Photo (cc) by Neubie
Like most other consumer reporters, I’ve been doing stories about health care reform in an effort to help others understand it. My overall position: I don’t know whether the recently enacted reforms will help or hurt over the long term, but I can absolutely assure you that some kind of reform is needed.
Most recent evidence? My personal health insurance bill went up 40% this year. And this week I learned that the CEO of the company that issued my policy, United HealthCare, personally received more than $100,000,000 in compensation last year alone.
That’s enough to pay a $500 monthly insurance premium for a full year for nearly 17,000 families. That’s the entire average annual household income of 2,000 American households.
According to this article in the Washington Post, United Healthcare CEO Stephen J. Hemsley exercised 4.9 million stock options in February 2009 at a personal gain of $98.6 million. While the transaction took place last year, it wasn’t reported until the evening of April 15, 2010.
The options exercised by Mr. Hemsley last year were issued 10 years before. According to the Post, the company reported that he just exercised the options and didn’t sell his new stock. So he hasn’t actually pocketed that 100 million just yet. What Steve did pocket last year, however, was $8.9 million in other compensation, up from $3.2 million in 2008.
I’m a capitalist and supporter of free markets, so how can I complain about how much a CEO gets paid? I can’t. Not ordinarily, at least. But these aren’t ordinary circumstances. Ordinarily, I can express my outrage by voting with my feet and choosing a different insurer. But my state-controlled insurance choices are extremely limited, so that’s not really an option, especially since I’d probably find the same prices and compensation policies at other companies. Ordinarily, I can simply bypass a product that gets too expensive, but since this one is integral in keeping me alive, that’s not really an option. Ordinarily, a company wouldn’t be so brazen, callous, or frankly, dumb, as to raise it’s prices by 40% in one year (to me, at least), call the increase necessary due to “rising health care costs,” then hand more than $100,000,000 to a single employee.
But these aren’t ordinary times. They’re times of reform, and in my opinion it’s reform that’s long overdue. What’s your opinion?