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Resist the Corporate State

Study Debunks Insurers’ Explanation for Exorbitant Rate Hikes

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Center for Media and Democracy

The pro-health care reform group Health Care for America Now has released a study (pdf) that contradicts insurance companies’ claims that their recent, exorbitant rate hikes were driven by increases in the cost of medical care. The study shows that over the last eight years premiums have almost doubled, while medical inflation only increased by 40 percent. HCAN found that insurance companies are raising their rates more than 20 percent faster than the amount they are paying out to doctors, and twice as fast as their underlying costs of medical care are rising. In short, insurance companies are hiking premium prices much more quickly than their costs are increasing. HCAN also found that insurance companies are spending the extra money on perks. For example, Anthem spent $27 million on 103 executive retreats to locations like Hawaii in 2007 and 2008 alone. From 2000 to 2008, insurance companies spent $716.4 billion of their premium dollars on administrative costs, salaries for their CEOs, and investor profit — practically enough to fund the entire health reform bill.

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  1. […] Study Debunks Insurers’ Explanation for Exorbitant Rate Hikes […]


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