If a thief promised a judge that he would never steal another car stereo again, and demanded his release under "the honor system," the judge would rightfully laugh at the thief's audaciousness. Then the judge would sentence the thief according to the law. Unfortunately, in America, that system of law only works for criminals like the petty thief.
Healthcare CEOs pocket an average of $14.2 million a year and the industry reports annual profits (PDF) of roughly $10 billion. Naturally, the American people (including 48 million uninsured and 25 million underinsured) threw a fit when these record profits were made public. When the Obama administration hinted that it might actually flex its tiniest regulatory muscles, the private health insurance companies freaked out and promised to play nice from now on.
"Playing nice" included halting their most criminal practices, like denying coverage to applicants with pre-existing medical conditions. This practice is very common, according to Wendell Potter, a former Cigna executive. "The reason they do that is so they can get rid of people who are more likely to use their insurance benefits," says Potter.
Insurance companies have been known to dump clients under the guise of a "preexisting condition" for frivolous reasons. A particularly nauseating example is Robin Beaton's ordeal with an insurance company. In June 2008, Robin was diagnosed with invasive HER-2 genetic breast cancer, a very aggressive form of this cancer. She needed a double mastectomy immediately, but when it came time for her surgery, her insurance company red-flagged her chart because of a "preexisting condition." The condition? Acne. Beaton testified before a congressional subcommittee:
The congressional committee found out that over the past five years certain insurance companies -- Assurant, Golden Rule and WellPoint -- had cancelled 20 thousand individual policies. But such behavior isn't "criminal" according to America's two-tier justice system. This kind of behavior is tolerable -- even commendable -- under Capitalism's pyramid scheme where millions of Americans suffer and pay into a system that may or may not be there for them when they get sick, and a few healthcare CEOs reap millions in rewards.
The only reason the insurance giants are promising to "play nice" now is because they were afraid a torch-wielding citizenry would finally come after them, resulting in the health industry's worst nightmare: universal healthcare. Terrified of the single-payer option, the health industry swore to stop their most monstrous practices.
Leading the way in this friendly approach to exploiting the needs of sick people is Karen M. Ignagni, the industry's chief lobbyist. Ignagni, who earned $1.6 million in 2007, just doesn't get why the mean ol' American citizenry is victimizing the poor, defenseless healthcare industry. She has been meeting privately with Senators, including Edward Kennedy, to "hammer out" the details of any future reform. Surely, any reform advocacy on Ignagni's part will ultimately be advantageous only for the healthcare industry (see: sinking the public option), and not the American people (see: a universal coverage plan).
Potter calls Ignagni's maneuvers "charm offensive." Only in the world of white-collar crime can charm get a criminal industry off the hook. Just imagine if a crack dealer tried to bat his eyelashes at a judge and smile sweetly in order to beat his charges.
This isn't the first time the health insurance giants have promised to behave themselves. Back in May, the industry promised to cut $2 trillion in costs over 10 years. Back then, Ignagni was at the forefront of the promise to trim the fat. She reportedly "contended that the voluntary cost-containment effort would help lawmakers who are aiming to craft health overhaul legislation by August." But at the time, many economists and lawmakers questioned how much the cuts would really help in coming up with a solution for the millions of uninsured. Turns out, the cuts didn't help much, nor were they mandatory. They were voluntary cuts the industry could make over the next decade (or not) depending on if anyone is still paying attention.
Now it's August, and Ignagni and Co. are privately meeting with Senators again, and they're probably making all kinds of sweet promises about really changing this time, and really looking out for the American people's interests. Such empty promises wouldn't hold up in a court of law if we were dealing with petty crooks and thieves, but this is Big Health we're talking about. And Big Health has Big Influence in Washington. Their empty promises carry a lot of weight, and the industry's influence may succeed in sinking the public option for good.