The chief executive of Blue Cross and Blue Shield of Massachusetts, the state’s largest private health insurer, abruptly resigned yesterday, just weeks after he was replaced as chairman of the board.
Cleve L. Killingsworth, 57, who helped lead Blue Cross for six years, departed shortly after the company posted a towering $149 million loss and reported it lost 89,000 subscribers last year…
The departure comes at a challenging time for Blue Cross, which has 3 million members and 3,600 employees in Massachusetts. The insurance giant has been struggling to hold down payments to doctors and hospitals. It is facing new scrutiny from Beacon Hill and Capitol Hill.
Like many other regional insurers, the company finished last year in the red. Blue Cross said it lost $149.2 million in 2009 on revenue of $13 billion, the first annual loss during Killingsworth’s tenure. Blue Cross blamed most of the red ink on investments in stocks and property, but $55 million of the losses was from its core business.
Darn! If only Massachusetts already had an Obama-style health reform system in place, we wouldn’t be having these probl…oh, right. Never mind.
Of the many (ahem) “misstatements” President Obama made in his pep-rally speech yesterday, one of the more blatant was his claim that the insurance companies are “getting rich” off of the current health care system. The President knows—because it’s been repeatedly reported—that insurance company profits range from 2.5 to 6 percent. And sometimes (see above) they lose money. You’re going to use their profits to pay for a $1 trillion government health-care scheme?
As Robert Samuelson reports in the Washington Post, “In 2009, the largest 14 insurers had profits of roughly $9 billion; that approached 0.4 percent of total health spending of $2.472 trillion.” [emphasis added]
What’s a bigger problem: the 0.4 percent insurance company profits, or the massive government regulation and screwed up economic incentives that drive the other 99.6 percent? The fact that Obama thinks it’s the former shows just how lost he really is.