Friday, October 20, 2006
Imagine, for the sake of argument, that you were this middle-aged white collar slob seeking private health insurance. Suppose, when you fill out your application form, you ignore your Prilosec and Caduet prescriptions, your diabetes, and the knee surgery you had last year for arthritis, and claim that your health is as pristine as it was when you were 25. Do you think you would get away with it? Do you think you should get away with it? Why, I tell you, my friend, once you showed up at the hospital with a life-threatening sequel to one of your many "pre-existing conditions", your health care provider would deny you coverage lickety-split, and you'd be thrown out on your ass in your hospital johnny.
Curiously, the top dogs at UnitedHealth - the second-largest health care provider in America - didn't even blink at back-dating the billions of dollars of stock options they'd given as compensation to their chief executives. You know what stock options are - if you get stock options, that means you can retroactively buy the stock at the price it had when the option was first issued, even if the real market price had risen since then. With back-dating, the price when it is first issued - the "strike" price, so to speak - is artificially set to a still earlier (and presumably lower) price that would yield even more of a deal to those who might want to exercise the option later on. As you can see, this is the exact same kind of cheating-by-time-machine game that you would play if you ignored your "pre-existing conditions" and turned the clock back to the bygone days of your healthy youth. It is also, dare I say it, "unethical". By giving the recipients of these stock options this unfair advantage, UnitedHealth jeopardized the interests of its other shareholders. Do you think they got away with it? Damn right, they did! Should they have gotten away with it? Read the article at the link below, and decide for yourself.
"UnitedHealth's Options Scandal Shows Familiar Symptoms" from The Washington Post