The five largest for-profit health insurers reported combined net income of $3.2 billion in the first quarter of this year, up 31% over the same period in 2009, according to a new report by Health Care for America Now, a consumer advocacy group.
Consumer group cites rise in insurer profits
In releasing the report, the group held a call with reporters and Democratic Sen. Dianne Feinstein of California and Rep. Jan Schakowsky (D-Ill.), who are sponsoring a bill that aims to tamp down health insurance rate increases.
The Health Insurance Rate Authority Act would give HHS the authority to block or change proposed rate increases and order insurers to pay rebates to customers. Twenty-six states do not have the authority to reject rate increases.
“There's nothing to stop these companies from raising premiums further,” Feinstein said, adding that the bill would establish a “federal floor” on insurance rates.
Aetna, Cigna Corp., Humana, UnitedHealth Group and WellPoint showed record profits in 2009, and saw increased income in the first quarter of this year, while premiums grew faster than medical costs, according to the report.
America's Health Insurance Plans, representing the insurance industry, said insurers had slim profit margins of 4.7% in the first quarter of 2010 compared with drugmaker profits of 22.7% in the same period.
Schakowsky said she isn't buying it. “What they are making is in excess of the cost of healthcare inflation,” she said. “It is not a credible argument.”
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