How A lot Are Insurers Winning Beneath Obamacare?

Despite the gloom and doom of Obamacare predictions, capitalism is alive and effectively in the wellness care marketplace. In the first quarter soon after the insurance coverage provisions of the Affordable Care Act have gone “live,” the insurers are now releasing their earnings reports. How is it looking so far? Excellent for the insurers, not so excellent for the insured. I show why it matters.

• WellPoint WellPoint beat earnings estimates by twenty cents a share and raised earnings estimates for the year. From their press release, “Our membership is developing across our platforms and we are pleased with the progress we have seen in the exchanges.” Their dividend paid to traders will be $ .4375 per share, which on an annualized basis final results in $ 493.6 million paid to shareholders in 2014.


• Aetna Aetna reported earnings of $ 1.98 per share, which is an enhance of 27% in excess of the first quarter of 2013. From their press release, “Aetna posted higher operating earnings, working revenues and health care membership in the first quarter, each representing historic highs for our business.” They repurchased six.five million shares for $ 465 million in the very first quarter. Their dividend paid to traders will be $ .225 per share, which on an annualized basis outcomes in $ 330.75 million that will be paid to shareholders.


• Cigna Cigna reported a income increase of 4% in excess of the first quarter of 2013. From their press release, “Results in the very first quarter of 2014 reflect solid revenue development, disciplined expense management and continued powerful medical price management.” 12 months to date, Cigna has repurchased $ 425 million in stock. The dividend payout is $ .04 per share annually, or $ ten.75 million that will be paid to shareholders.


• UnitedHealthcare’s very first quarter earnings in fact fell 7.8% but they still had a revenue of $ one.ten per share, or $ 1.one billion. Revenue rose 4.5%. The annualized dividend is $ one.12 and outcomes in $ one.116 BILLION that will be paid to shareholders in 2104.

1 big difference in between the U.S. well being care program and other countries is that we are the only country that relies so heavily on for-profit insurers. For instance, in Switzerland, revenue need to be utilised to decrease premiums. The 4 organizations I listed will pay out a complete of $ one.951 BILLION in dividends to shareholders in 2014. This does not count all the billions utilised for share buybacks. Insurers need to have somewhere to put that cash.

If revenue have been utilised for health care rather of payouts to shareholders, what would we get? Contemplate this – a local community well being center can provide primary care for one particular grownup for $ 687 per yr. If we use the $ one.951 billion from just these 4 businesses to fund local community health centers, we could supply principal care to two.84 MILLION folks. And feel about how several men and women we could cover if we throw in the earnings from the rest of the insurance companies and all the funds insurers are utilizing to buy back their shares. I would dare to say we could give simple care to many of the uninsured.

Capitalism is what constructed this country and we should stability the wish for revenue with maintaining our nation powerful. Our wellness care program is the most expensive in the globe by far and we are not any more healthy despite all the income we devote. Good health improves productivity. And to invoke Piketty, the money paid to shareholders in the form of dividends and share buybacks is incorporating to capital and is not getting reinvested in society. The end result – an additional spigot flowing into the bucket of earnings inequality.

Do men and women care about income inequality? If you asked individuals in the street, they probably care much more about a fair revenue which puts meals in their belly, a roof more than their head, and improves their health. And if individuals with the capital are sensible, they would care about that also. Content, healthier normal people develop a more powerful and much more productive nation. Investments back into men and women and their overall health would make the income proceed to flow.

So what do we do to be honest to the insurers and their want for revenue in a nation that defines capitalism? Take standard overall health out of the for-revenue insurer’s realm. Provide a base of care not tied to insurance coverage to everybody in this nation. Make catastrophic insurance non-revenue. And then, let insurance coverage firms to make their income on the “niceties” through supplemental plans – personal rooms, care that is not regarded proof primarily based (do you actually need that back surgery,) once a day ease drugs instead of twice a day generics, “full court press” for futile circumstances, and all the other pointless overall health care expenses that the men and women in this country can not seem to be to do with out.

The Affordable Care Act was a great route to a single thought that will stick in this nation – no a single ought to be turned down for well being coverage based mostly on wellness standing. If the law can stay intact extended ample for this to be ingrained in our culture, it will be nicely well worth the pain. Nevertheless, it was set up to supply continued outlandish rewards to for-revenue insurers at the expense of the well being of our nation. This is what wants to adjust.

Queries, comments? Post right here, reach me @CarolynMcC, or Carolyn.mcclanahan@gmail.com. I’m on the road a lot, and I enjoy your persistence with the timing of my reply.

How A lot Are Insurers Winning Beneath Obamacare?