Can insurance company lobbying of federal health regulation be
turned into a gripping spy thriller? OK, no. But this is as close as it
gets… a Huffpost story by former insurance exec Wendell Potter.
He’s crystal-clear about the lengths to which for-profit insurance
companies will go, if it means they can keep their record profits and
obscene executive salaries at the expense of Americans struggling to
get or afford health care. And they’re assuming that no one is really
watching. Thanks, Wendell.
Some key points:
The reform law requires that numerous new rules be written to
regulate the way health insurers do business, a responsibility that
Congress passed on to various federal agencies and the National
Association of Insurance Commissioners (NAIC). …
The high financial stakes mean insurers have been pushing hard with
state regulators to allow for broader definitions of what constitutes
patient welfare expenditures. This issue is ‘probably the most
important one right now,’ explains a source.
The stakes are indeed high. One Wall Street analyst recently
calculated that if the new law had been in effect in 2009, the largest
for-profit health insurance companies would have been required to
refund almost $2 billion to their customers for that year alone. But
analyst Carl McDonald of Oppenheimer and Co. didn’t appear to be too
worried that insurers will ever have to issue many refund checks to
their policyholders. He even predicted that the stock prices of
for-profit insurers — which now dominate the industry — will shoot up
as soon as the NAIC bends to their demands.
"Managed care stocks are valued as if the law will be implemented as
written," McDonald wrote in a May 21 report for investors. When "reform
gets reformed," he added, managed care stocks should get a big boost.
Members of Congress wanted to be sure insurers spent considerably more
on medical care than on outrageous CEO compensation and overhead. But
under the category of "no good deed goes unpunished," they included
language in the reform law that will allow insurers to reclassify some
of their overhead expenses as medical expenses, so long as the money is
used to "improve quality." The problem is that the new law doesn’t
explain what that means. Congress gave the NAIC the responsibility of
deciding which expenses will qualify for reclassification. That’s why
the insurers have been conducting a PR and lobbying campaign to
influence the commissioners that is every bit as intense,
sophisticated, multipronged and deceptive as the one it conducted to
influence members of Congress.
For bloodcurdling details of how insurers are doing this, read the whole piece.
Want to know more?
Check out Consumer Watchdog’s letter to the Obama administration about insurers’ lobbying tactics,
and Consumer Watchdog’s comments to the regulators about the minefield of lobbyist demands.