The Health Care Industry vs. Health Reform

A insurance industry insider speaks out against the for profit insurers and gives his take on why we need a public option. And in a reversal of position the AMA now says it is open to a public option. The AMA suggests an expansion of the Federal Employee Health Benefit Program, the program that is offered to Congress and other federal employees. Under the FEHBP there is an abundance of plans to choose from but it is yet to be seen if those plans would be cost effective for lower income families.

Democrats on a key Senate committee have devised a new plan with a public option that reduces the cost of the plan from the earlier proposed plan that cost $1 trillion and left millions uninsured.

The Obama administration took the health care reform show on the road yesterday with a town hall meeting in Virginia. President Obama made it clear in that meeting that doing nothing is not an option and that health care reform is imperative if the country is to have a full economic recovery.

The Health Care Industry vs. Health Reform

By Wendell Potter

I’m the former insurance industry insider now speaking out about how big for-profit insurers have hijacked our health care system and turned it into a giant ATM for Wall Street investors, and how the industry is using its massive wealth and influence to determine what is (and is not) included in the health care reform legislation members of Congress are now writing.

Although by most measures I had a great career in the insurance industry (four years at Humana and nearly 15 at CIGNA), in recent years I had grown increasingly uncomfortable serving as one of the industry’s top PR executives. In addition to my responsibilities at CIGNA, which included serving as the company’s chief spokesman to the media on all corporate and financial matters, I also served on a lot of trade association committees and industry-financed coalitions, many of which were essentially front groups for insurers. So I was in a unique position to see not only how Wall Street analysts and investors influence decisions insurance company executives make but also how the industry has carried out behind-the-scenes PR and lobbying campaigns to kill or weaken any health care reform efforts that threatened insurers’ profitability.

I also have seen how the industry’s practices — especially those of the for-profit insurers that are under constant pressure from Wall Street to meet their profit expectations — have contributed to the tragedy of nearly 50 million people being uninsured as well as to the growing number of Americans who, because insurers now require them to pay thousands of dollars out of their own pockets before their coverage kicks in — are underinsured. An estimated 25 million of us now fall into that category.

What I saw happening over the past few years was a steady movement away from the concept of insurance and toward “individual responsibility,” a term used a lot by insurers and their ideological allies. This is playing out as a continuous shifting of the financial burden of health care costs away from insurers and employers and onto the backs of individuals. As a result, more and more sick people are not going to the doctor or picking up their prescriptions because of costs. If they are unfortunate enough to become seriously ill or injured, many people enrolled in these plans find themselves on the hook for such high medical bills that they are losing their homes to foreclosure or being forced into bankruptcy.

What I saw happening over the past few years was a steady movement away from the concept of insurance and toward “individual responsibility,” a term used a lot by insurers and their ideological allies. This is playing out as a continuous shifting of the financial burden of health care costs away from insurers and employers and onto the backs of individuals. As a result, more and more sick people are not going to the doctor or picking up their prescriptions because of costs. If they are unfortunate enough to become seriously ill or injured, many people enrolled in these plans find themselves on the hook for such high medical bills that they are losing their homes to foreclosure or being forced into bankruptcy.

REST OF ARTICLE

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2 Responses to The Health Care Industry vs. Health Reform

  1. William Chirolas says:

    I normally post as “papau” so my ID still required at least a minimal effort to find (all the bio details are posted under “papau” but it takes a small search – “papau” is just the Greek word for grandfather). When I saw Mr. Potter posting I decided to directly support his comments under my actual name.

    Health insurance via the casualty companies is only a slightly worse situation than my world of health insurance – including “long term care” – as administered by the life insurance companies. On the life insurer side we had the same 65% of premium not going to benefits on some policy forms situation, with only group health insurance for massively large companies getting reasonable percentage of premium payouts – with the smarter large companies dropping the “insurance” concept and cost altogether and just getting actuarial support and claims administration. But the attitude on the life side was to never hide what was going on.

    When I first saw the casualty insurance lobbyists at work, I was horrified. How could these people spread so much partial truth in a way that was in the end a telling of a lie? How could they pretend there was “innovation” in anything coming from the health insurance industry. My first job was working with Ed Bartleson and Jim Olsen adding a few items to the amazing accomplishment that was their paper on “Reserves for Individual Hospital and Surgical Expense Insurance”, a paper that put on solid footing a new industry and ended the need for massive “claim variation” margins in premiums that was the standard causality approach. Over the next 40 years adjustments for new benefits – new medical procedures – was the only “innovation” I ever saw. State politics made scarce premium dollars available to “alternative medicine” and chiropractors – the latter a profession based on a theory known to be nonsense (although the hands on emphasis of the chiropractor did do one “good” in forcing MD’s to stop the “minimize patient contact” attitude that had built up over the years).

    There is no “innovation” coming from the health insurance industry – there is only new ways to tie everyone to just one insurer. Indeed in most states health insurance is a shared monopoly for less than a handful of companies, with it not unheard of to have one company having more than half the coverage in a state.

    I look forward to Mr. Potter’s future articles.

  2. skyagunsta says:

    The evening news had a snippet of Obama’s town hall meeting yesterday in Virginia where, a woman who was formerly employed, is now suffering from a 9th occurrence of a cancerous tumor, has no employment, therefore no healthcare, and therefore, no way to pay for her health care …. Obama’s answer was to say, “come here [whatever the name of the woman was] and give her a hug. Please! the woman might need a hug, but that is not going to give her healthcare. She needs a President who will buck the system and who will say, “healthcare, like medicare, an entitlement for all.” That was Hillary’s way. It needs to become Obama’s way.

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