Seven medical insurance CEOs raked in a record $283 million last 12 months


The CEOs of America’s seven largest publicly traded medical insurance and services corporations cumulatively earned greater than $283 million in 2021 — by far essentially the most of any 12 months previously decade.

Soaring stock prices overwhelmingly fueled executives’ fortunes, in accordance with a STAT evaluation of annual proxy disclosures from UnitedHealth Group, CVS Health, Anthem, Cigna, Humana, Centene, and Molina Healthcare dating back to 2012.

Higher profits drove those corporations’ stocks. The coronavirus pandemic has led to people delaying care, leading to insurers retaining premiums that otherwise would have been paid out as medical claims. Years of huge acquisitions also began paying off, as medical insurance corporations have morphed into conglomerates that also encompass lucrative drug advantages middlemen, physician groups, pharmacies, and a bunch of other services and providers.


Experts argue the pandemic must have spurred insurers to do more to maintain the country’s health care prices in check. But as an alternative, taxpayers, employers, and staff have continued to stomach higher health care premiums.

“If that group of seven individuals were delivering what they ought to be delivering to the American people, I’d don’t have any problem paying them $283 million,” said Ted Doolittle, Connecticut’s health care ombudsman and a former federal health care official. “What they ought to be delivering to Americans is not any increases to their health care expenses. They ought to be focused on the costs they’re paying to pharma and hospitals, particularly, but they’re not. So that they’re being rewarded for the incorrect thing.”


Roughly 87% of insurance executives’ pay last 12 months got here from exercised and vested stock, the evaluation shows. Cigna CEO David Cordani took home greater than $91 million in 2021, essentially the most of any insurance executive. He’s registered $366 million since 2012. Cigna didn’t reply to requests for comment.

Longtime UnitedHealth executive Dave Wichmann technically earned essentially the most last 12 months, with $142 million, nearly all of which got here from exercising his stock options. But STAT didn’t count Wichmann’s total toward the evaluation because he abruptly left as UnitedHealth’s CEO in early 2021. UnitedHealth declined to comment and referred to its proxy document for all questions.

A CVS spokesperson said in a press release that “the overwhelming majority of executive compensation is performance-based. In other words, our leaders profit when shareholders and a broader set of employees profit.” The opposite insurers didn’t reply to a request for comment.

The figures were calculated through the use of the actual realized gains of stock options and awards, as an alternative of the estimated fair value of those options and awards that’s more commonly reported. The massive paydays line up with how stocks’ values increase over time, Alex Edmans, a finance professor on the London Business School, told STAT in an email. If executives stay at an organization for a very long time, as many inside the medical insurance industry have done, and if stock prices march upward, windfalls follow.

Every insurer except Cigna and Humana outperformed the Dow Jones and S&P 500 last 12 months. CVS is the one company that has lagged behind the market since 2012.


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The insurance CEO payouts are amongst the best in health care, but executive pay is a relative drop within the bucket for a rustic that spent an estimated $4.3 trillion on health care in 2021.

“There’s a bent to scold ‘greedy’ insurance firms,” said Cynthia Cox, a vice chairman on the Kaiser Family Foundation who studies medical insurance markets. “I don’t think that’s without merit, but the issue with how much we spend on health care goes well beyond how much insurance company CEOs are paid.”


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The insurance industry, broadly, is built on relatively perverse incentives. Hospitals, doctors, drug corporations, medical device firms, and other providers have consolidated and bulked up their bargaining muscle to charge higher prices to the 155 million individuals who get medical insurance through a job, but insurers have been lousy negotiators, experts say.

Some market dynamics are out of insurers’ control, corresponding to when hospitals control the market and have to be included in networks. But insurers will earn more money if prices and costs don’t decelerate — which implies it’s not of their interest to haggle for the most effective deals and puts them directly at odds with the employers that hire them. More profits results in higher stock prices, which lifts executive pay packages.

“Employers usually will not be well-served by the carriers,” said Sabrina Corlette, a medical insurance researcher and professor at Georgetown University. “The motivation structure is tousled. At a certain point, when is the employer community going to start out storming state capitals and Congress with pitchforks?”

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There’s some hope federally mandated price transparency amongst hospitals and insurers will peel back more of the secrecy behind negotiations for those in business plans. Corlette said there may be a growing “cottage industry of vendors” which can be crunching the info and informing corporations of the raw deals they’re getting. For instance, price transparency startup Turquoise Health just raised one other $20 million to assist with more health care contracting that’s based on transparent prices.

But transparent prices won’t solve imbalances in market power, nor will they solve whether some insurance firms roll over on the negotiating table when their pay packages encourage them to accomplish that.

“There’s no ability on the insurance company side to get internationally normal prices, they usually’re not being held to account for that failure,” Doolittle said.


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