The return of Harry and Louise: the Insurance industry strikes back
by tarheel74, Tue May 19, 2009 at 11:09:20 AM EDT
First off thanks to the people who recommended my previous diary. But on the heels of that diary comes this new one based on the developments of the day. I have made my suspicion for the theater being conducted in Senate by Max Baucus pretty well known. Seemingly the notion is if a public option is kept on the table as a threat, the insurance industry will come crawling like little misbehaving puppies wanting to be disciplined, in this case be regulated. But with each passing day it is becoming increasing apparent that not only are they against strict regulation, but they are willing to kill the nascent public option plan to maintain their monopoly, profiting on people's sickness and misery.
Earlier this month Karen Ignani, President and CEO of America's Health Insurance Plans (AHIP), told this to Senator Schumer about the public option:
There are a significant amount of Capital requirements that we need to meet, Medicare would have failed the capital test right now and so that is a very significant dollar figure that would have to be imbued into this plan and I know you've thought about that. The third issue is the payment issue...it would take a very long time, for government to develop the infrastructure to negotiate with physicians. Government doesn't have networks, can't put together networks, the Disease Management program failed in traditional Medicare and we all know why--because there's no predictability with respect to who's coming through the doors to the physicians' offices, etc.
However on May 11, President Obama had a chat with the AHIP representatives and made this statement:
"These groups are voluntarily coming together to make an unprecedented commitment," Mr. Obama said. "Over the next 10 years, from 2010 to 2019, they are pledging to cut the rate of growth of national health care spending by 1.5 percentage points each year -- an amount that's equal to over $2 trillion."
Which was received by an immediate push-back by the insurance industry, that stated that they made no such commitment:
In the bulletin, Richard J. Pollack, the executive vice president of the hospital association, said: "The A.H.A. did not commit to support the `Obama health plan' or budget. No such reform plan exists at this time."
Moreover, Mr. Pollack wrote, "The groups did not support reducing the rate of health spending by 1.5 percentage points annually."
Even at this juncture, the Baucus panel, instead if aggressively moving on a public option, was more focused on leveling the playing field, diluting the bill and making concessions to the insurance industry. The Republicans who have always been and always will be against any form of public option and healthcare reform got energized by new talking points from FrankLuntz, the architect one might say of the 1993 health-care defeat. While Sen. Baucus was still dreaming of a broad bipartisan health-care reform (read another white wash), today we have this from the Washington Post:
One week after the nation's health insurance lobby pledged to President Obama to do what it can to constrain rising health costs, Blue Cross Blue Shield of North Carolina is putting the finishing touches on a public message campaign aimed at killing a key plank in Obama's reform platform.
As part of what it calls an "informational website," the company has hired an outside PR company to make a series of videos sounding the alarm about a government-sponsored health insurance option, known as the public plan. Obama has consistently maintained that a government-run plan, absent high-paid executives and the need for profits, could be a more affordable option for Americans who have trouble purchasing private insurance. The industry argues that creating a public insurance program will undermine the marketplace and eventually lead to a single-payer style system.
[One can view the story boards here]
Now for a little history of BCBS-NC, my insurance provider, which basically has the entire state in a testicular vise grip. The state of NC runs its public plan through BCBS-NC, except the company has grossly over-charged administrative costs and on a bad fiscal year, when the entire country is hurting economically, when state employees are either being laid-off or being forced to take a furlough, the state finds itself in debt to BCBS-NC for hundreds of millions of dollars:
BCBSNC's behavior has led to disaster in North Carolina. Recently, the State Health Plan "came in $137.6 million off its budget for fiscal year 2008, resulting in a $79.7 million loss." Part of the problem was that BCBSNC's administrative "expenses cost $200.1 million more than planned." Its administrative expenses "have never been audited"
And if that is not enough Media Matters has compiled some of the most egregious violations committed by BCBS-NC over the years.
So here we are once again, deja vu, the battle lines are drawn, the usual suspects have revealed themselves for what they really are and what they care about. Yet somehow the Democratic majority senate (yes we are 1 vote shy of filibuster proof majority) is so intent on playing nice and being bipartisan (or maybe getting their corporate sponsors' back) that they cannot get themselves to go forward with intent on a public plan, that instead of playing on level field (whatever that might mean) will actually use its size to negotiate lower drug prices, negotiate lower hospital costs, have lower administrative costs and overall force the private players to lower costs and increase benefits. But unfortunately, much like Robert Reich, I do not see this happening. If we do not get a public option that does all the above, we will still see a lot of celebration in Washington but it will be a defeat for all the people who want REAL health-care reform.