In a study sure to raise the stakes in its battle to regulate HMO spending, the California Medical Association has released a study concluding that California health plans generated $4.3 billion in profits last year, while in some cases paying their executives high salaries. It also noted that HMOs spent $6 billion on administrative costs last year--including some high executive salaries--which it contends should have gone toward lower premiums or better benefits. It singled out annual salaries topping $1 million for CEOs at Aetna, CIGNA, Health Net, UnitedHealth Group and WellPoint.
The report comes as part of the group's longer-term campaign to enact laws governing how health plans spend their money. The association is backing a bill which would require health plans to spend at least 85 percent of their annual income from premiums on medical care. The CMA study notes that if the bill were already in place, almost $1.1 billion dollars would have been spent on patient care.
To learn more about the study:
- read this San Francisco Chronicle article
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