The Obama administration is proposing a major overhaul of the U.S. health care system, and the insurance industry is poised to play a major role in the process. Insurance firms, like any business, are driven by profit, and this fact compromises any health care plan that includes them. In case there is any doubt that insurers place profit above health, consider their investments in tobacco. The U.S.-based Prudential Financial provides life insurance and long-term disability coverage and is also a major owner of tobacco stocks, with total tobacco holdings of $264.3 million.
The U.K.-based Prudential offers life, health, disability, and long-term care insurance. Prudential’s stake in tobacco totals $1.38 billion. Standard Life, which is also based in the United Kingdom and offers both life and health insurance, owns nearly $950 million of tobacco stock. Canada-based Sun Life, which offers life, health, disability, and long-term care insurance, owns just over $1 billion of tobacco stock. Northwestern Mutual and Massachusetts Mutual Life Insurance Company (MassMutual) both offer life, disability, and long-term care insurance. MassMutual owns more than $585 million of tobacco stock, and Northwestern Mutual’s stake exceeds $235 million.
Although investing in tobacco while selling life or health insurance may seem self-defeating, insurance firms have figured out ways to profit from both. Insurers exclude smokers from coverage or, more commonly, charge them higher premiums. Insurers profit — and smokers lose — twice over. These facts should discomfit Canadian and British readers as their countries consider further privatization of health insurance. For those of us in the United States, these data are a reminder of the true priority of the insurance industry, which is making money, not ensuring health and wellbeing.
These data raise a red flag about the prospect of opening vast new markets for private insurers at public expense, as has happened in our state of Massachusetts, whose recent health care reform is often cited as a model for national reform. Milton Friedman wrote, “Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible.” 1 Market incentives favor pursuit of profit over the public’s well-being. The insurance industry’s investments in tobacco reinforce Friedman’s message and mandate caution regarding insurance firms’ participation in care.
J. Wesley Boyd, M.D., Ph.D.
David Himmelstein, M.D.
Steffie Woolhandler, M.D., M.P.H.
Cambridge Health Alliance
Cambridge, MA 02139
Correspondence Copyright © 2009 Massachusetts Medical Society.