Insurance Industry Up To Its Old Tricks
May 6th, 2011
Wendell Potter seems to be the only guy out there who understands what the Insurance industry is doing with the Health Care Reforms. He also seems to be the only guy who understands what the Republicans are trying to do to our health care system. I am sure there are others, but Potter seems to be the go to guy if you want the low down on the dirty business of health care lobbying. He should know, he was a PR man for the industry for a long time. Then he got religion, or maybe a decent offer, and joined the other side. It is a good thing too, the President is doing a crappy job explaining what he is doing with health care legislation. It seems that this industry, as with almost all industry, the controlling interests at the top are doing a pretty good job of blocking reform legislation and miss-informing the public as to what is really going on.
Domestic politics are a mess. We all know that. Many of us are about ready to simply shut the whole thing down and start over again with some kind of people's democracy. Problem is, democracy takes eternal vigilance. You have to stay on top of the politicians or they will make deals with special interests that may not be to your benefit as a citizen. Recallable representation with a simple vote of the majority would help there, but that could easily be manipulated by moneyed interests the way the proposition process has been undermined by money here in California. Look at the Tea Party. It started as Astro-Turf, spending wealthy Koch Brothers seed money until it got enough middle aged white men to join in to create a movement. Democracy is dangerous without economic democracy to go along with the power to vote.
Under American capitalism, we the people are not supposed to have any say as to what goes on in the private sector, while the capitalists, through their lobbyists get to have all sorts of input in the governing bodies. Personally I think that sucks. I think the Germans and Scandinavians have a better idea there with workers on the board of directors of companies mandated by law. They think it is proper for workers to have a say on issues of their economic welfare. So do I. We need to get rid of this mentality that says let the rich get richer because they are the only ones familiar with handling money. Using that logic, pleasure should be left to the beautiful people in the entertainment business. And we might as well invite the Queen back, since royalty obviously are the only ones who know how to rule. We simply must get our hands dirty and learn how to run our world by and for the people. Or we will find that somebody else has the wealth, pleasure, and power.
There is a decent overview in the article "Worker representation on boards of directors: a study of competing roles", in Industrial and Labor Relations Review.
http://www.highbeam.com/doc/1G1-11061499.html
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From Center for Media & Democracy's PR Watch
GOP's Medicare Plan Would Be a Windfall for Insurers
Submitted by Wendell Potter on April 21, 2011 - 12:47pm
Rep. Paul Ryan (R-Wisconsin)Rep. Paul Ryan's plan to privatize Medicare would accelerate a trend started several years ago by corporate CEOs and their political allies to shift ever-increasing amounts of risk from Big Business and the government to workers and retirees.
If enacted, the Ryan plan would represent a windfall of unprecedented proportions for insurance corporations and other businesses.
For millions of average Americans, many of whom already are finding it impossible to save for retirement, it would represent financial calamity. The nation's middle class would pay dearly for Ryan's proposed shredding of the social safety net that Medicare currently provides.
Ryan, chairman of the House Budget Committee, wants to dismantle the Medicare program and replace it with a system of vouchers. Starting in 2022, the government would give the average 65-year-old Medicare beneficiary $8,000 a year to buy coverage from a private insurer. That's the amount health care analysts estimate will be what Medicare will spend on every 65-year-old in 2022 if the government doesn't turn it over to private insurance companies.
While that might sound fair on the surface, it would actually be a very bad deal for people who turn 65 that year, compared to those who turn 65 in 2021. That's because commercial insurance plans are much more expensive, and operate far less efficiently, than the current Medicare program.
Insurers Spend Less on Medical Care, More on Executive Pay, Marketing
The amount of money commercial plans actually spend to pay medical claims has been declining rapidly over the past several years, while the amount they spend on administrative activities such as marketing and underwriting — and to pay executives and reward shareholders — has been increasing. That's why Congress included a provision in last year's health care reform law to require insurance firms to spend no more than 20 percent of their policyholders' premiums on overhead. By contrast, the current Medicare program spends just 3 percent of its budget on administration.
