New campaigns against big, private health insurers

Direct action, insurance company shareholder resolutions, divestment

The following remarks were presented at a workshop at a PNHP meeting in Chicago on May 22. Comments and suggestions are invited.
Rather than starting with a tired debate over whether the new health law – the Patient Protection and Affordable Care Act, or PPACA – is a step in the right or wrong direction[1], let’s consider the question at the heart of that debate: Will the reform bill result in the health insurance industry becoming stronger or more vulnerable?
The short answer to that question is that both scenarios are possible. We can then list ways in which we believe the industry may benefit and ways in which they may become more vulnerable.

From this perspective it doesn’t matter where you think the balance lies between them becoming stronger or more vulnerable. All the arguments for them becoming stronger are therefore arguments why we must keep working and growing our movement for single-payer national health insurance – an improved and expanded Medicare for All. All the arguments for vulnerability open up avenues for attack.
There are a variety of ways to make our case against the big health insurers. By criticizing them directly – by drawing attention to inherent problems they cause our health care system and all of us – we aim to weaken them. In their Securities and Exchange Commission filings (Form 10-K), the insurers list bad publicity as a risk to their future stock price, and they take this issue very seriously.
Here, then, are some suggested avenues for confronting the corporations:
1. Direct actions. This can range from old-fashioned letters to the editor to civil disobedience at regional or national corporate offices. Dr. Margaret Flowers and others have engaged in a wide variety of actions, including nonviolent civil disobedience. Kay Tillow (All Unions Committee for Single Payer Health Care) and others occupied the lobby of Humana’s corporate headquarters in Louisville last year; Humana, presumably fearing bad press, refrained from having them arrested. The activists still managed to get media attention that put Humana in a bad light. It was an inspiring action.
2. Shareholder actions. In 2006, my spouse Karen and I bought five shares in WellPoint (Ticker: WLP), which were then selling for about $65 per share, so we could attend the company’s annual shareholder meetings in Indianapolis and “speak truth to power.” You only need one share to attend, and since that time some additional single-payer advocates have acquired shares. Even though WLP is No. 32 on the Fortune 500, their annual meetings each May are typically boring and seldom attended by more than a handful of shareholders. It’s basically a formality. The agenda is simple. The board is introduced and a few of its members are re-elected, some other routine announcements are made, and the CEO makes a brief statement about how great a year the company had and how bright the future looks. At WLP meetings, there has been a time for Q&A once the business part of the meeting concludes, and an increasing number of us have used that time to shine light on the company’s problems and ask difficult questions. There is always some media presence there, and the press sometimes reports on our concerns. Incidentally, the price of admission for WLP is $55 a share today.
3. Shareholder resolutions. There is a long history of shareholder activism, and our own Dr. Quentin Young played a key part in developing this strategy, which I have written about in “Napalm, Big Health Insurance, and Divestment.” In 2008 and 2009, AFSCME and the Connecticut State Employees Pension Fund sponsored what is called a “Say on Pay” shareholder resolution on the WLP proxy, and despite the WLP board’s recommendation to vote against it, it polled over 40 percent in favor both years. That inspired me to write a resolution for this year’s meeting calling upon WellPoint to return to its nonprofit, Blue Cross roots. We successfully placed it on the WLP proxy: “WellPoint/Anthem Shareholders Revolt!” At the May 18 meeting, Say on Pay passed and our resolution received an amazing 9.4 percent of the vote: “30 Million WellPoint Shares Voted: Return to Non-Profit!”
Clearly, the real goal here was not for WLP to return to nonprofit status. The vote on our resolution could only be interpreted as a rebuff to the company’s management and board, and the amount of bad publicity was worth the effort we put into it, and then some. I think there are all sorts of resolutions that one might create aimed at any or all of the other Big Insurance Behemoths. There is a minefield of SEC regulations to navigate [SEC rule 14a-8], and there are those who can help you. A good starting place is this web site.
4. Proxy access. I informed the WLP board that next year I hope to receive a proxy access nomination as a candidate for their board. We will see how that plays out, as the regulations concerning it are still up in the air. More about it can be found in the “30 Million Shares” article linked above. This could generate some interesting stories.
5. The socially responsible investing (SRI) community. SRI is a small but very significant part of the investing world, and the potential impact here is tantalizing. Right now almost all mutual fund companies give some lip service to “corporate responsibility” (e.g. T Row Price) and most offer at least one “socially responsible” mutual fund for interested investors. A look at WLP’s investor list reveals that TIAA-CREF, the financial services company that mainly serves the academic community, is the 12th largest investor in WLP. Twenty different TIAA-CREF funds hold WLP stock, including three as specifically SRI funds. Their “Social Choice Account” holds over $25 million in WLP stock. Currently, as far as I have yet been able to determine, the SRI community doesn’t yet have the health insurance industry on its radar. Up to now they have been interested in whether companies are green, or into tobacco or weapons, etc. Wendell Potter speculates that insurance stocks may actually tend to be OVER-represented in SRI mutual funds because they are nonpolluting companies who up until now have skated by the “screens” used to determine “social responsibility.” There is a huge potential impact here.
