Health Insurers' Fast Food Holdings Raise Flag

The investments of large insurers of health, disability and long term care in fast food chains like McDonald's and Pizza Hut have raised the interest of a study in the American Journal of Public Health, reports CBS Radio News' John Hartge.

The Harvard Medical School's Dr. Wesley Boyd, an author of the study, finds it ironic that these firms would invest nearly $2 billion in companies that sell food often linked to obesity and cardiovascular disease.

"The insurance industry, so far as it seeks to make a profit, it does so in an amoral way," Boyd said.

Boyd said health insurers should be held to higher corporate standards.

Among big investors in fast food companies are life and disability insurers, like Prudential Financial, Northwestern Mutual and Massachusetts Mutual.

According to the study, Northwestern Mutual owns $422.2 million in fast-food stock, with $318.1 million invested in McDonald's. Massachusetts Mutual owns $366.5 million of fast-food stock, including $267.2 in McDonald's.

Holland-based ING, an investment firm that also offers life and disability insurance, has total fast-food holdings of $406.1 million, including $12.3 million in Jack in the Box, $311 million in McDonald's, and $82.1 million in Yum! Brands, which owns Pizza Hut, KFC and Taco Bell.

New Jersey-based Prudential Financial Inc. sells life insurance and long-term disability coverage. With total fast-food holdings of $355.5 million, Prudential Financial owns $197.2 of stock in McDonald's and also has significant stakes in Burger King, Jack-in-the-Box and Yum! Brands.

The authors write that the recent passage of health care reform will likely expand the reach of the insurance industry, arguing that if insurers are to play a greater role in health care that they should be held to a higher standard of corporate responsibility.

"There's a ton of irony in it," said Boyd, a psychiatry professor. "In order to generate profits, they will invest in any area they need to … to make money, even if what they invest in, in this case fast food, is an industry that is known to cause people to get sick and to die early."

[tsigili]

Profits are the one and ONLY motivator for global corporations.

They hold no allegiance to any country, any people, or to the human condition.

Their leaders know no allegiance to anyone but themselves, and their own personal compensation packages.

[rbi149]

Just good old American capitalists drumming up business.

[ScottNV]

Maybe if less people purchased fast food, these stocks might not be such a good investment. Until then, insurers (health, life, LTC) should invest in the most profitable companies to keep premiums low.

[rbi149]

Right. Were you born clueless or did you have to work at it?

[anniemack1956]

....keep their premiums low.... Which conservative planet do you live on, nimrod.

[joeydonuts]

The Medical Information Bureau Inc (MIB) operates the most extensive database of medical information on individuals who have previously applied for health, life, disability income, critical illness and long-term care insurance in North America. These medical reports, which are ?like credit reports for your health records,? have been created for more than 200 million Americans.

The Federal Trade Commission warns that your medical report files may include both medical and non-medical information about you. For instance, personal data collected by the MIB includes medical conditions, your credit report history, driving records, criminal activity, drug use, sexual orientation, lifestyle activities, international travel, participation in hazardous sports, and personal or family genetic history. Using information from these medical report files, insurance companies can charge you higher premiums or terminate your coverage altogether.

https://www.annualmedicalreport.com/howto-request-medical-report/

Remember, the new health care reform laws in the Patient Protection and Affordable Care Act don?t go in effect until 2014. All insurance applicants and policyholders should order an annual copy of their medical report files from the nationwide specialty nationwide consumer reporting agencies to ensure they aren?t overpaying for insurance or in danger of policy rejection or rescission for pre-existing conditions or errors. (For example, ?Denied Insurance Because of a Medical Coding Error in Her MIB Report? from the Consumer Reports Health Blog)

[fishyak]

Insurers are not allowed to make underwriting decisions based on the basis of MIB information alone. That information has to be confirmed from other sources. In 30 yrs. in the insurance business, I've seen only 3 errors. Common names had information placed in the wrong files. The information is kept is a coded format. They do not really keep copies of medical records, etc. MIB is designed to help catch people who "forget" about significant parts of their personal history on their 2nd application. Underwriting results are also not part of the file. It's important to be sure that what is in there is accurate, but this isn't some master resource to track everything in your life.

[tariqwest]

There are a lot of ethically problematic practices that healthcare insurers engage in, but pointing to this as one of them seems specious. Northwestern Mutual, Mass Mutual and ING provide insurance products among other financial services products - they are financial services firms, not HMOs or PPOs or medical practices.

[amerilatino]

Too bad for all the kitchen-impaired folks who even touch that American fast food cr*p. I'll keep adding pages to my international recipe book and spices to my pantry. Don't worry, I'll help you unload your electric wheelchair & oxygen tank when we're both in retirement...

[nwmjason]

Let's clear some things up. I work with NWM and we only have $257 million invested in Fast Food Chains. This represents .19 percent of our total investment portfolio!! We have a duty to achieve high returns for our policyowners, so please people, read between the lines before jumping to conclusions on all these insurers. This guy achieved what he was trying to do...grab headlines with little substance.

[padgettba]

Your duty is to run your company in an efficient manner and achieve your mission of providing healthcare insurance. If you can't do that it doesn't give you the right to do "anything" to create a high return. Why not just lie, cheat, steal, and deny coverage to your customers to achieve that high return. You don't have to invest in fast food.

[justsane-2009]

ONLY %257 million? ONLY 19% of the total portfolio? whew, what a relief. i thought maybe we were talking about real money...

the "duty" of a health insurance carrier should be to ensure that policy holder receive the best health care possible when they need it. making a profit should be a secondary concern.

[bciss]

This is truly a stunning shock. Corporations of America putting profit above all else? Soooo, unusual. Please, we are a country that is run by major corporations and they do not care about people. Money is what matters. Which is abundantly clear by the "health reform" that is basically a gift to major insurers who operate for profit. With the exception of a some ill informed and intellect challenged people, anyone with the eyes to see and the will to look can see the pathetic and fraudulent state of our country and the lap dogs called politicians who do their corporate masters bidding.

[vernique]

Seem logical, since capitalism is based on maximizing profit. It is a dream if you think people are more important than money to these corporations.

[otterbrochu1970]

So I guess no one should invest in McDonald's because it would be amoral?

My favorite part is this:
"There?s a ton of irony in it," said Boyd, a psychiatry professor. "In order to generate profits, they will invest in any area they need to ? to make money, even if what they invest in, in this case fast food, is an industry that is known to cause people to get sick and to die early."

Why is it my favorite part? Well, because anyone who knows about life insurance knows that the companies do not want you to "die early". Why? Because they would have to pay the insurance claims before they have made enough money to cover the claim. That is the really "ironic" part. Investing in something that would acutally cause you to make less money.

It is amazing what passes for news today.

[ScottNV]

Actually if they are a LTC insurer, this makes perfect sense. If you die before you need LTC, the insurer wins!