you? It is, except for the clients who can expect to pay higher premiums and the 650,000 people losing their coverage - most likely, people who tend to be more chronically ill and in greater need of care.
Aetna has pulled this trick in the past. Here are the statistics, courtesy of the Huffington Post, offering the proof: Aetna overhauled its business between 2000 and 2003, starting with 21 million members in 1999 and going down to 13 million by 2003, but increasing its profit margin from about 4% to higher than 7%.
President Obama will not change the trajectory of this country unless he puts it on the path to greater public investment in and administration of economic sectors normally controlled by private enterprise. Publicly used utilities such as telecommunications, home heating and electric power are obviously not going to be deprivatized, and as much sense as such an initiative would make, it ain't gonna happen - not now, anyway, and probably not ever. Woodrow Wilson could not nationalize the telephone system, and Franklin Roosevelt couldn't deprivatize the electric and gas companies. Health care is where Obama has wisely chosen to make a stand. The privatized health care system is costing us more money than other privatized public services, and Aetna is Exhibit A of how greed is getting in the way of meaningful reform to lower costs and provide quality health care service. There's one proven way to accomplish this. But, since single-payer medical insurance is out of the question - this ain't Canada, buster! - passage of a public option is the best hope for the time being.
Harry Reid can accomplish this by doing two things - move the bill to reconciliation and tell Joe Lieberman, the independent Democrat from Aetna, to put up or shut up.

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