Wednesday, September 16, 2009

"The Insurance Industry Profit Protection and Enhancement Act"

Today Senator Max Baucus (D-MT), chair of the Senate Finance Committee, and his "Gang of Six" have released their version of health care "reform," which some say is the version that has the "best chance of passing." Bob Cesca points out that the bill is "bipartisan" only in that "members of both parties hate it."

According to the Associated Press, Baucus has received "some $3.9 million in contributions from the health care industry since 1989" and "all six of the Finance Committee members most intimately involved in drafting the measure have received above-average donations from the health care world."

Wendell Potter, senior fellow on health care at the Center for Media and Democracy and former CIGNA executive turned whistle-blower, who spoke at last weekend's Fighting Bob Fest (which I was privileged to attend) says the Baucus bill may as well be called the "Insurance Industry Profit Protection and Enhancement Act" and would be "an absolute gift to the industry."

Wendell Potter speaking at the Fighting Bob Fest,
Baraboo, Wisconsin, September 12, 2009

Potter says that, rather than representing a "government takeover," as some mistakenly fear, the bill represents a "Wall-Street takeover" of health insurance, requiring that the already severely squeezed middle class sign over its life savings to the health insurance cartel.

Rather than a robust public option, the bill promotes insurance co-ops, which according to Potter, "would be unable to compete in today’s concentrated health insurance markets" and therefore would be completely ineffectual at reducing health care costs.

David Dayen of Brave New Films says the bill attempts to bring costs down by allowing insurance companies to offer lousy coverage. According to the New York Times,
To compare health plans, experts often focus on the percentage of medical expenses paid by insurance, on average, for a given population. This figure ranges from 70 percent to 95 percent under the House bill’s options, but it would be less than 70 percent under Mr. Baucus’s proposal.
Not only would the coverage be lousy, but we would be forced to buy it or pay a stiff penalty. According to the New York Times, the bill "would require nearly all Americans to obtain coverage or face a penalty of up to $3,800 a year for families."

Appearing yesterday in a forum held by the House Democratic Steering and Policy Committee, Potter testified:
The insurance industry is insistent on being able to retain what it calls "benefit design flexibility." Those three words seem innocuous and reasonable, but if legislation that reaches the president grants insurers the flexibility they claim they must have and requires all of us to buy coverage from them, millions more of us will have little alternative but to buy policies that appear to be affordable but which will prove to be anything but affordable if we become seriously ill or injured. . . .

The Baucus plan . . . would create a government-subsidized monopoly for the purchase of bare-bones high-deductible policies that would truly benefit big insurance. In other words, insurers would win, your constituents would lose.

It's hard to imagine how insurance companies could write legislation that would benefit them more.
In other words, rather than being regulated, the health insurance industry would be free to maximize its profits, while it's large pool of captive customers would be the ones being regulated. Charming. This is what I meant when I said that "this legislation . . . could be very good. Or it could be very, very bad." Uh, this would be the "very, very bad" option. Unless, of course, you are a stockholder in the insurance industry cartel, in which case it is a veritable wet dream.

~ ~ ~

So, please call your representative—again—and demand real health care reform with a robust public option. No co-ops, no triggers. Ask if you can count on your representative to vote only for a strong public option and to vote against any bill that doesn't have a strong public option. Here's the number:

(202) 224-3121

Then report your call here. Thank you.


  1. Mary, I too was priveleged to disturb the Bobbers with questions that most of them could not or would not answer. Like how are we going to pay for all the government they want.'

    But to the subject at hand, did you NOT see the part of the Baucus bill that would tax insurance contracts 35% to pay for his version of OBamacare? If that is your or his idea of a level playing field, I would hate to see what either of you think a deck stacked in favor of "the public option" would look like.

    Sorry, but there is no free lunch. Much of current medical costs are due to previous market interventions by government. AND there is no constitutional provision, AND there is no way you can increase bureaucracy as these proposals do, expand coverage, expand regulation and have lower costs. Moreover,the country is already bankrupt, and this would insure a future of poverty for many of us, and our children and grandchildren.

    Ken Van Doren

  2. The fact that we pay more for less acceptable health care is a national shame. If you're good with the rich getting richer and the poor getting poorer and the middle class disappearing, then by all means, let's continue dancing to the tune of the corporate masters who brook no accountability and no limits to their profit-making machine.

    Sacrificing our neighbors and our future on the altar of unbridled greed is not what we're about as a nation. The Wall-Street-run health care system we have now will only get worse unless we institute a single-payer system or, at the very least, a robust public insurance option.

    Of course there's no free lunch. Who's asking for one? What we're asking for is affordable health care for everyone. Why is that so horrible or so hard?

    And why is it that we can drum up trillions of dollars for the dreadful wars in Iraq and Afghanistan, but as soon as we want to take care of our own people, all of a sudden we're bankrupting the country?

    Ken, I appreciate you reading the blog and commenting so respectfully. Really I do. But please explain, how did you find your way here, and why read a blog whose target audience you obviously are not? And why comment? What exactly are you hoping to accomplish?

    I do believe that respectful dialog is needed, which is why I posted your comment and why I'm responding. But I won't post comments from the right unless I have time to respond, which I rarely do. My purpose here is to rouse the left, not dialog with the right.

  3. We're going to pay for Medicare for all out of the money we save by no longer paying private health insurance premiums. Make no mistake: we are already being taxed to pay for health insurance. It's just a private tax, levied by powerful companies that increasingly own our politicians. And, we're not getting what we're paying it for. These insurers spend a large slice of our payments figuring out how to deny coverage to those likely to need it, deny benefits to those who do need it, and charge more than they pay out. Meanwhile, doctors and hospitals order unnecessary cat scans, tests, and procedures, to maximize the amount they can bill to insurance companies. Dropping our high-premium, low benefit private insurance in favor of Medicare will have several benefits: (1) we will pay less in taxes than we now pay in premiums. (2) eliminate the actuarial and bureaucratic burden of figuring out who not to insure. (3) since Medicare pays less than private insurers, reduce incentive of doctors and hospitals to order unnecessary tests to maximize profit. (4) remove corruption from our political system. President Obama received $20 million in campaign contributions from the health lobby. He is posed to reward them with a bill that will cost us $800 billion over 10 years, a bill written by health insurance lobbyists. Replacing private insurance with Medicare for all will remove this poison from national politics.


  4. Paul Krugman mistakes the "Affordable" Care Act as affordable to us.