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HealthNet 2nd Quarter Profits Up 4 Times Last Year's Returns, Says Consumer Watchdog

Prop 45 Will Protect Overcharged Consumers From Paying for Massive Health Insurer Profits

SANTA MONICA, Calif., Aug. 11, 2014 /PRNewswire-USNewswire/ -- The report of HealthNet's $120.9 million second quarter profit, which is 4 times its 2013 second quarter profit, is yet another reminder, amid a slew of massive health insurer profit reports, of the need for Proposition 45's protections from health insurer profiteering said Consumer Watchdog Campaign today.

Proposition 45 will shine a light on health insurer rate proposals and ensure reasonable rates and appropriate profits. It will require health insurance companies to publicly disclose and justify, under penalty of perjury, proposed rate changes before they take effect, and require that they get approval for rate hikes. It applies the same laws to health insurance that have saved California drivers over $100 billion since 1988, while making the auto insurance market highly competitive and profitable for insurers. More than 35 other states regulate health insurance rates, but not California.

"Price gouged consumers are funding the waves of profit that keep rolling in for California health insurance companies," said Rob Leonard with Consumer Watchdog Campaign. 

Health insurance companies' recent profit reports include:

  • $2.5 billion profit for United HealthCare for the first six months of 2014 and a dividend payout to investors of $367 million
  • $52.5 million for WellPoint subsidiary Blue Cross of California for the first quarter of 2014
  • $1.4 billion in profits for WellPoint for the first 2 quarters of 2014
  • $1.1 billion profit for Kaiser for the first quarter of 2014
  • HealthNet's $120.9 million second quarter profit, which is 70% of its total 2013 profit

"California consumers have been overwhelmed by a tsunami of relentless rate hikes because there is nothing at the federal or state level to stop insurers from imposing unreasonable increases," said Robert Leonard of Consumer Watchdog.  "Insurers hope that a $37 million campaign of deception will defeat Proposition 45. But if Prop 45 doesn't pass, health insurers will continue to stick it to consumers as they have for years." 

The four largest health insurance companies in California have contributed 99% of the $37 million given to the campaign against Proposition 45. Kaiser has contributed $14.6 million to the No on 45 committee, Anthem Blue Cross' parent company WellPoint has contributed $12.7 million, and Blue Shield so far has given $9.5 million. Four health insurance companies control 94% of California's health care Exchange, Covered California: HealthNet, Kaiser, Anthem Blue Cross, and Blue Shield. 

HealthNet points to its 14.3% increase in total enrollment in California to 2.5 million as a key factor in its Western Region and Government Contracts segments combined net income of $50.3 million for the quarter, which grew from $41.4 million during the same period last year.

For more about Proposition 45 visit: www.Yeson45.org 

Paid for by Consumer Watchdog Campaign – Yes on 45, a coalition of consumer advocates, attorneys, policyholders, and nurses. 777 S. Figueroa St., Ste. 4050, Los Angeles, CA  90017. Major Funding by Consumer Watchdog Campaign and Thomas Steyer.

SOURCE Consumer Watchdog Campaign

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