The nonpartisan Congressional Budget Office (CBO) says the $8,000 voucher won't be nearly enough for seniors to buy comparable coverage from private insurers and pay the additional out-of-pocket costs that those insurers would require them to pay. The amount the average 65-year-old would have to shell out to buy private insurance in 2022, according to the CBO, will actually be $20,510. Seniors would have to pay the difference — $12,510. If Medicare is not privatized, the difference would be $6,150.
Ryan Plan: Insurers' Dream Come True
Here's why this would be a dream-come-true for the insurance industry: The more health plan enrollees have to pay out of their own pockets, the less insurers have to pay for medical care. The money that insurers avoid paying out in claims goes straight to their bottom line — and into shareholders' pockets.
Insurers have been shifting more and more of the cost of care to their policyholders over the past several years by enticing — or pushing — them into plans with ever increasing deductibles. This trend is part of what Yale professor Jacob S. Hacker called "the personal responsibility crusade" — making people more responsible for the management and financing of the major economic risks they face — in his 2006 book, "The Great Risk Shift."
This crusade has been led by Republicans and insurance company executives who have been saying for years that the best way to control medical costs is for Americans to have more "skin in the game." That's an expression that former Aetna CEO Jack Rowe used often before he retired in 2005, the year he made $22.2 million. It was also a sound bite favored by the CEO I used to work for, CIGNA's Ed Hanway, before he retired in 2009. Hanway's total compensation that year was almost $111 million.
Author Wendell Potter, former head of PR for CIGNAThe problem is, most Americans have far less skin to put in the game than CEOs like Rowe and Hanway or even Rep. Ryan, who makes $174,000 as a member of Congress. The median household income in the United States was just $49,777 in 2009, which was down $335 from 2008.
That decline, by the way, was the continuation of another trend that began as the Clinton era was ending and the George W. Bush era was beginning. Median household income in the United States peaked in 1999 at $52,388 (adjusted for inflation). It fell more than $2,000 during the eight years of the Bush administration.
During that time, health costs rose dramatically. According to the Kaiser Family Foundation, the average annual health insurance premium for family coverage increased from $5,791 in 1999 to $13,770 in 2010. The average amount that workers contributed out of their own pockets for family coverage increased from $1,543 to $3,997.
Ryan's Plan Will Throw the Elderly Back into Destitution
With household incomes declining, Americans have had far less money to put into retirement. According to a recent survey conducted by Opinion Research Corp. for America Saves and the American Savings Education Council, less than half of current workers are saving enough to have a "desirable standard of living in retirement."
If workers are having this much difficulty saving for retirement, where in the world will they find the money to pay what Rep. Ryan would make them pay for Medicare coverage when they turn 65?
Ryan's "blueprint" is one that will take America back to the pre-1965 days when senior citizens were losing their homes and their farms to pay for medical care. They were becoming destitute — and dying much earlier than they are today — because insurers would not sell them coverage because they were too much of a risk to insure, and there was no safety net for them.
That's exactly the same place future senior citizens would find themselves if Ryan's plan to privative Medicare ever becomes public policy.
http://www.prwatch.org/node/10643
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From Tucson Sentinel
Are insurers writing health reform regulations?
Columnist Wendell Potter says consumer advocates may be getting rolled
Posted May 5, 2011, 2:04 pm
Wendell Potter Center for Public Integrity
One of the reasons I wanted to return to journalism after a long career as an insurance company PR man was to keep an eye on the implementation of the new health reform law. Many journalists who covered the reform debate have moved on, and some consider the writing of regulations to implement the legislation boring and of little interest to the public.
But insurance company lobbyists know the media are not paying much attention. And so they are able to influence what the regulations actually look like—and how the law will be enforced—with little scrutiny, much less awareness.
At a January meeting of several hundred patient and consumer advocates in Washington, a top aide to Health and Human Services Secretary Kathleen Sebelius all but pleaded with those in the audience to bombard the Obama Administration with messages insisting that the law be implemented as Congress intended. Rest assured, he told them, that the insurance industry's lobbyists were relentless in their demands that the regulations be written to give them the maximum slack.
