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Working In These Times

Tuesday, Oct 13, 2009, 11:38 am

Will Health Industry Rattlesnakes Wake up Dems on Reform?

BY Roger Bybee

President Barack Obama listens to comments while meeting with healthcare stakeholders at the White House in May 2009. At right is Health and Human Services Secretary Kathleen Sebelius.   (White House photo by Pete Souza)

Even the most well-behaved nest of rattlesnakes can only wait so long before their rattles start twitching and shaking and they start launching themselves at the nearest available target in which to sink their fangs.

Yet somehow, the for-profit healthcare industry "blindsided" the White House healthcare team when they unleashed their venom in a new report warning that the Senate Finance Committee bill was insufficiently harsh toward consumers and would result in increased premiums. It was strategically timed, coming on the eve of today's Senate Finance Committee vote.

Hopefully, this warning was a necessary wake-up shock for the White House and many congressional Democrats about the fundamentally venal and venomous nature of the industry.

If they feel free to threaten premium increases now when the glare of public attention is upon them--via both news coverage and HCAN's hard-hitting "How to get rich" TV ads--what's to stop them from jacking up premiums once "reform has passed?

The insurers' threat should also remind Democrats and the public of the vast gulf between current Democratic proposals and what would be genuinely needed to produce fundamental reform.

Up until now, President Obama had been taking occasional gentle jabs at insurers but mainly boasting about the achievement of lining up America's Health Insurance Plans (AHIP) behind the cause of reform.

AHIP, by almost all measures, was coming out on top in the reform negotiations. An August 6 Business Week headline crowed, "Health Insurers Have Already Won." The insurers had already hauled in a 428% increase in profits from 2000-2007, thanks to the 131% increase in profit.

Moreover, the most potentially offensive provision to AHIP--a public option under which some of the uninsured could choose to join a public insurance plan--was already overwhelmingly voted down by the Senate Finance Committee. So the insurers get tens of millions of new paying customers, and 
ordinary families get stuck with either unaffordable health payments (a $5,000 deductible and $5,300 in premiums for a family making $54,000) or paying a fine for not obtaining insurance.

But the industry study, released Sunday, argues that the Senate Finance bill, as now written, would result in premium increases of $1,700 by 2013 (when the health reform would finally take effect) because with lowered fines not enough Americans would sign up.

AHIP's move was entirely predictable, according to former CIGNA communications director Wendell Potter, now a whistleblower working with the Center for Media and Democracy.

"AHIP did exactly what I expected," Potter told MSNBC Monday might. "They're trying to influence the Senate Finance Committee on the reduction of the penalties.

"Their number one priority is to make sure we all buy their insurance," Potter explained. "They're willing to take this step if it means that they won't get all the profits that they think that they should get."

If intended to throw a scare into the Senate Finance Committee to win even more goodies, the move has apparently backfired. It has reminded congresspeople and the public that the Democrats' current crop of reform proposals all allow the insurers to raise premiums any time they want,
without any process of justification, evaluation and potential disapproval.

Nor will any of the "public option" plans, as crafted thus far, exert much pressure on private insurers to hold down premium increases.

The lack of clear and definite controls on the insurers in the Democratic reform proposals means that much of the public, while watchful, is largely unenthused. Recent polling data shows that the public remains suspicious about the bill, with only 18% of Americans believing that health reform will improve their healthcare, according to a CBS survey

Americans are particularly troubled by the individual mandate to purchase insurance without gaining any control over the insurers. However, the prospect of an effective and universal public option radically changes how the public views the reform plans.

Health Care for America Now commissioned polling whose stunning results are summarized in memo now being circulated in Washington:

"Nationally," the memo reads, "voters oppose a mandate to purchase private insurance by 64% to 34% but support a mandate with a choice of private or public insurance by 60% to 37%... Each [survey] found that likely 2010 voters oppose 'requiring everyone to buy and be covered by a private health insurance plan' but support 'requiring everyone to buy and be covered by a health insurance plan with a choice between a public option and private insurance plans."

Similarly, a New York Times/CBS poll released Sept.25 produced almost identical similar results:

A  65% majority (with just 26% opposed--supported "the government offering everyone coverage in a government-administered health insurance plan--something like coverage that people 65 and over get--that would compete with private health insurance plan." 

A 47% plurality of Republicans favored such a plan.

The handwriting is on the wall to read, if the Baucus and the Blue Dog Democrats would bother to look. There is remarkably little confidence in or excitement about reform at this moment. On the contrary, there are actually indicators of significant resistance to reform if the individual mandate is imposed in isolation from substantive reforms.

So it's coming down to a choice between seriously alienating voters who put their faith in the Democrats to deliver real healthcare reform, or continuing to appease a greedy (but generous with campaign contributions) industry that serves only as a counter-produtive middleman in healthcare.

If the Democrats don't take the insurers' new offensive as a sign that they need to include some serious controls over premium increases and other socially irresponsible practices, they are inviting big trouble in the 2010 elections.

On the other hand, the prospect that Americans could choose to escape private for-profit insurance and impose some effective controls on their rapacious behavior would clearly generate massive public support.

Such a direction might not accomplish everything that single-payer advocates like me would like to see, but it would properly frame the central issue of future healthcare battles as that of controlling for-profit insurers.

Roger Bybee is a Milwaukee-based freelance writer and University of Illinois visiting professor in Labor Education. Roger's work has appeared in numerous national publications, including Z magazine, Dollars & Sense, The Progressive, Progressive Populist, Huffington Post, The American Prospect, Yes! and Foreign Policy in Focus. More of his work can be found at zcommunications.org/zspace/rogerdbybee.

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