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In an incredibly arrogant disregard for their consumer clients, Wellpoint (the parent company for numerous state Blue Cross insurance programs) has decided that its top executives just aren't making enough money. After all, Wellpoint's CEO, Angela Braly (pictured), was only being paid around $8.7 million a year. How on earth could she possibly live on such a paltry salary?
To take care of this "underpaid" employee, Wellpoint has raised Braly's salary a whopping 51% -- to about $13.1 million a year. In addition, at least three other of the company's top executives have received salary boosts of around 75%. Those are some pretty nice raises in a time of recession. I'll bet the rank-and-file workers (the people who do the actual work for the corporation) didn't receive a 50% to 75% raise.
And how did the corporation pay for these astronomical raises? Simple. They raised insurance premiums on their customers. Remember, it was Anthem Blue Cross (a Wellpoint company in California) that recently raised its rates by an incredible 39%. It turns out that their Blue Cross companies in at least eleven other states have also raised premiums by double digit percentages. The corporation claimed they had to raise their rates because of rising medical costs.
Wellpoint claims the raise for its top executives were just to maintain their "gold standard of excellence". Company spokesman Jon Mills said, "Wellpoint wants to attract and retain top talent. In order to be the best, to be innovative, to continue delivering the best service, we do have to retain the best quality. We are in no way trying to inflate the salaries and compensation figures but trying to maintain a high level of talent at the organization."
What a load of unadulterated horse manure! I'm surprised his nose didn't grow several inches as he said that (and I wonder how big his own raise was). Does he really think the American people are stupid enough to believe a competent and talented CEO couldn't be hired for less than $13.1 million a year -- a lot less? I think by "gold standard of excellence" he's referring to the excellent amount of gold in executive bank accounts.
You may be asking how the company is going to fit such large pay increases into the cap on administrative costs required by the new health care reform law (which limits administrative costs to 15%-20%). No problem there. Wellpoint has already informed its investors that it will just reassign some administrative costs as medical costs (and thereby skirt the intent and meaning of the new law). They'll just do a few accounting tricks, and then it's back to business as usual.
And don't get the idea that Wellpoint is the only insurance company pulling these kind of shenanigans. They are just the most brazen. Aetna and Cigna have announced they will also be raising the cost of premiums for their consumers, and you can be sure the other companies will soon follow suit.
This points to the big failure of the new health care reform law -- it failed to cut out or control the profit motive in health insurance. It doesn't take a genius to figure out the giant health insurance companies aren't in business to pay for their customers' health care. That's only a secondary concern at best. They are in business to make huge profits -- the bigger the better. And if they have to abuse sick people to do it, so be it.
The new health care reform law did a few things that were badly needed, but it did not truly reform the system. That won't happen until we have a public option for insurance (which will put pressure on private companies to keep premium prices down to compete).
Originally posted by kozmo
Good to see that Healthcare Reform Bill working out!
And just imagine having to live off a paltry $8 million a year... I mean, really, who lives like that?
Originally posted by OnceReturned
Just don't buy their products or services if you don't want them to have your money. If you want their products, you have to pay them. It's that simple. If a company is doing bad business and charging too much, their customers can always choose to stop buying what they are selling. Everytime someone gets rich in America it is because people gave them the money.(And if you're going to say, "Well that's not true, what about the wallstreet bailouts?" I would ask you, "Who elected to the officials who gave the companies the money?")