Consumer Choices and Transparency in the Health Insurance Industry

Testimony of Wendell Potter, formerly head of corporate communications at CIGNA
United States Senate Committee on Commerce, Science and Transportation
June 24, 2009

I know from personal experience that members of Congress and the public have good reason to question the honesty and trustworthiness of the insurance industry. Insurers make promises they have no intention of keeping, they flout regulations designed to protect consumers, and they make it nearly impossible to understand – or even to obtain – information we need. As you hold hearings and discuss legislative proposals over the coming weeks, I encourage you to look very closely at the role for-profit insurance companies play in making our health care system both the most expensive and one of the most dysfunctional in the world. I hope you get a real sense of what life would be like for most of us if the kind of so-called reform the insurers are lobbying for is enacted.

When I left my job as head of corporate communications for one of the country’s largest insurers, I did not intend to go public as a former insider. However, it recently became abundantly clear to me that the industry’s charm offensive – which is the most visible part of duplicitous and well-financed PR and lobbying campaigns – may well shape reform in a way that benefits Wall Street far more than average Americans.

http://commerce.senate.gov/public/_files/PotterTestimonyConsumerHealthInsurance.pdf

Wendell Potter, a former CIGNA executive, provides an insider’s view as to what type of behavior we can expect from the private insurance industry after reform is enacted. No matter the details of the reform legislation, the industry will always find innovative ways to advance the interests of their executives and their investors. It is absolutely inevitable that these innovations will be to the detriment of patients and payers.

Many suggest that we can control these abuses through regulation, but states that are already highly regulated have failed to counter the ingenuity of the insurers and their perverse innovations. Think of New York and the UnitedHealth/Ingenix scam, or WellPoint’s perpetuation of the rescission abuses. As regulators patch holes in the private insurance infrastructure, the industry will always find other innovations designed to punch even larger holes in the system. If we think underinsurance is a problem now, just wait until Congress has enacted reform and moved on to other issues.

The private insurance industry isn’t looking out for us. Congress shouldn’t be looking out for them. We need our own universal financing system designed specifically to take care of all of us. The private insurers are pulling us down; Congress needs to cut them loose.