Nearly all of the largest publicly traded health insurance companies gave their CEOs a pay raise in 2018. That includes UnitedHealth Group, whose CEO David Wichmann's total compensation reached $18.1 million.
That's an increase of 4.3% over Wichmann's 2017 total compensation. Based on stock options exercised and stock awards that vested in 2018, Wichmann's realized compensation totaled $21.5 million. The company—which includes the nation's No. 1 health insurer, UnitedHealthcare, and the fast-growing health services subsidiary Optum—said in its annual proxy statement that Wichmann makes about 316 times the company's median employee salary.
Health insurer CEO compensation and company profits are topics fueling discussions about moving the U.S. healthcare system to a single-payer model to provide universal coverage to all Americans. Combined, the CEOs of the eight largest publicly traded insurance companies—including pharmacy behemoth CVS, which acquired insurer Aetna—made $143.5 million in total compensation in 2018, up 14.4%.
Meanwhile, those same companies recorded a combined $21.9 billion in profits in 2018 on revenue of $718 billion.
Some proposals, including the Medicare for All legislation championed by Sen. Bernie Sanders (I-Vt.), would eliminate private health insurance for almost all medical care. Sanders has pointed to insurance company profits and CEO salaries as evidence of a "dysfunctional" healthcare system, even holding up UnitedHealthcare as an example on Twitter. Health insurance companies, including UnitedHealth, have argued that Medicare for All would destabilize the healthcare system and limit clinicians' ability to practice medicine.
Meanwhile, CVS Health, which bought Aetna late last year, paid CEO Larry Merlo $21.9 million in 2018, an increase of 79% over the year before. Merlo's realized compensation dropped to $15.5 million from $26.7 million the year before largely because he did not exercise any stock options last year.
Merlo makes about 618 times the median employee salary at CVS, according to the company's definitive proxy statement.
Medicaid managed-care insurer WellCare Health Plans paid CEO Kenneth Burdick $12.7 million in 2018, which is the least of all the insurance company CEOs. Nevertheless his total compensation increased 11.9% over 2017. His realized pay soared 130.4% to about $21 million. Burdick made about 156 times the median employee salary at WellCare.
Modern Healthcare reported the CEO salaries of five other insurance company CEOs in March.
