business
Tie health plan rate hikes to executive pay, Conn. official says
NEWS IN BRIEF — Posted May 10, 2010
In a letter to his state's insurance department, Connecticut Attorney General Richard Blumenthal has requested that executive pay be a factor in determining whether to approve a health plan's request for a rate increase.
Blumenthal wrote the letter to Insurance Commissioner Thomas Sullivan after seeing the April 14 proxy statement for UnitedHealth Group, which recently acquired the renewal rights for Health Net in Connecticut. Health Net had received insurance department approval for a 19% increase in group plan rates for 2010.
The proxy filing showed that the UnitedHealth Group CEO received total compensation of $102.6 million in 2009, including more than $98 million for the exercise of stock options.
"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," wrote Blumenthal, who is running in 2010 for the U.S. Senate.
Sullivan responded that his department will regulate rates "within the authority of this office and predicated on facts and actuarial soundness." He did not say if he would consider executive pay as part of the equation.
Note: This item originally appeared at http://www.ama-assn.org/amednews/2010/05/10/bibf0510.htm.