Senator Kennedy Shouldn’t Give In To HMO Demands

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Washington D.C. — Consumer Watchdog wrote a letter to U.S. Senator Ted Kennedy (D-MA) urging that he continue to protect patients consistent with the principles he has articulated during his 40 year career by demanding a strong public health plan in the Senate’s health care overhaul and resisting mandatory purchase of private insurance policies.

Download Consumer Watchdog’s letter to Senator Kennedy.

As the health care reform debate intensifies following the Easter recess, the U.S. Senate is under extreme pressure from the insurance industry to abandon a robust “public option” like opening Medicare to all who wish to buy into it.  In the letter, Consumer Watchdog wrote:

“The right to health care you have championed is not the same as the requirement to buy a private insurance policy,” the consumer advocates wrote Kennedy. "Don’t let the institution of the United States Senate use your name and credibility for something that goes against the principles you fought for your entire life."

Consumer Watchdog, a non-partisan and non-profit consumer advocacy group, reminded Kennedy of his strong statements about distrusting health insurance companies whose financial interests skew their policy recommendations toward increasing profits at the expense of patients. In 1971, prior to the passage of the HMO Act, which Senator Kennedy authored to organize the then-nonprofit HMOs, Kennedy said:

“We cannot expect those with vested interest in the system as it currently exists to support the reforms which are so badly needed. … The insurance industry has been content to pass the skyrocketing costs of medical care onto the consumer, without ever attempting to effectively to control those costs."

In the letter, Consumer Watchdog wrote of today’s insurer lobbying to curb reforms and require Americans to buy private insurance policies:

"What industry calls compromise—the mandatory purchase requirement—is really capitulation to its demands for a captive market and a taxpayer-funded bailout. . . . You have had more experience than anyone else in Congress of the insurance industry’s broken assurances.  They will not change their world.  You have to change it for them, and a true public option to for-profit insurance is the only sure way to do it."

Consumer Watchdog pointed out that Senator Kennedy could not have predicted in 1973 when President Nixon signed the HMO Act that HMOs would largely shift from non-profit to for-profit companies.  Kennedy did acknowledge the devastating effect of the for-profit health insurance system on patients in a 1992 speech to the Health Insurance Association of America, more than two decades into his battle for U.S. health care. Speaking directly to the insurers, Kennedy said:

“Your private sector role has unquestionably made the crisis worse. … The message sent out by too many of your member companies is unmistakably clear: don’t insure anyone unless you think they won’t get sick.  And if you make a mistake, do your best to walk away from it.  Do all you can do to stop Congress from acting.”

The letter also praised Kennedy’s notable victories, including the federal Children’s Health Insurance Program, the Health Insurance Portability and Privacy Act and legislation allowing the newly unemployed to purchase continuation of their health insurance.

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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.

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