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Senator Lincoln’s Great Idea December 6, 2009

Posted by Admin in Healthonymous, Money.
Tags: , , ,

Yesterday, I watched Senator Lincoln(D-Arkansas) “visit”, as she called it, on the floor of the US Senate. The Senator got my “Expect Better” award for the day. She has proposed an amendment to the health reform bill that the R’s don’t like at all. Her amendment proposes limits to the tax deductibility of executive compensation for executives of health insurance companies. Read that again, not limiting executive compensation, but the tax deductibility of same.

The current allowable tax deduction per executive is $1,000,000. Lincoln’s amendment would limit this allowable deduction to $400,000,  a level as she said, that is

“the same amount as the highest salary of the paid public official in the country”. (the President)

Senator Lincoln helpfully pointed out that the health insurance companies could continue to pay executives as much as they wanted (we’ve heard those stories-and she mentioned one salary of $24,000,000 per annum). But that if her amendment passes, the American taxpayer will no longer be subsidizing these salaries as much as before. The savings from her proposal would be directed into the Medicare Trust Fund, she said.

The CEO salary that she mentioned was that of Ron Williams, of Aetna.  According to Forbes, his most recent “total compensation” was $30.86 million, just over the CEO of Halliburton and behind the CEO of Morgan Stanley. $24,000,000 of that was from stock gains. This from a company that announced on December 4th, a reduction of up to 600,000 clients next year in order to boost profits. Said the aforementioned Mr. Williams,

“The pricing we put in place for 2009 turned out to not really be what we needed to achieve the results and margins that we had historically been delivering,” said chairman and CEO Ron Williams. “We view 2010 as a repositioning year, a year that does not fully reflect the earnings potential of our business. (emphasis added).

So, yes I agree, that Mr. Williams can have all of the income his shareholders can stand (and I might be one of them in a mutual fund or two), but they are dropping around 4% of their client base in order to boost profits? It has worked for them before. But yes, let us decrease the taxpayer subsidy of these high salaries. Go, Senator Lincoln!

[picapp align=”center” wrap=”false” link=”term=senator+lincoln&iid=7107621″ src=”4/8/a/0/Sen_Lincolns_support_3562.JPG?adImageId=8059076&imageId=7107621″ width=”234″ height=”381″ /]

PS, Senator Lincoln, great public speaking on the floor  but there were too many um’s. Note to self-thank you for Toastmasters!



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