On 23 March, 2010, President Obama signed a health care reform bill that came in effect on 1 January, 2011. This Law will help senior citizens having cancer, heart diseases or diabetes to get check-ups and detect their problems at early stages, so that faster treatment could help reduce the chances of long-term complications, which may cost people their life.
Moreover, Insurance companies must stop looking towards their insured with greedy eyes.
Charges on Premium Dollars for Medical Services
The companies that provided insurance to small group and individual policies now need to give 80% of their premium dollars on medical services. Previously it was very easy for insurance companies to pocket high profits without being accountable for their actions or for the level of services provided to the insured.
The insurance for large group policies will be contributing 85% of premium dollars for the medical services provided to the insured. The insurance company that will fail to meet this requirement will be liable to pay rebate to its policyholders.
Drawbacks
According to AFL-C10, the profits recorded for the country’s top ten largest publicly traded insurance companies rose by 45% in 2007, since the year 2000. This was because the clients or the policyholders paid more cost for less benefits, services and coverage.
Lack of Competition
One of the recent studies declared that one major reason for these happenings is the increasing lack of competition among the private health insurance industry that has resulted in near monopoly conditions in the market.
Withdrawal of Policies
Between 2003 and 2008, three large insurers withdrew almost 20,000 policies in order to avoid paying claims; it made them save $300 million in the process. These policies were often used to avoid helping people who would die due to no treatment or surgery of diseases such as cancer, heart or other serious medical problems.
Insurance companies earn more than what they deserve and for the services that they provided to the policyholders. The greedy executives only thought of their profit not of the benefit the customer would be getting.
To keep the level of income flowing and to see that the customers get what their right is dutifully theirs, Government intervened and approved the Health Insurance Reforms for the insurance companies.
CEO Compensations
Before you get to any decision in favor of insurance companies, just take a look at the salaries paid in 2007-8, to the CEOs’ of various Insurance companies:
- Ronald A. Williams from Aetna, had a salary of around $23-$24 million,
- H. Edward Hanway from Cigna, had a salary package of $25 million,
- Dale B. Wolf from Coventry, had a salary of around $14-$9 million,
- Jay M. Gellert from Health Net, had a salary of $3.5-$4.5 million,
- Michael McCallister from Humana, had a salary of around $10-$4.5 million,
- Stephen J. Hemsley from U.Health Grp, had a salary of about $13-$3 million,
- Angela Braly from WellPoint, had a salary package of $9 million, respectively.
