In 2021, the CEOs of America’s seven largest health insurance companies cumulatively earned more than $283 million in 2021 — by far the most of any year in the past decade, according to this story in statnews. The CEO of UnitedHealthcare alone earned $142 million, largely from exercising his stock options after he left the company last year. Second in line was the CEO of Cigna, who took home more than $91 million in 2021.
To my mind, these stratospheric salaries are outrageous. They help explain why our health care premiums keep rising every year and why health care in the United States is so expensive. It’s the best argument I’ve seen for why we need to get rid of for-profit entities in our medical system and expand universal health care to include everyone, not just people over the age of 65.
Health insurance CEOs did particularly well last year because they were rewarded with stock options, and the stock market performed well in 2021. Yet as the Statnews article explains, such incentives actually encourage insurance companies not to negotiate for lower health prices because ” insurers make more money if prices and costs don’t slow down.” According to Statnews:
“For example, federal law says health insurers can only retain 15-20% of premiums for profit and overhead. That sounds good in theory, but it could actually encourage insurers to let spending and premiums grow, because they’ll be able to keep a slice of a larger pie.”
This is madness and we all suffer because of such perverse incentives. There’s a reason why we are only one of two developed nations in the world that allow for-profit companies in health care. It’s time for the U.S. government to cut for-profit insurance companies and hospitals out of the picture and invest in universal health care for all. That’s the only way to keep medical prices down and ensure that all Americans can afford quality health care.
This blog is also posted on medium.com.
