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Blue Cross clout pays off – for millionaire Blue Cross execs

Published on October 1, 2015 by in News

al_com_logoBy: John Archibald



It’s good to be the king. The big blue king that rolls around on his pile of money and uses it to grab even more.

Think about it.

Just two years ago, the federal Department of Health and Human Services looked at the way Alabama reviewed health insurance rates, and said …


It doesn’t work. It is ineffective. And since Blue Cross Blue Shield of Alabama has a virtual monopoly on health insurance in the state, it meant Alabama regulatory reviews of Old Big Blue were just as …

Ugh. Ineffective.

And now look how far we’ve come.

The top 10 executives at Blue Cross Blue Shield have been very good to themselves in recent years, doubling their own pay between 2011 and 2013. In 2013 – the last year available — they each made more than a million bucks, a combined $19.2 million.

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Want to see what Alabama insurance executives make? New law says that’s secret

Published on September 29, 2015 by in News

By Amy Yurkaninal_com_logo

If you want to know what the CEO of your health insurance company earned last year, don’t ask the Alabama Department of Insurance.

That information is no longer public – because of a new law that shields much of the information used to review the state’s insurance providers. The law reverses an open-book policy that had been in place for years.

Officials with the Alabama Department of Insurance sought the change during the regular legislative session – in an effort to comply with the requirements of an organization that accredits insurance regulators, said Chief of Staff Mark Fowler. The bill initially made work papers confidential, but included salaries after conversations with members of the insurance industry.

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Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights: Examining Consolidation in the Health Insurance Industry and its Impact on Consumers

Published on September 27, 2015 by in News

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Health Insurers Aetna, Anthem Defend Deals, Say Markets Will Stay Competitive

Published on September 23, 2015 by in News

By Anna Wilde Mathews and Brent Kendallwsj


The Wall Street Journal

The chief executives of Aetna Inc. and Anthem Inc. defended their merger deals before a Senate subcommittee, facing sharply critical testimony that raised questions about the impact of health-insurance consolidation.

Aetna is seeking to acquire Humana Inc., in a $34 billion transaction focused largely on the private Medicare plans known as Medicare Advantage. Anthem aims to take overCigna Corp. in a $48 billion deal. The two deals together would shrink the top five U.S. health insurers to a big three, each with annual revenue of more than $100 billion. The third player would be UnitedHealth Group Inc.

In their testimony before the Senate Judiciary subcommittee on antitrust, Mark T. Bertolini of Aetna and Joseph R. Swedish of Anthem emphasized that health care is delivered largely on a local basis, and they argued that markets would remain competitive if they completed their mergers. Both CEOs also said their deals would benefit consumers and encourage new forms of payment to health-care providers.

Mr. Bertolini said just 8% of Medicare beneficiaries would be covered by the combined Aetna-Humana, and “robust competition will remain in the Medicare market.” Mr. Swedish said Anthem and Cigna had “very limited and, in most cases, no market overlap.”

But other witnesses were skeptical of the deals’ potential benefits. Leemore Dafny, a professor at Northwestern University’s Kellogg School of Management, said consumers are “paying a premium on our premium” because of lack of competition among insurers.Richard J. Pollack, CEO of the American Hospital Association, said his group was concerned the insurance deals would reduce choices and raise costs for consumers.

Sen. Al Franken, a Minnesota Democrat, grilled the two insurance CEOs on whether they would commit to passing along any savings from their deals to consumers, asking repeatedly for such a pledge. After the question was repeated three times, Mr. Bertolini said the “savings will be passed along in the price of our products.” Mr. Swedish also promised savings. But Sen. Franken noted that he ran out of time to continue, and said, “We could have gone quicker if those answers were yes.”

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Doctors’ Association Sees Harm in Insurance Mergers

Published on September 21, 2015 by in News

the-new-york-times-logoBy Robert Pear


NY Times

WASHINGTON — Doctors and hospitals are stepping up their criticism of proposed health insurance company mergers.

In a new study to be released on Tuesday, theAmerican Medical Association says that most insurance markets in the United States are dominated by a few companies and would become even more concentrated with a plan by Anthem to acquire Cigna and a proposal byAetna to buy Humana.

The American Hospital Association raised similar concerns last week in a letter to the Justice Department that said the proposed Aetna-Humana deal “threatens serious and widespread competitive harm” to Medicarebeneficiaries because it would reduce options in the market for private Medicare Advantage plans. More than 30 percent of the 55 million Medicare beneficiaries have enrolled in such private plans, which provide an alternative to traditional Medicare.

