Doctors Say Health Insurers Investing in Tobacco
Jul. 06, 1995
WASHINGTON (AP) _ The nation's big, for-profit health insurers own tens of millions of dollars in tobacco industry stocks, three doctors who favor national health insurance asserted Thursday.
Writing in the British medical journal Lancet, they likened this investment strategy to the slogan of a combination veterinarian-taxidermist who promises that ``either way you get your dog back.''
Two insurers disputed the figures cited by Drs. J. Wesley Boyd, David U. Himmelstein and Steffie Woolhandler of the Cambridge Hospital and Harvard Medical School, but acknowledged owning some tobacco stocks.
Spokesmen for Prudential Insurance and CIGNA Corp. said their companies had only a few million dollars of their own money invested in any tobacco-related stocks, but may have larger holdings in accounts they invest for individuals and groups.
The doctors, who belong to Physicians for a National Health Program, which wants to replace private insurance with tax-financed government coverage for everyone, said a review of tobacco companies' filings with the Securities and Exchange Commission indicated:
_Prudential owned $248 million of stock in tobacco companies, including Philip Morris, Loews, RJR Nabisco and American Brands.
_Travelers Insurance Co. held $88 million in American Brands and RJR Nabisco stock.
_CIGNA had invested almost $77 million in Philip Morris, American Brands and RJR Nabisco.
_Metropolitan Life, which merged its health operations with Travelers last year into a joint venture, MetraHealth, which recently agreed to be purchased by United HealthCare, had over $15 million in RJR Nabisco.
Kevin Heine, Prudential's spokesman, said, ``I'm not sure where the authors came up with their numbers. It's not money that Prudential has invested in these companies'' on its own behalf.
Various Prudential funds may hold tobacco stocks invested for individuals and institutions, Heine added, but Prudential itself has only $2.5 million in stocks of companies that sell tobacco.
Mike Monroe, vice president of corporate relations for CIGNA Corp., said the figures were incorrect.
CIGNA has $4.5 million invested in domestic tobacco stocks in a fund ``where you have no choice but to invest in what the Standard & Poors index invests in,'' Monroe said.
CIGNA also holds $4 million in foreign tobacco stocks out of a $250 million portfolio, he said.
Any other tobacco-related holdings, Monroe added, would be in separate accounts of ``other people's moneys,'' such as group pensions that by law do not allow for social investments.
Keith Anderson, a spokesman for Travelers Insurance, refused to discuss the figures. ``We haven't looked at them. We have no comment,'' he said.
A Metropolitan spokesman did not immediately return a phone call.
Himmelstein, in an interview, said, ``What it illustrates to us is their primary goal in health care is making a profit. If they need to invest in lethal activities, they'll do it.''
The for-profit firms should ``get out of health care,'' as well as divest tobacco holdings, Himmelstein said.
Efforts to push the United States toward a Canadian-style health system have made little headway in Congress, and President Clinton's proposal for a public-private mix of insurance for all was rejected without a vote last year.