Insurance Companies' Reaction to Congressional Plan: 'Hallelujah!' That Ain't Good.
By Susie Madrak Monday Aug 24, 2009 2:00pm
I am thoroughly disgusted by Obama's lack of effective leadership on this - and Congress's willingness to lard the bill for their contributors at our expense. It's very important that we keep the pressure on, because if we don't, we're going to be saddled with a very expensive dog of a health care "reform" bill.
I suggest you send this story to your congress creature and ask what they intend to do to protect our interests:
Reporting from Washington - Lashed by liberals and threatened with more government regulation, the insurance industry nevertheless rallied its lobbying and grass-roots resources so successfully in the early stages of the healthcare overhaul deliberations that it is poised to reap a financial windfall.
The half-dozen leading overhaul proposals circulating in Congress would require all citizens to have health insurance, which would guarantee insurers tens of millions of new customers -- many of whom would get government subsidies to help pay the companies' premiums.
"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.
Some 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 bills vary in the degree to which they would empower government to be a competitor and a regulator of private insurance. But analysts said that based on the way things stand now, insurers would come out ahead.
"The insurers are going to do quite well," said Linda Blumberg, a health policy analyst at the nonpartisan Urban Institute, a Washington think tank. "They are going to have this very stable pool, they're going to have people getting subsidies to help them buy coverage and . . . they will be paid the full costs of the benefits that they provide -- plus their administrative costs."
One of the Democratic proposals that most concerns insurers is the creation of a "public option" insurance plan. The industry launched a campaign on Capitol Hill against it, grounded in a study published by the Lewin Group, a health policy consulting firm that is owned by UnitedHealth Group. The lobbyists contended that a government-run plan, which would have favorable tax and regulatory treatment, would undermine private insurers.
More Kabuki. After reading Taibbi's article, It's clear the public option is already gutted and not worth fighting for in its present form.
[...] Undermining support for the public option wasn't the only gain scored by insurance lobbyists.
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.
Most group health plans cover 80% to 90% or more of a policyholder's medical bills, according to a report by the Congressional Research Service. Industry officials urged that the government set the floor lower so insurers could provide flexible, more affordable plans.
[...] Consumer advocates argue that a lower government minimum might quickly become the industry standard, placing a greater financial burden on patients and their families.
"These are a bad deal for consumers," said J. Robert Hunter, a former Texas insurance commissioner who works with the Consumer Federation of America.
Meanwhile, companies would probably see a benefit by providing less insurance "per premium dollar," Hunter said.
"It would be quite a windfall," said Wendell Potter, a former executive at Cigna insurance company who has become an industry whistle-blower.
