Cigna, the nation’s fourth-largest health insurance company, operates a business model that is “built to loot.”
Cigna has been looting its policyholders. The links between Cigna’s aggressive denial of claims, and its refusal to pay for expensive treatments of its policyholders were documented in Michael Moore’s film Sicko, and former Cigna PR head Wendell Potter’s book, Deadly Spin. A 2010 survey of insurance company claims data from California found that Cigna denied nearly 40% of all claims filed, well above the 26% rejection rate by the state’s top seven insurers.
The insurance giant has also looted it employees. In 2001, Cigna made dramatic changes to its pension plan, which cut the retirement benefits for many employees. The workers joined in a class action suit, which they won in 2008 when a District Court judge agreed that Cigna had misled workers. In 2011, the U.S. Supreme Court upheld the District Court’s ruling. The case is presently awaiting final resolution.
The company continues to lavishly compensate new CEO David Cordani, who was the highest-paid health insurance/hospital CEO, with more than $19 million in 2011 compensation. Mr. Cordani received a 25% raise from his 2010 take.
Scott Klinger is an Associate Fellow at the Institute for Policy Studies.