Attorney General Richard Blumenthal Thursday called on the state Department of Insurance to consider executive pay when approving rate requests from health insurance companies.
Blumenthal made the request saying he was outraged over reports that United Healthcare paid its CEO $102 million in compensation last year, while also reaping $1.2 billion in profits and increasing rates on consumers.
“I was shocked to learn that United Healthcare, the company that just acquired the membership renewal rights of Health Net customers in Connecticut, paid its CEO, Stephen Hemsley, $102 million in total compensation for 2009,” Blumenthal wrote in a letter to Insurance Commissioner Thomas Sullivan.
For more than a year, Blumenthal has been a sharp critic of rate increases by insurance companies on Connecticut consumers and has been looking to reform the way state regulators approve health insurance policy rates in the state.
In February, for example, he and Healthcare Advocate Kevin Lembo, among others, proposed sweeping reforms including requiring public hearings for all insurer-proposed rate increase requests, something not currently required under state law.
A legislative report in January revealed that three of the five largest health insurance companies in Connecticut received regulatory approval to raise their average 2010 rates on individual and group health plans by 12 percent or more.
The largest rate hike – 19 percent – was granted to Health Net of Connecticut for its policies sold to employers. Health Net recently completed a merger with United Healthcare.
Additionally, the report, which was authored by the Office of Legislative Research, found that state regulators have approved rate increase requests from Connecticut’s largest health insurers in 22 cases out of 26 since 2006. In the four cases where original rate requests were rejected, the insurance department mandated smaller rate hikes.
“These double-digit rate increases imposed on Connecticut Health Net consumers are staggering — and stupefying in light of the lavish sums paid to its new CEO,” Blumenthal wrote in his letter. “In this economic climate, consumers should not be subject to soaring health insurance rate increases while insurance companies and their executives continue to reap outrageously surging profits.
“I urge you to strongly consider United Healthcare’s profits and its generous CEO pay package when reviewing any future rate increase requests filed by United Healthcare.”
