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The Progress Report: Health Insurer’s Practices Revealed

July 14th, 2009, 07:07 pm admin Leave a comment Go to comments

by Faiz Shakir, Amanda Terkel, Matt Corley, Benjamin Armbruster, Ian Millhiser and Nate Carlile

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In an interview with PBS’s Bill Moyers last Friday, former health insurance executive Wendell Potter spoke out against the practices of health insurance companies, stating that “it became really clear to me that the industry is resorting to the same tactics they’ve used over the years, and particularly back in the early ’90s, when they were leading the effort to kill the Clinton [health care] plan.” Potter said insurers seek to “drive down” costs by refusing to insure “unhealthy people,” a tactic borne out by the fact that 47 million Americans currently lack health insurance. The “insurance industry has been one of the most successful, in beating back any kinds of legislation that would hinder or affect the profitability of the companies,” said Potter, the former head of Corporate Communications at health insurance giant CIGNA. Last month, Potter told the Senate Committee on Commerce, Science, and Transportation that the industry, which once employed him regularly, drops sick policyholders so they can meet “Wall Street’s relentless profit expectations.”

In 1993, right-wing pundit Bill Kristol urged Republicans to block any health care proposal in order to prevent the Democrats from being seen as the “generous protector of the middle class.” Potter says similar tactics are being used this time around. In the spring, a memo by Republican strategist Frank Luntz outlined the script for opponents of health care reform. Luntz argued that a politician had to first pretend to support it, but should then use phrases like “government takeover,” “delayed care is denied care,” “consequences of rationing,” and “bureaucrats, not doctors prescribing medicine.” That jargon is now routinely heard by Republicans arguing against reform. Republican consultant Alex Castellanos recently authored a memo that urged conservatives to co-opt the cause of “bringing down health care cost[s]” in an effort to “slow this sausage-making process down” and “defeat” it. Potter told Moyers that conservative politicians “want to believe that the free market system can and should work in this country, like it does in other industries. … They parrot those comments, without really realizing what the real situation is.”

HOW INSURERS VIEW THE PUBLIC OPTION: Critics have charged that Obama’s proposal to enact a new public health insurance plan to compete directly with private insurers would lead to a “government takeover” of the health care system. Progressives have long argued that a public health insurance option is essential to controlling skyrocketing health care costs and achieving affordable coverage for all. Potter agrees, and argued that health care companies’ “biggest concern” is that the U.S. might adopt “a broader program like our Medicare program” which “could potentially reduce the profits of these big companies.” “The industry doesn’t want to have any competitor,” said Potter. “They certainly don’t want it from a government plan that might be operating more efficiently than they are.” He added that “we shouldn’t fear government involvement in our health care system. That there is an appropriate role for government, and it’s been proven.” Potter said that he doesn’t expect the public option to rid the health care system of financial incentive, but he does think it would keep insurers “honest” by offering a “standard benefit plan” that provides comprehensive coverage.

SMEARING MICHAEL MOORE: In his documentary SiCKO, filmmaker Michael Moore exposed the deplorable practices of the major health insurance and pharmaceutical companies in working to deny coverage to insured individuals. Armed with the deep pockets of the health care industry, a number of front groups — like Freedom Works, the Galen Institute, and the Heritage Foundation — lobbed personal insults against Moore (such as perpetuating the false idea that “healthy individuals” would “wind up subsidizing people like Moore”) in an effort to maintain the status quo. During the interview with Moyers, Potter said that health insurance companies developed a concerted strategy to radicalize Moore by labeling him a “Hollywood entertainer” while pushing to discredit SiCKO as pure “fantasy.” But Potter said that he thought Moore “hit the nail on the head with his movie,” which advocated that the government-run systems of other western democracies produce better health care outcomes. The health insurance companies “don’t want you to think that it was a documentary that had some truth,” Potter said. To push back on politicians, Potter said the industry routinely worked to defeat anyone who opposed their interests. The strategy included running ads, especially commercials in an elected official’s home district, making contributions to a competitor, and using “lobbyists and their own staff to go onto Capitol Hill and say, ‘Look, you don’t want to believe this movie. You don’t want to talk about it. You don’t want to endorse it. And if you do, we can make things tough for you.” Potter said the plan “worked beautifully” with politicians mouthing the “talking points that had been circulated by the industry.”

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