Santa Monica, CA -- The Foundation for Taxpayer and Consumer Rights today called upon Insurance Commissioner Garamendi to halt health insurer profiteering by using his power to stop the merger of HMO giants Pacificare of California and UnitedHealth. Garamendi is holding a hearing today on health insurance industry profitability.
FTCR's Jamie Court and Carmen Balber wrote Garamendi:
"This merger is a case study in Wall Street profiteering that will likely result in higher health care costs for all Californians and you have the power to stop it. This is a time for more action, not more talk.
"Under the terms of the proposed merger, top executives will receive $445 million in bonuses. These bonuses could provide health care for 148,000 Californians for an entire year (based on an annual cost of $3,000 per person). Patients should not foot the bill for huge cash and stock payouts to health care executives.
"Also at risk is PacifiCare's $389 million in excess reserves Â built with patient premiums to more than 500% of state-required levels that UnitedHealth could remove from the state unless regulators require the funds
remain. This excess reserve is sufficient to provide health care coverage for another 130,000 Californians for an entire year.
"If you are serious about curbing profiteering in the health care market, take a stand. Oppose the PacifiCare/ UnitedHealth merger until the company repudiates its excessive executive compensation and returns excessive profits to the public."
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The Foundation for Taxpayer and Consumer Rights (FTCR) is California's leading nonpartisan consumer advocacy organization.