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Deborah Senn Headshot

Senator Baucus, Welcome to My World

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It's totally predictable. Late last week with the release of the CBO study supporting the cost and effect on the deficit of the Senate Finance Committee bill, the health care pendulum seemed to be swinging back toward consumers and even the "public option." Then bam -- the health insurance industry comes out with a study (today) threatening consumers with big premium increases -- a tactic sure to bring fear to the public's collective heart.

Here is what is imperative to know about negotiating with the health insurance industry -- they are always moving the goal posts! Don't take it from me -- the statement is from the lips of a Republican legislator, chair of a legislative health care committee and an insurance agent to boot.

In 1993, Washington's legislature was about the only state to pass comprehensive health care reform. I was the state's Insurance Commissioner. As we implemented the new law, the Democratic debacle of 1994 occurred. Like the House of Representatives in D.C., the Washington House of Representatives flipped Republican. The first thing the insurance industry set out to do was repeal all of health care reform. The new Republican chair of the Health Care Committee was an insurance agent, moderate and even fair-minded. He tried to save some aspects of health care reform with assurances from the industry that they would back him. When the insurance lobby pulled the rug out from under him he came to my office distraught: "The insurers keep moving the goal posts -- the insurers keep moving the goal posts!" I looked at him and said, "Welcome to my world."

Most of the health care reform was repealed -- but the health insurance reforms -- in fact, the precise ones that are being proposed in Congress today, were kept in place because they were so popular with the public (the Republicans polled -- the reform removing pre-existing conditions was extremely popular with the public). Then, guess what happened? The insurance industry campaign and tactics to repeal those reforms became relentless. It's a dirty little story.

First, the legislature was constantly told by the insurance lobby that reducing the loathsome pre-existing condition requirement resulted in people "gaming" the system. In other words, people were "waiting" to get sick to buy insurance. My office repeatedly conducted a thorough investigation and there was simply no evidence that it was occurring.

Second, the health insurance industry was constantly telling the legislature that the reforms were causing them to go broke, so every year my office released a detailed financial report showing the healthy financial condition of our health insurers. Not one insurance company became insolvent because of the health insurance reforms. They also constantly asked for increases in premiums

Third, according to the industry the reforms were so "onerous" that major insurers simply left the state (I mean the Wall Street Journal reported that!). Well, some bad actors and a few companies that refused to implement the original health care reform left (to no one's regret) but it was less than 1% of our market. All the major insurers remained.

Finally, to get those pesky reforms repealed and gone, one of our big health insurers stopped selling in the individual market. Even then, to our amazement we found that so many people had enrolled because of the health insurance reforms that our insured rate in Washington had increased! In spite of the "pull-out" in the individual market, people could get health insurance by joining the local Costco group or professional association. But by then the legislature was so terrified, it was willing to give the insurance industry anything to sell to individuals again. So, the legislature not only repealed all the reforms, but gave the insurance industry the extra ability to throw the sick people off their rolls if they were, oh my goodness, making claims. Guess what -- the insurers happily came back into the market and our uninsured rate went up!! They actually knocked people off the rolls who paid their premiums simply because they were sick. Ask any insurance lobbyist from my state what happened and they will tell you what a mess it was and what a bad job we (basically I) did. But you know, for the short time health insurance reform was in place it worked and more people actually became insured. Imagine. But, hell hath no fury like a scorned insurance company. And, you know what else -- its all the same lobbyists.

Welcome to my world Senator Baucus.