It’s livelier Saturday at the National Association of Insurance
Commissioners meeting in Seattle. Most refreshing was a medium-sized
street demonstration, with forays into meeting rooms, by young and old
demonstrators protesting lobbyist influence on health care reform. They
handed out "lobbyist disinfectant packs," including soap and face
masks, and demanded that regulators do their job for consumers. The
sponsor was the "Puget Sound Alliance for Retired Americans," and it
was backed by Health Care for America Now, a national group that is
finally engaging with vigor on regulation issues.
it was great to
see ordinary folks cutting through the statistics and actuary-speak to
see that it’s their health reform at stake here. Here’s a pair of the
most cheerful demonstrators:
Just as important, I got a copy of
another lawyer letter circulating among the regulators. It’s by the
giant O’Melveny and Myers, the firm to go to if it’s clout you want,
and addressed to the house lawyers at America’s Health Insurance
plans–the for-profit insurance industry’s chief lobbyist.
letter "analyzes" the Aug. 10 letter from six Congrtessional committee
chairs, which made it clear that Congress never intended to let
insurance companies deduct every tax on every part of their business
when they’re calculating how much they spend on actual health care.
Insurance companies are arguing the opposite–demanding that they get
to deduct even taxes on invesments when from their premium revenue
before making the calculation, which has the effect of artificially
boosting what they says they’re spending on health care.
content of the letter is zombie legalese, but the nature of it is
explosive: It’s a naked message to regulators, at the NAIC and Health
and Human Services, that if the issue doesn’t go the way the insurance
lobby wants it, the insurers will see the government in court.
the final paragraph: "The August 10, 2010 letter [from Congress]
should not be construed a permissible basis for construing the statue
to include the limitations the letter suggests, and it should not be
given interpretive weight by the NAIC, HHS or any court."
It’s not the first lawyer letter on the point of tax deductions, but it’s certainly the clearest. Very "our way or the highway."
finally, there’s what I’d call a "firm rumor" that the NAIC is about to
cave in to the insurance lobby on another huge point that will further
trash the effectiveness of requiring 80% to 85% minimums for spending
on health care.
Unbelievably, the NAIC may agree in a vote
(probably Tuesday) to let insurance companies deduct their sales
fees–i.e. payments to insurance brokers for selling you a policy–
before calculating the medical care ratio. This is a
multibillion-dollar amount nationwide, and brokers get paid every year
that you keep a policy.
If that happens, it will amount to a
sellout of major proportions. I’ll be delighted to eat every word of
this if the rumor proves wrong, but we heard yesterday that some
commissioners were already backing the industry on broker fees.
the insurance lobby wins on all of these lobbying issues, the number they publish for the percentage they are spending on
health care will be meaningless. Health reform will fail from the
beginning to contain insurance costs.
What the NAIC sends to HHS
will be a proposal, not a done deal. HHS has every right to send back
the lobbyist language and demand regulations that actually do what the
law asked–to make insurance companies operate more efficiently, with
less overhead, maybe some smaller CEO salaries, and no dedicated right
to ever-rising profits.
And finally, the old joke is really true: You can tell a lobbyist by the suit that costs a month of your salary.