In the past few days, the health insurance industry's outrageous greed has been nakedly exposed.
After pretending for months to cooperate with the Obama administration and Democrats to secure a reasonable health reform bill, the industry's CEOs and lobbyists on Sunday double-crossed their one-time political allies by openly attacking a compromise bill crafted by Max Baucus, the conservative Montana Democratic who chairs the Senate Finance Committee. The Obama White House and the Democratic leadership in Congress were taken by surprise, and are angry at the industry's about-face on health reform.
"I'd spent a couple of hours with insurance industry folks last week, and yes I did feel blindsided," Nancy Ann DeParle, White House Office of Health Reform director, told NBC about the industry's stunt. "I did feel we were working constructively."
This could, ironically, help the reform cause, if the Democrats translate their anger at the big insurance companies into a tougher stance -- such as a stronger public option to compete with the private insurers and keep them honest with regard to profits, premium prices, and consumer neglect.
For months the Obama administration and Senate Democrats have been coddling the insurance industry giants, hoping to enlist their support for insurance reform. Karen M. Ignagni, president of America's Health Insurance Plans (AHIP), the industry trade association, has been orchestrating the industry's cooperative stance with the Democrats drafting health care legislation. The mainstream media have published glowing profiles of Ignagni, admiring her skill at coaxing the big insurance companies to try to co-opt, rather than confront, the Democrats. The media has contrasted the industry's collaborative approach with its more combative stance during the early1990s, when President Clinton sought to enact health care reform. Then, the industry was a highly visible opponent of reform from the get-go, including paying for the infamous "Harry and Louise" TV ads that helped kill the Clinton reform plan.
But since then the number of Americans without any health insurance, and the number who face bankruptcy due to sky-high insurance bills, has increased significantly. Recognizing Americans' pent-up anger, the insurance industry changed its tactics, but not its goals. What the insurance industry wants is for the federal government to require all Americans to buy private insurance and to provide subsidies to families who can't afford the premiums.
The industry has lined the pockets of the Senate Finance Committee members with huge campaign contributions in order to obtain their cooperation. Baucus, the committee chair, had essentially been a rubber stamp for the industry -- most prominently, by voting against Obama's proposal to include a public option in the committee's bill. Baucus and his industry bedfellows had been so close, in fact, that in August Business Week ran a cover story headlined, "Health Reform: Why Insurers are Winning."
Baucus' Finance Committee is scheduled to vote tomorrow on the bill, which includes:
Last week, the Congressional Budget Office released its evaluation of the Senate Finance Committee proposal. The CBO estimated that it would cost $829 billion over the next 10 years -- less than the $900 billion President Obama had suggested -- and would reduce the deficit by $81 billion during that period. The industry isn't happy with even the weak provisions in the proposal that would "contain costs" -- which the insurance companies translate into "reduce profits." The reality is that the bill is a huge windfall for the insurance industry, but their greed knows no limits.
The CEOs of the major insurance corporations were particularly upset by Wall Street's reaction to the CBO's report. On Friday, stock prices of the largest health insurance companies fell. (Each company's stock was down except HealthSpring, whose business is nearly 100 percent with Medicare Advantage and Medicare drug plans, so it has little exposure to the impact of health reform).
Of course, this is just a one-day slide, but CEOs, as well as investors, can get panicky when they think the federal government might not give them everything they want.
Indeed, the CEOs own a lot of stock in their own companies, so for them, this is personal. For example, Cigna CEO Edward Hanway watched the value of his common stock fall from $128.2 million to $122.9 million -- a one-day loss of $5.3 million. United Health CEO Stephen Hemsley stood by helplessly as his common stock dropped by $2.1 million. Michael McCallister, Humana's CEO, found himself $1 million poorer on Friday than he'd been the day before -- at least on paper. And Angela Braly, CEO of WellPoint, lost $916,122 in common stock value.
These insurance CEOs and their counterparts don't need our sympathy. The reality is that the Baucus bill is a Christmas tree full of ornaments for the insurance industry. But Ignagni is now clearly under orders from the CEOs who pay her salary to squeeze every ounce of profit she can from Congress. That's why they pay her the big bucks. That's why they have increased their lobbying expenditures to $700,000 a day during the first six months of this year.
So on Friday they pushed the panic button, hoping to derail the Baucus legislation until the industry can get everything it wants rather than, say, 90 percent of what it wants.
They seem to forget that insurance premiums over the past decade have already gone up 138 percent, three-and-a-half times higher than family incomes. In addition, insurance deductibles, co-pays, and co-insurance have been skyrocketing, to thousands of dollars a year for families, especially those with the cheaper insurance plans. Despite rising premiums, the insurance companies continue to abuse their consumers, refusing to pay claims or delaying payments, both of which result in increased revenues for the insurance giants. Last year, even in the midst of a recession, United Health had $2.9 billion in profits. WellPoint had $2.5 billion, Aetna $1.4 billion, Humana $647 million, Cigna $292 million, HealthNet $95 million, Coventry $382 million, Molina $62 million, and HealthSpring $119 million.
