By Joyce Kryszak
Buffalo, NY – A state healthcare advocacy group says exorbitant salaries for health insurance executives is really to blame for skyrocketing premiums. In a study released Monday, the Mental Health Association in New York reports, on average, health insurance executives in New York earn salaries topping $826,000.
Public and private organizations are struggling to cope with dramatic increases for health care insurance. Next year alone, many officials estimate hikes of between eight and twelve percent.
Health insurance companies point to the cost of providing mandated services, such as surgery second opinions and certain cancer screenings. But Joe Glazer, who is president of the state Mental Health Association, says that's not the half of it. And he says it's time for full disclosure.
"We now know that the average cost of administration in a plan is 50 to 60 percent higher than the amount of money being paid by these plans for mandated services," said Glazer. "So, we want the discussion to be fair, we want it to equitable, and we want people to understand that it's not mandated services that are driving the cost, but largely it is the administrative costs, the large salaries, the money being spent on lobbying, marketing, all of those pieces, that are really driving the cost of health insurance in this state."
And Glazer says those administrative costs -- with some CEO's earning a million dollars or more annually - isn't on par with other industries statewide. According to the report, the typical salary for a CEO is about $312,000.
At Excellus, the parent company for Univera HEalthcare, five executives earn salaries of more than a million dollars each. Mary Lee Campbell-Wisely is Regional President for Univera. She says only ten cents of every insurance premium dollar pays for administrative costs. And she says the salaries are justified.
"While it might seem high, we have to attract quality managers who have very large responsibilities in this huge company, and it costs money to recruit and train them," said Campbell-Wisely. "And our Board of Directors looks at the compensation levels and approves them. And they are based on competitive market salary information and benefit surveys."
Still another insurance company representative called the report bogus, saying it failed to include every insurance provider in the state, such as Child Health Plus.