Health Care Service CEO Pay Took Hit

Last year was an off one financially for Chicago-based Health Care Service Corp., which operates Blues plans in five states. The pay of their top executives took a hit as a result.

Chief Executive Officer Patricia Hemingway Hall had a total compensation package last year of $11.2 million, down 30% from the $16 million she took home in 2012, according to data from the Illinois Department of Insurance.

That's likely tied to the firm posting 2013 net income of $684.3 million, down 31% from the $1.01 billion in net income it reported in 2012. Hemingway Hall's bonus was slashed by a similar percentage, from $14.9 million to $10.1 million.

The company had to shift $260 million into a reserve fund late last year to shield against projected 2014 losses due to changes in plan composition connected to the Affordable Care Act.

Health Care Service Corp. President of Plan Operations Colleen Foley Reitan also took a steep pay cut last year, down from $9.7 million in 2012 to $2.3 million last year. That included a drop in bonus to $1.5 million from $7.9 million.

Although ACA-related changes are also expected to seep into the bottom line of many other health insurers in 2013 and beyond, the trends suggest that many executives will continue to enjoy eight-figure annual pay.

According to Healthcare-Now, a left-of-center organization that supports single-payer reform, the average compensation of CEOs of publicly traded health plans rose 19% in 2013. Altogether, the average publicly-traded health plan CEO was paid $13.9 million in 2013, compared to $11.6 million in 2012.

The highest paid executive last year was Aetna's Mark Bertolini, who was paid $30.7 million – more than the CEOs at WellPoint and Centers – the second and third-highest paid on the list – combined. Bertolini was paid $13.3 million in 2012.

"Families and patients are being asked to tighten their belts in the face of rising healthcare costs, while our premiums are being used to subsidize even more astronomical compensation for the already wealthy," said Benjamin Day, Healthcare-Now's director of organizing. “The culture of excess at these for-profit corporations is incompatible with the goals of an efficient, ethical healthcare system, where every dollar diverted from patient care represents a loss of access for real families."

By comparison, Day noted that Marilyn Tavenner, director of the Centers for Medicare & Medicaid Services, is paid less than $200,000 annually.