September 27, 2023

And now a word about our union "collaborators"

Obviously the situation has calmed down and we’re not being shoved into a plan that so many people have objected to for the moment, though I’m sure they’re working on it. 

When I say “collaborators,” I mean CVS/Aetna of the proposed but stalled new plan, and Cigna for our dental arrangements, though that one has not yet been structurally tweaked. 

So I was interested to read Wendell Potter’s recent essay on the size of the revenues that seven of the big health insurers have reported. Why am I not surprised that our two are included in this super avaricious group of megacorporations. 

Potter warns that “Wall Street’s unhappiness goes a long way toward explaining the double-digit premium increases many American employers and families will be hit with come January 1, 2024.” 

Investors don’t seem to have been satisfied with the profits the insurance companies have been making this past year, at a time when many of them used AI and other means to deny coverage for needed care and reject legitimate claims en masse. Potter tells us that revenues and profits did, in fact, rise.
As a group, the companies (Centene, Cigna, CVS/Aetna, Elevance/Anthem, Humana, Molina and UnitedHealth Group) saw their total revenues increase from $618.2 billion in the first half of 2022 to $683.8 billion during the same period this year.

In spite of profits up from $37 billion to $40.2 in a year, investors thought they’d better shift their money elsewhere to get an even better return on investments. That resulted in the stock prices of these companies going down this past year: while Dow, S&P, and Nasdaq shares went up, Cigna’s went down 23.2% and CVS/Aetna went down 27.7%.

“It’s not that the companies aren’t growing. It’s just that at least some of that growth has not been as profitable as Wall Street demands.” Apparently, these companies were paying more in claims than Wall Street was finding “acceptable.” 


Because, as Potter says, “most of the companies’ growth continues to come from the taxpayer-financed Medicare and Medicaid programs.”  

And because 3 of them – our Cigna and CVS/Aetna buddies plus UnitedHealth – control 80% of the Pharmacy Benefit Manager (PBM) market and now operate their own practices and clinics, they can shift monies around to keep their medical loss ratio low (which means less spent on our health care and more on overhead and profits.)

Here’s Potter’s scary conclusion:

To get back into Wall Street’s good graces, you can expect the companies to try to squeeze more money out of their commercial customers in the form of higher premiums and out-of-pocket requirements; boost enrollment in their Medicare Advantage and Medicaid plans; and refuse to pay for more doctor-ordered care and medications.

But you can read the whole thing yourself if you want to know more specifically why you’re about to throw up.