Meanwhile, the number of uninsured Americans is up to 46 million. Millions more are under-insured -- they pay for plans that leave them vulnerable in the event of unexpected health emergencies. More employers are shifting costs to employees, or dropping coverage entirely. Medical bills are now the principle factor in 62 percent of personal bankruptcies. More than half of Americans, the majority of them people with insurance, are skipping needed care due to high out-of-pocket costs.
Many Democrats in Congress long ago lost their patience with the insurance companies. Many would like to create a Medicare-for-all system, similar to a Canadian-style single-payer approach. A larger number want a strong public option that would vigorously compete with the private insurance companies and provide consumers with more choices. Only a handful of Senate Democrats -- including Baucus, Blanche Lincoln (Arkansas), Evan Bayh (Indiana), Kent Conrad (North Dakota), Ben Nelson (Nebraska), and Mary Landrieu (Lousiana) -- have opposed the public option and served as the industry's servants in the health reform debate.
But this latest betrayal by AHIP may even get the Baucus Caucus so angry that they'll finally take a stand against the industry's insatiable hunger for profits.
In response to the release of the AHIP propaganda, for example, Scott Mulhauser, a spokesman for Baucus and the other Democrats on the Finance Committee, said: "This report is untrue, disingenuous and bought and paid for by the same health insurance companies that have been gouging consumers for too long. Now that health care reform grows ever closer, these health insurers are breaking out the same tired playbook of deception. It's a health insurance company hatchet job."
In the past month, the grassroots movement for health insurance reform has been growing -- and focusing more attention on the insurance industry's outrageous profits, abuse of consumers, and political influence-peddling. They've been warning Democrats not to get duped by the industry's pledges of cooperation.
"This is an outrageous threat by one of the richest industries in America," said Rose Ann DeMoro, executive director of the 86,000-member California Nurses Association/National Nurses Organizing Committee.
"This is a transparent attempt by the health insurance industry to sabotage reform," said Richard Kirsch, campaign manager for Health Care for America Now, the national coalition of consumer advocates, unions, religious organizations, and community groups that is waging a grassroots campaign for change. "Of course they're coming out with guns blazing at the 11th hour. They're out to protect their money and their power, and they'll go to any lengths -- including circulating fake information -- to stop real change."
AHIP's latest double-cross may be the wake-up call that the conservative and centrist Democrats need to develop some political backbone.
Peter Dreier is E.P. Clapp Distinguished Professor of Politics, and director of the Urban & Environmental Policy Program, at Occidental College. He has been writing a series of articles for HuffingtonPost about the health insurance battle.
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WAKE UP!!!!
The Supreme Court is wrong. Money does not equal free speech. Money equals power.
http://countdowntohealthcare.com/
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I’ve been reading a lot lately about how poor your health care system is. It sounds terrible about how long you have to wait for care. Doctors and nurses must be rather incompetent, too, considering how poorly they get paid.
Canada must be a terrible place to live, what with all the dying people in the streets and all that. It’s really sad how your crazy socialist fascist totalitarian European-style government rations care and lets the old and useless people suffer. It’s too bad there isn’t some kind of help for Canadians to get better medical attention. Canadians must be outraged!
It must be hard to find medicine there, too, since there’s no scientific research or any kind of medical advancement there.
Please feel free to come to the United States. It only costs about $9,000 a year here for medical coverage for one person. And then, if you actually get sick, it’s only another $500 deductible and you only pay about 20% of your total bill. I had an MRI last year, and it only cost me $1,500 out of my own pocket! Can you believe the value?
Just be careful to call ahead, get pre-approved for everything (even before you hop in the ambulance!), and make sure your doctor is in the right network (whatever that is!) otherwise you’ll have to pay full price.
Sincerely,
U.S. Citizens against anything Canadian or European-sounding
Best quote I've read all day, and one that oddly gives me hope. I increasingly believe the US is headed for an almost apocalyptic showdown between its absolute worst, money-grubbing citizens/residents and everybody else.
And what's the beef with evil health insurance companies? They're so highly regulated they might as well be a Public Option hybrid. Which sounds like your elixir, a Public Option.
What's wrong with letting us choose our own health care, and choose our own insurance policies from private companies that are truly competitive, allowed to operate in any state, and able to write policies that I want, not what the government micro-manages (eg, long-term catastrophic coverage only, without coverage for everyday stuff - physicals, prescription drugs, normal sickness like colds, etc., the long-term policies would be a lot cheaper, not used as much)?
Get the government agencies and tentacles out of the way, prices go down, options go up. Sure government has a role, pre-existing conditions coverage, insurance company pooling required for people who falls through the cracks, subsidies for the needy. But not running the show.
