Health-Care Costs Rise, Health Insurer Profits
April 20, 2006 — -- While patients, doctors and hospitals have been feeling the pain of rising health-care costs, the chairman and CEO of UnitedHealth has been accumulating one of the richest batches of stock options ever.
William McGuire has acquired $1.6 billion in stock options since 1989.
"That amount depends on fluctuations of the stock market," McGuire told CNBC on Tuesday. "But I've been very fortunate."
McGuire's fortune, however, may be the result of more than just luck. The Wall Street Journal has reported that he and at least 10 other top executives of the company frequently have received stock options just before big increases in the company's share prices, which made the stock more valuable.
The Securities and Exchange Commission is investigating the manner in which McGuire and others were granted their stock options.
Joel Albers works as a pharmacist near UnitedHealth's headquarters in Minnesota. He's been going to state fairs dressed as McGuire to protest corporate greed.
"It makes me very angry," Albers said. "We feel as health practitioners that we have a moral and ethical obligation to speak out about this."
Albers wants McGuire to donate the $1.6 billion to cover the 77,000 uninsured children in Minnesota.
There are currently 46 million uninsured Americans. On average, Americans' out-of-pocket contributions for medical expenses, including their portion of health-insurance coverage, have increased from $253 a year in 1980 to $726 a year in 2001, according to a report by the U.S. Centers for Medicare and Medicaid Services.
A UnitedHealth spokesman defended McGuire, pointing out that the company's stock had gone up 7,000 percent since McGuire had taken over. The spokesman said that the company had helped bring down health-care costs for everyone by making the system more efficient and that McGuire had personally donated tens of millions of dollars to charity.
According to the Journal, in addition to his lucrative portfolio, McGuire has been on the receiving end of several other perks, including $140,000 for personal travel and nearly $70,000 for personal financial planning.
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