This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.
Health Insurers Funded Chamber Attack Ads
By Peter H. Stone
January 12, 2010
Just as dealings with the Obama administration and congressional Democrats soured last summer, six of the nation’s biggest health insurers began quietly pumping big money into third-party television ads aimed at killing or significantly modifying the major health reform bills moving through Congress.
That money, between $10 million and $20 million, came from Aetna, Cigna, Humana, Kaiser Foundation Health Plans, UnitedHealth Group and Wellpoint, according to two health care lobbyists familiar with the transactions. The companies are all members of the powerful trade group America’s Health Insurance Plans.
The funds were solicited by AHIP and funneled to the U.S. Chamber of Commerce to help underwrite tens of millions of dollars of television ads by two business coalitions set up and subsidized by the chamber.
In late October, (AHIP President Karen) Ignagni wrote in a letter to the Washington Post defending a health insurer-funded study critical of congressional cost estimates, “Let me be clear and direct, health plans continue to strongly support reform.” However, by that time money was already flowing through AHIP to the chamber to fund its negative ads.
The fundraising started last September and continued through December using AHIP as a conduit to avoid a repeat of the political flak that hit the insurance industry after it famously ran its multimillion-dollar “Harry and Louise” ads to help kill health care reforms during the Clinton administration.
AHIP’s December 2008 proposal for reform (pages 7-11):
This is not a simple Gotcha! The largest private insurers in the nation have been caught red-handed, secretly passing funds through their lobby organization, AHIP, to the United States Chamber of Commerce to help fund the Chamber’s advertising campaign opposing the reform proposal currently before Congress.
AHIP’s Karen Ignagni repeatedly has professed publicly to “strongly support reform,” yet has now been caught in this dishonest scheme campaigning in opposition to the current proposal. When you read AHIP’s proposal for reform (link above), you will see that it almost could be used as a description of the legislation. That is no surprise since it essentially was written by the private insurance industry. The legislation contains virtually every major policy that they requested.
So why should the insurers be involved in this effort to sabotage the bill? The answer is in two parts: what they don’t like about the current legislation, and what they do like about the status quo.
As the bill moves along in the late stages towards enactment, Karen Ignagni has stated many times that this bill does not require the government to do enough to control health care spending. The industry has been struggling with innovations in health plans to slow the increase in premiums, which are already placing a strain on individuals and businesses. Health care costs are so high that they can no longer provide insurance products with affordable premiums if those products are designed to provide adequate protection from financial hardship for those who actually need health care.
Working with Congress, the Congressional Budget Office, and now academically-compromised Jonathan Gruber, the industry has seen that their proposal must leave perhaps tens of millions without insurance, and leave the majority of working families with plans set at actuarial values that are so low that anyone who needs health care will still face major bills. The answer to this problem was to be found in the subsidies, but for them to be adequate would require a massive increase in government spending. Neither Congress nor the Obama administration were willing to consider the massive tax increases that would be required to make this work.
Increasingly unaffordable premiums for plans with diminishing benefits increases the instability of the private insurance market. The insurers should rightfully fear that the time is not far away when our policy makers would decide that we finally would have to replace the insurance industry with an efficient single payer system that actually would provide everyone the essential care that they need. They know that they cannot possibly deliver of the promise of affordable health care for everyone.
So what do they like about the status quo? The largest, healthiest, least expensive sector – the employer-sponsored market – is still working very well for them. In fact, that market would change very little with the current legislation, though the insurance industry would be inconvenienced with some additional regulatory oversight. The private Medicare Advantage plans are working well for them as well, but they would not be as lucrative under the reform proposal. The individual market works well for them because they can skim off the healthy, but they would have to include the high-cost chronically ill under the reformed system, making plans even less affordable.
Why would they want to comply with all of the other measures in this bill when they already have most of what they want, and they are very effectively avoiding what they don’t want? If they can kill this bill, they would be much better off.
What we have now is not working – too many are uninsured, and too many of the insured still face excessive medical bills. What this legislation proposes will not work – too many would remain uninsured, and too many of the insured would still face excessive medical bills. What we could have, an improved Medicare for everyone, would work – everyone would be insured, and no one would have to face excessive medical bills. Furthermore, as a nation, it would provide us with a financing system that we could afford, unlike our current system or the system in the flawed proposal.
AHIP, Aetna, Cigna, Humana, Kaiser Foundation Health Plans, UnitedHealth Group and Wellpoint have lied to us, telling us that they support reform while secretly spending millions on a campaign to defeat it. Congress and President Obama now have every reason to show these crooks the door, and they should do so immediately.
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