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Richard Kirsch

Richard Kirsch

Posted March 2, 2009 | 03:32 PM (EST)

The Honeymoon's Over: Health Insurance Companies Waste No Time Saying No to Obama's Plan


For months the health insurance lobby had been saying this time would be different. They insisted they'd support health care reform and even launched a whole phony "campaign" and "listening tour" to front the charade. But the day after the Obama administration took the first real step towards fixing health care in our country -- including $634 billion in the budget -- the health insurance front group known as AHIP (America's Health Insurance Plans) got up and walked out the door.

President Obama proposed two ways to pay for his down payment on reform. One was raising taxes on families who earn more than $250,000. The other was forcing health insurance companies to compete to offer Medicare plans. This would stop companies from over-charging and get rid of billions in wasteful spending. AHIP put out a statement rejecting the second part.

For those who dreamed health insurance companies -- who make a profit off denying health care -- would take a kinder, gentler stance this time around, this was your wake up call. For those trumpeting "A new day!" "A new consensus!" "We're all in the together!" on health care, this is where the rubber met the road.

Last August, the infamous Harry and Louise made a comeback. They were the couple featured in health insurance industry ads that helped sink Clinton's health care plan back in 1994. When they returned to TV this past fall, the insurance lobby welcomed them with open arms. AHIP accepted an invitation to the ad's debut press conference and cheered the couple's new message: "Whoever the next President is, health care should be at the top of his agenda." This time, though, the insurance lobby didn't pay for the ads. Harry and Louise were hired by a handful of consumer groups and another long-time opponent of reform -- the National Federation of Independent Businesses (NFIB) -- in what was loosely branded a "strange bedfellows" coalition. It afforded AHIP excellent cover and allowed them to continue to pretend they were going to support real change.

But the insurance industry only backs reform that protects -- better still, boosts -- its bottom line. That's always been true and became crystal clear once again as soon as President Obama proposed raising $176 billion for health care reform by putting an end to Medicare overpayments. The proposal's not complicated. Private health insurance companies have been ripping off the government, and President Obama wants to save money by making it stop. He wants health insurance companies to go through a new competitive bidding process. AHIP -- seeing less zeros tacked onto its profits -- now claims that having to compete would mean a "major disruption" to Medicare. It sounds ridiculous because it is.

AHIP has also made it clear it will do everything it can to oppose another competitive feature of Obama's health care plan -- giving Americans a choice of a public health insurance plan to compete with private insurance. AHIP understands that if private companies have to compete with a public health insurance plan -- which like Medicare is likely to do a better job of controlling costs than private insurers -- they will lose customers and money.

Our new president isn't fooled by the AHIP charade. In last Saturday's Weekly Address he said, "I know that the insurance industry won't like the idea that they'll have to bid competitively to continue offering Medicare coverage, but that's how we'll help preserve and protect Medicare and lower health care costs for American families... and I know they're gearing up for a fight as we speak. My message to them is this:

"So am I."

On March 10th and 11th, AHIP is holding its "National Policy Forum" at the Ritz-Carlton in Washington, DC. They've even invited some consumer groups to speak at the conference in order to keep up appearances. But make no mistake: the private health insurance industry hasn't changed one bit. It's got slicker rhetoric and new friends but the same old game -- charge more, pocket more, cover less. We intend to stand with the President to fight the special interests like AHIP, and we ask Congress to do the same.

We don't intend to take the fight for quality, affordable health care for all in 2009 lying down.