One example: a section of the law expanding the rights of consumers to appeal adverse decisions made by their health plans.
"The Affordable Care Act will help support and protect consumers and end some of the worst insurance company abuses," read an Obama administration fact sheet read from last summer.
The fact sheet went on to assure us that the new rules would guarantee consumer access to both internal and external appeals processes "that are clearly defined, impartial, and designed to ensure that, when health care is needed and covered, consumers get it."
"In implementing this law, we have worked to end the worst insurance company abuses, preserve existing options and slow premium increases," an administration official said. "Through it all, protecting consumers has been — and remains — our top priority."
Regulations irk insurance companies
The rules, originally scheduled to go into effect July 1, 2011, were actually written by the National Association of [State] Insurance Commissioners (NAIC), which was tasked by Congress to develop several important regulations required by the law. If the law is implemented as the NAIC recommends, patients will be able to get an external appeal of a broad range of coverage denials, including denials that result from an insurer's decision to rescind, or cancel, a patient's policy—not just denials made on the basis of "medical necessity" as determined by the insurer.
The NAIC's standards also say that insurers must provide consumers with clear information about their rights to both internal and external appeals and that the companies must expedite the appeals process in urgent or emergency situations.
Well, surprise, insurers don't like being told what to do by regulators. So they're pushing back hard. Consumer advocates who have been in meetings at the White House in recent weeks say they believe the administration is bending over backward to accommodate the insurers.
"We have reason to fear that the external appeal regs won't be very consumer friendly," said Stephen Finan, senior director of policy for the American Cancer Society Action Network.
Finan and representatives of several other consumer and patient rights organizations, including Consumers Union, the National Partnership for Women and Families and the American Diabetes Association, wrote officials in the Departments of Labor and Health and Human Services in late January pleading with them to "stand firm for consumers" in rejecting several of the insurance industry's demands.
They expressed concern that the final regulations would allow insurers to stack the decks against patients by allowing health plans to deem a second-level internal appeal of a denial as meeting the requirement for an independent external appeal. They're also worried that health plans will not be required to provide clear and understandable information to policyholders about their denial decisions, that the plans will not provide adequate translation of written communications into other languages (insurers are claiming this would be too burdensome), and that they will be able to take as long as 72 hours (instead of the recommended 24) to decide an urgent appeal.
Equally as frustrating for the consumer advocates is the administration's indication that they will give the insurers until January 1, 2012, rather than July 1, 2011, to comply with the regulations.
Administration slows process
Consumer advocates say the administration has told them that the reason it is proposing to delay the effective date of the new rules for half a year is to accommodate the health plans' enrollment cycles and marketing needs. Health plans do need adequate lead time to make changes to their systems and to prepare materials to inform their customers of new procedures, especially in multiple languages, so some of their push back is understandable. The new regulations also will add to the insurers' administrative costs, and the new law limits how much they can spend on overhead.
But the consumer groups believe the administration itself has caused some of the problems by taking so long to finalize the regulations. The NAIC got its work done comparatively swiftly.
"There is a clear pattern of leaning toward the insurance industry more than consumers," one of the patient advocates told me.
The consumer advocates, most of whom not so long ago were applauding the Democrats for getting reform enacted, even if it fell short of their original goals, are becoming increasingly discouraged, partly because there are so many more lobbyists for the insurers than for consumers. It's hard to compete with them.
"We're outnumbered 100 to 1," said one of the consumer advocates."
It's clear," he added, "that the insurers are willing to make life more difficult for patients" by trying to weaken and delay the consumer protections.
It's also clear that, at least for now, the insurers seem to have the upper hand in dealing with the White House.
Reprinted by permission of The Center for Public Integrity.
News analyst Wendell Potter, a former insurance company executive, is the author of "Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR Is Killing Health Care and Deceiving Americans."
http://www.tucsonsentinel.com/opinion/report/050511_potter_insurance/are-insurers-writing-health-reform-regulations
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