The big health insurer’s smoke screen

 As the US moves toward a national health care program, certain insurance companies demonstrate a conflict of interest when they invest in tobacco stocks according to David Himmelstein of the Harvard Medical School.  Almost $4.5 billion of tobacco investments can be directly linked to health and life insurance companies in the U.S. and abroad.

Prudential, the 160-year old insurance company with branches in the U.S. and U.K., came up on top as the largest tobacco investor with $1.5 billion.  While next in line, Toronto-based Sun Life Financial allegedly holds over $1 billion in Philip Morris (Altria) and other tobacco stocks.  In total there are seven organizations that sell life, disability, health or long-term care insurance who have major holdings in tobacco stock.

“If you own a billion dollars [of tobacco stock], then you don’t want to see it go down,” says the Harvard internist and co-author of a letter published in the New England Journal of Medicine“You are also less likely to join anti-tobacco coalitions, endorse anti-tobacco legislation, basically, anything most health companies would want to participate in.” 

The letter is the third report published in the last 14 years by the doctors who all support a national health care program.  During an investigation of the companies mentioned in the letter, Prudential and Sun Life were contacted with regards to their policies on tobacco stock - Prudential was not able to respond by press time; however, Sun Life denied all charges.

Through a statement, representative Steve Kee said, “Sun Life does not carry significant holdings in tobacco stocks.”  He continued, “we do not disclose specific holdings and, for good measure, we conducted a review further to your inquiry and our exposure to ‘tobacco’ stocks is less than 0.005 percent [about $5 million] of the investment portfolio.  Importantly, tobacco-related businesses can be part of a broader conglomerate involving other aspects such as food production.”

Himmelstein conducted his research through the Osiris online database and reverified his stats after Kee’s statement and replied, “I fear that if Sun Life has a dispute, it is with Osiris not with us.”

This isn’t the first time the Harvard docs have questioned the insurance companies‘ business dealings.  In their 1995 and 2000 letters to medical journals, they targeted Cigna and MetLife; however, neither appears in the latest list indicating that the insurers do not hold enough stock to be on the filings for the US Securities Exchange Commission.  Furthermore, Cigna representatives have made assurances that the company no longer has any direct holdings in tobacco stock unless it is part of an index fund. 

With the insurance companies continuing to be examined under a microscope, Himmelstein asks, “Is this who we want running our health care system?”  Many insurers are still in the business of Big Tobacco and with an investment of $4.5 billion they are reaping the profits from the same cancer-causing industry.  These companies simply can’t look out for the best interests of healthcare while possibly compromising their financial well-being.

Source: “Health insurers want you to keep smoking, Harvard doctors say."