ACA Cures Insurance Sector of Denial of Coverage, CEO Dividends & More

As a result, millions are forced into individually spending when seeking basic medical care and having no coverage when they need it most desperately. Under the ACA, some changes have been made to the pre-existing conditions pool of the people. Firstly, a PCIP has been created that will offer federal dollars to people who have pre-existing conditions and haven’t been able to secure coverage for themselves. This coverage will continue until 2014 when health care enrollment under the state exchanges is opened for the entire public. On the other hand, insurers have been asked to stop denying coverage on the pretext of pre-existing conditions. As a result, medical history of a person cannot be used as an excuse to seek exorbitant premiums or deny coverage.
Unrealistic ProfitsThe healthcare industry is valued at around three trillion dollars and a majority of the revenues are found among the insurers whose profit margins have been multiplying year-on-year. This is despite the fact that Americans in general have been struggling to get the basic medical care facilities like hospital visits or buy prescription medications in an affordable manner. The conclusion is rather simple—insurers have been earning a lot more by charging higher premiums and settling lesser and lesser claims and spending lesser on patient care to curb their expenditures. This fact is further underlined by the increase in profits of insurance firms even as the entire economy had sunk into the economic recession. Post-recession, profitability of the insurers continues unabated. While health insurance profits surge, those without jobs, those between jobs, those less than 65 years and hence, not fit for Medicare eligibility enrollment continue to suffer without any kind of insurance.
While families are struggling to undertake the most basic of medical tests and preventive services, pays for the CEOs across the biggest insurer firms have multiplied beyond the expectation of any industry analyst. The combined take-home package for the CEOs across famous insurance companies comes close to $1 billion in 2011 and this trend is expected to continue unless the healthcare reforms take a more stringent shape. The CEO pay has been rising because these people are not bothered with raising the quality of care. They prove their worth in the organization by turning away more claims and bringing more profits to the organization.
Unwanted BuybacksInsurance firms have been rather concerned about how to raise their profit margins further without worrying for raising the quality of care. For instance, they often indulge in profit-maximizing exercises like using the money collected from the subscribers for repurchasing their company stock. These manipulative kind of buybacks are done to create an unreal paucity of company shares and raise the stock prices. Apart from the institutional shareholders who are benefited from such an exercise, the board members and the CEOs receive major dividends, often amounting to millions of dollars.
ACA seeks to correct such malpractices by creating a system where the insurance firms are subject to regular audits and the kind of packages or dividends offered to their employees are justified. This has created a lot of outcry from the industry professionals but the fact remains that unless the insurance companies seek to correct themselves internally, there is little chance that the health care enrollment at a subsidized rate and in a transparent way is every going to be possible.