News Truth: Insurers sing ‘Hallelujah’ for weak health reform

Published on

It turns out that all the health reform fear and fury about pulling the plug on Grandma and creeping socialism (or is it Nazism?) will benefit one very elite group: health insurance companies. If the so-called public option stays dead, and government requires Americans to buy insurance, ‘reform’ will be a huge profit machine. As a great LA Times story reports today:

"It’s a bonanza," said Robert Laszewski, a health insurance executive
for 20 years who now tracks reform legislation as president of the
consulting firm Health Policy and Strategy Associates Inc.

insurance company leaders continue to profess concern about the
unpredictable course of President Obama’s massive healthcare
initiative, and they vigorously oppose elements of his agenda. But
Laszewski said the industry’s reaction to early negotiations boiled
down to a single word: "Hallelujah!"

The insurers’ success so
far can be explained in part by their lobbying efforts in the nation’s
capital and the districts of key lawmakers.

The lobbying efforts–$31 million worth–included pushing the employees of the nation’s biggest insurer, UnitedHealth, to participate in protests aimed at intimidating members of Congress who favor any reform, particularly a publicly run option to the insurers (a tactic the major oil companies are adopting to squelch the big global warming bill in Congress).

[Insurance] company "advocacy hot line" operations and sample letters and
statements were made available to an army of insurance industry
employees in nearly every congressional district.

Some insurers
supplemented the effort with local advertising, often designed to put
pressure on specific members of Congress. Late in the spring, Blue
Cross Blue Shield of North Carolina — the home state of several
conservative Blue Dog Democrats — prepared ads attacking the public

The result? "[R]ecent support for the public option has declined, and the stock prices of health insurance firms have been rising."

The success of the blitz by insurers and their health industry allies, from showering contributions on key lawmakers to sowing public fear, may also kill guarantees that insurance will really cover you when you get sick.

For instance, insurers are lobbying hard in the Senate to shift more costs onto patients. Currently, most employer-sponsored health plans cover 80% to 90% of health care costs. That will change if insurance companies get their way. From the Times story:

In May, the Senate Finance Committee discussed requiring that insurers
reimburse at least 76% of policyholders’ medical costs under their most
affordable plans. Now the committee is considering setting that rate as
low as 65%, meaning insurers would be required to cover just about
two-thirds of patients’ healthcare bills. According to a committee
aide, the change was being considered so that companies could hold down
premiums for the policies.

Cheaper premiums mean nothing if the copays and deductibles are so high that you can’t afford to go to the doctor. It’s a burden that falls heaviest on the working class and middle class.

The story is well-reported, written without resorting to anonymous sources, and sticks to provable fact. It’s also the first major news media report I’ve seen that focuses one, and plainly describes, the power and intent of the insurance industry. Too many reporters are scrambling to be first with the "horse race" reports about which committee is doing what, and to whose political benefit. That emphasis doesn’t serve the larger debate, or public education about health reforms.

So congratulations to the LA Times and reporters Tom Hamburger and Kim Geiger. May other MSM reporters follow their path.

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

Latest Videos

Latest Releases

In The News

Latest Report

Support Consumer Watchdog

Subscribe to our newsletter

To be updated with all the latest news, press releases and special reports.

More Releases