6. The faith community. As you know, many national religious groups have official positions supporting single payer, and most have offices looking at faith-based investing, which is another way of saying SRI. The Presbyterian Church USA is headquartered in Louisville, and they recognize “Mission Responsibility Through Investment.” I am working with the Rev. David Bos, a Presbyterian minister from Louisville, to gain support for our resolution and the idea of divestment. It will be a slow process, but Rev. Bos has told me that he thinks we can gain their support. Not only are they already on record supporting single payer, they have taken a controversial stand for divestment from some firms doing business with Israel, specifically those involved with building the partition wall in Palestine. Divesting from health insurance companies seems relatively noncontroversial in comparison.
There are so many projects here for PNHP and Healthcare-Now members, so many churches, local and national. I have not had time to pursue any of these possibilities. I think the Methodists, Episcopalians, and the United Church of Christ are real possibilities to reach, not to mention the Quakers and Unitarians. Rev. Bos says that the churches will be watching each other, and so every bit of progress we make with one will help with the others.
7. Public employees (including teachers). Dr. Alice Faryna of PNHP/SPAN-Ohio in Columbus, is the leader here. She has mined data in Ohio on teachers and public employee pension funds. She would love to share her findings and ideas with others around the country. You can contact her by writing to info@pnhp.org. A look at the WLP list again shows a number of state pension funds listed, but many pensions are invested through institutional investors like BlackRock, No.1 on the WLP list.
8. A South Africa-style health insurance divestment campaign. This is the ultimate goal, admittedly ambitious, but potentially so powerful. I’ve discussed it more in the “Napalm – Divestment” article linked above. It will take time and work to build. University endowments hold huge amounts of health insurance stock, but it may not be easy to get that information (another research project for someone). A look at the WLP investor list below shows that most stocks are held in the name of the mutual fund or institutional investor (referred to as “street name”) rather than the ultimate owner of the stock. Getting college students to challenge their university endowment’s holdings could be an avenue to involving a demographic we would love to get involved in the single-payer movement
9. The business community – the sleeping giant. One potential result of these actions might be to gain the attention of businesspeople, the group we have the most trouble reaching and yet have the most to gain from a single-payer system.
As for additional resources on these ideas, I hate to keep pushing my Huffington pieces, but they do cover a lot of the background and include many links to other articles. One other background piece of mine not already cited above is “Fightin’ The Blues.”
To track the Big Insurance Behemoths, and to access loads of data from SEC filings, log onto a site like Yahoo Finance. Click on My Portfolios and set up a list of the large publicly traded insurance companies. Begin exploring all the information. I follow the seven largest, listed here with their name and market “ticker” abbreviation:
UnitedHealth, UNH
WellPoint, WLP
Aetna, AET
Cigna, CI
Humana, HUM
Coventry, CVH
Health Net, HNT
The PNHP web site, of course, has lots of material, e.g. “The Case For Eliminating Private Health Insurance” by Len Rodberg and Don McCanne.
A more recent Los Angeles Times piece, “What do we need health insurers for anyway?” is worthwhile.
That the insurance industry faces a potential “death spiral” remains a potent argument, most recently articulated by Paul Krugman in the New York Times, “California Death Spiral.” From a purer single-payer perspective, Dr. McCanne comments on how health insurance exchanges will risk the death spiral as well, “Health Insurance Exchange? Lessons from California.”
This has become plenty long, but hopefully will serve as a starting point for those interested in going deeper into this unexplored territory. I can’t overemphasize how new this project is, and how it can go in as many directions as we can think of to take it. It has the potential for coalition- and bridge-building, for involving new audiences, and for some old fashioned fun.
Remember: health care reform: We’re STILL FOR IT… and we’re not done yet!
[1] This debate has been and will continue to be contentious and divisive between on the one side PNHP, Healthcare-Now, and others, and on the other the HCAN coalition, many Democratic Congresspeople, etc.
[2] I heard Allan Hubbard speak at Indiana University last April on PPACA. He is a wealthy Indiana businessman, former top Bush administration advisor, and former WellPoint board member, and he spoke from an explicitly Republican perspective on the bill. Near the end he bemoaned the likely medical inflation that would result and predicted [direct quote]: “My guess is that in 15 years we will have a single-payer health plan, Medicare for All.” He explained that we don’t really appreciate what the insurance companies do for us, and that Congress and the people will turn on them as an obvious way to cut spending.
[3] We see this already with Warren Buffett announcing last month that he has sold all his stock in WellPoint and UnitedHealth, a million shares of each. Will they be deemed “too big to fail” is the real question.