The doctors’ group said the proposed mergers could reduce competition in up to 154 metropolitan areas in 23 states.

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Alabama cities lack competition for health insurance, study says

Published on September 16, 2015 by in News

By Amy Yurkanin



Gadsden has the least competitive health insurance market in the country, according to a recent report by the American Medical Association.

More than 90 percent of its residents get coverage from Blue Cross Blue Shield of Alabama, according to Becker’s Hospital Review.

Other cities in Alabama fall close behind Gadsden. In fact, nine of the 11 cities tied for the top five least competitive health insurance markets are in Alabama.

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Regulators Need to Scrutinize Health Insurance Mergers

Published on September 14, 2015 by in News



By: The Editorial Board

The New York Times


Two proposed mergers involving four of the nation’s biggest health insurers could reduce competition in an important industry. That’s why federal and state regulators need to closely study these deals and, if necessary, force the companies to sell some parts of their businesses.

Earlier this summer, Anthem agreed to acquire Cigna for $48 billion, andAetna announced a $37 billion takeover of Humana. The antitrust division of the Justice Department and state governments are reviewing the deals. If regulators approve both transactions, the number of big national health insurers would drop from five to three.

The companies say that being bigger will give them the ability to negotiate lower prices with hospitals, physicians and drug makers and make health care more efficient. Not surprisingly, trade associations representing doctors and hospitals are not thrilled by that idea. They say these mergers will not only hurt them, but will hit consumers with higher premiums and other costs.

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Big hike in executive pay at nonprofit Blue Shield draws state scrutiny

Published on September 2, 2015 by in News

By Chad Terhunela times logo


Los Angeles Times

Nonprofit insurer Blue Shield of California boosted executive compensation by $24 million in 2012 — a 64% jump over the previous year — according to a confidential state audit reviewed by The Times.

The health insurance giant won’t say who got the money or why. But Blue Shield’s former public policy director, Michael Johnson, who left this year and is now a company critic, said senior officials at the insurer told him that former Chief Executive Bruce Bodaken received about $20 million as part of his 2012 retirement package, on top of his annual pay.

Half a dozen other top executives also left the company near the end of 2012, which could have accounted for some of the spike in compensation. Some of this severance or retirement money may be paid out over time, extending beyond 2012.

The San Francisco insurer declined to confirm the total compensation for Bodaken, who was chairman and CEO from 2000 to 2012.

The audit’s tally of $61 million in pay for nearly 60 executives in 2012 appears to include Bodaken and others who left. But Blue Shield omitted their pay from a separate state filing that required 2012 compensation data on the company’s 10-highest paid employees.

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Health insurance is staggeringly uncompetitive in America, and is poised to get even worse for everybody

Published on August 28, 2015 by in News

By: Max Niesen



With two major health insurance mergers pending, the US may be headed for a healthcare market with only three major private health insurers, down from the five that exist now.

 Critics argue that the pending mergers of Anthem with Cigna and Aetna with Humana will further reduce competition. But when it comes to private Medicare plans— the national social insurance called Medicare Advantage (MA) that uses private health insurers—the lack of competition is already awful. Ninety-seven percent of American counties have little or no plan competition, according to a new reportby The Commonwealth Fund, a US healthcare research foundation.
Many of the counties are sparsely populated rural areas. But even within the 100 largest counties by number of Medicare beneficiaries, 81% aren’t competitive, according to the report. Seventy-seven percent of seniors enrolled in MA live in noncompetitive counties.

The report measured competitiveness based on the Herfindahl-Hirschman Index, which classifies markets as non-concentrated, moderately concentrated, or highly concentrated based on the the number of firms within the area and their market share. The Federal Trade Commission uses the index to classify markets for antitrust purposes.

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Status Conference held in MDL 2406: In Re: Blue Cross Blue Shield Antitrust Litigation

Published on August 20, 2015 by in News

Judge David Proctor of the Northern District of Alabama held a status conference on August 19, 2015 in MDL 2406: In Re: Blue Cross Blue Shield Antitrust Litigation. The Court heard suggestions from the parties on streamlining the case.

Joe Whatley co-lead counsel for the provider plaintiffs noted ”While we continue to push to move this important case forward efficiently and as quickly as possible, the Blues continue to try to delay the case to protect their excess reserves and profits that they reap by imposing artificial lines on competition. We look forward to a ruling from the court on our proposal to streamline the proceedings to accomplish these goals.”

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© Whatley Kallas BluesAntiTrustLitigation