Nobody wants a private company monopolizing an industry; so why give a pass to Big Government?
ENUF IS ENUF
PUBLIC OPTION TO KEEP THOSE CHEATS IN LINE.
COME ON OBAMA AND AMERICA - WE WON THE ELECTION - WE CAN GET PUBLIC OPTION.
Check this link!
http://www.msnbc.msn.com/id/3036677/#33301176
This wishful thinking (excluding the possibility that this is all theater), is brought into relief by a point made in the same article: "The industry has lined the pockets of the Senate Finance Committee members with huge campaign contributions in order to obtain their cooperation."
Extrapolate this point to a significant number of Congressional players in health care policy making, how can they grow backbone if they are bought and paid for?
As long as Medicare monopolizes 1/3 of the health care industry, and insurance companies are government mandated and regulated into mini-monopolies, premium negotiations are no more than Big Government in-house squabbles.
Open up Health care to real competition (insurance companies operating across state lines, inexpensive insurance policies allowed for long-term catastrophic care only without having to include "everyday" or "regular" care where the real expense is), give more control to patients (employer contributions to HSA's, medical records and billings shown), allow private insurance companies to compete with the Medicare monster; then we'll see some REAL premium drops!
Of course government plays a role; need insurance pooling for catastrophic policies, high-risk patients (pre-existing conditions), the needy.
But the key is QUALITY HEALTH CARE DELIVERY. We have it today for the most part, better than anybody else, but since 1965 when Medicare passed government has built up control of much of the market: ONLY10% OF ALL HEALTH CARE PAYMENTS ARE NOW FROM THE PATIENT, as opposed to Medicare or Insurance Company reimbursements!
So open up health care; more patient, not government, control.
What will happen? At least two-thirds of the country will drop their insurance, because they won't be able to afford it. The charity hospitals and the free clinics will be hopping, but sooner or later, we will see medical costs coming down, the way it was before government went to bed with the insurance industry. Best of all? The insurance companies will once again compete for our business, or they will begin to die out.
With truly open competition and as people get more control over their health care prices should come down, and that includes insurance policies, which can be written for specific types of care (eg catastrophic only) rather than A to Z coverage for everything on every policy.
For those who fall through the cracks there'll be government sponsored pooling (like for high-risk auto insurance) and then plain old health care welfare for the indigent.
Will it work? Liberal doctor friends of mine think not, health care is an emotional purchase with no margin for error and must be a right, too much responsibility for us to handle ourselves.
Maybe. But I want as much responsibility as possible for my own health care, prefer paying cash where I can, doctors, etc. appreciate it, I get better service. Give me cheap insurance for long-term catastrophic stuff, big deductible from solid insurance company that meets minimum financial and actuarial guidelines.
Common sense to me. A Government monopoly isn't, for those that think so I say bring back the draft, put 'em in the military for 2 years, then see what they say about Government running the show!
They did the same thing with flood insurance. They went crying to the government and said we can't afford flood risks - their solution was to no longer insure the risk...which is why there is a National (single payer government run) Flood Program. The insurance companies adjust those claims, pay them and are reimbursed by the government for those payments and costs.
Rates are approved by state Insurance Commissioners. Companies have to prove to the Commissioners they need the rate increase in order to stay viable and be able to pay claims. Commissioners require companies to have reserves to pay their expected losses.
Where do you get only 10% coming from the patient? My policy is a 20% co-pay with a $1K deductible. Hardly 10%. And there are plenty of people out there with higher deductibles than mine.
Without government control, you would never be able to afford insurance.
When are people going to learn that we don't have to be victims of this kind of bull anymore? If 46 million people can get by without insurance, everyone can. Insurance can only own us if we let them. We could remind them that they work for us, they have been damn lucky to have become so wealthy off of us. We gave them their billions, and we can take them back.
When my SS was minimum, the same amount was deducted as those who received thousands.
When both SS and Medicare were increased, the increase was calibrated by percentages for
SS and the flat rate for Medicare. Do you see the difference there?
In the last five years, in 2007 to be exact, My interest and investments were increased,
so an extra $50 was deducted from SS to Medicare. Medicare is still the bargain of the ages.
We were paying a lot more for Blue Shield for less.
The greed exhibited by corporations needs to be held in check.
He should include a public option now, but he won't.
Remember the frequency that the word "CHANGE" came at us from Obama and his team during
the campaign? Words are not actions. I continue to hope for the best, President Obama--but my hope
is already being severely strained.
Example: I think the first step in the free trade disaster was during the Reagan administration. That was when all job applications were allowed to have a disclaimer at the bottom "reserving the right to terminate your employment at any time for any reason" and tax breaks for businesses that would trickle down to employees (never happened). Go back to policies before the trade act and set them straight, repeal free trade and just do it the way we used to, when we all had jobs.
The only thing difficult about going back to square one is convincing republicans that the move would be good for everyone. They know it won't be good for them.