Read time: 3 minutes

Insurance Company 'Reform' Should Be Taken With Large Grain Of Salt

Michael Hiltzik in the LA Times. Go read it, it's a real eye-opener: The genius of modern marketing is pouring old material into new packaging. Over

Michael Hiltzik in the LA Times. Go read it, it's a real eye-opener:

The genius of modern marketing is pouring old material into new packaging. Over the years this has given us yogurt in tubes, prechopped salad greens in cellophane bags and, most recently, the health insurance industry's new image as a friend of reform.

In December, the industry's trade group, AHIP (for America's Health Insurance Plans) revealed that it had experienced an epiphany and decided for the first time to support the principle of universal healthcare -- insuring everyone in America, regardless of health condition.

It described its change of heart as the product of three years of sedulous soul-searching by AHIP's board of directors, who claimed to have "traveled the country and engaged in conversations about healthcare reform with people from all walks of life."

As a connoisseur of health insurance lobbying practices, however, I withheld judgment until I could scan the fine print. What I found by reading AHIP’s 16-page policy brochure was that its position hadn't changed at all. Its version of "reform" comprises the same wish list that the industry has been pushing for decades.

Briefly, the industry wants the government to assume the cost of treating the sickest, and therefore most expensive, Americans. It wants the government to clamp down hard on doctors' and hospitals' fees. And it wants permission to offer stripped-down, low-benefit policies freed from pesky state regulations limiting their premiums.

As for universal coverage, which is the goal of many reformers (if not yet the Obama administration), the industry will accept a government mandate to take on all customers, as long as all Americans are required by law to buy coverage.

[...] The insurance industry understands that at this moment, with the political establishment thinking reform, it pays to make nice. In a speech not long ago, Sen. Ron Wyden (D-Ore.), who has sponsored a bill that would unlink health coverage from employment but leave a role for insurance companies, warned the industry against trying to scuttle reform as it did under Clinton.

"I told them, if you do what you did then, you may hold off reform for a bit, but you will hasten the day when there's a government-run healthcare system," Wyden said.

The warning may have inspired AHIP Chief Executive Karen Ignagni to tell the Obama summit: "You have our commitment to play, to contribute and to help pass healthcare reform this year." (On the coy and noncommittal scale, this statement rates a 10.0.)

Ignagni can afford to be gracious because no specific reform plan is yet on the table. But veterans of the last reform battle warn that the moment concrete proposals appear, the insurance industry will deploy in force to kill anything that threatens its profitability and freedom of movement, such as an expansion of public insurance programs or tighter federal regulations.

No one should take the summit's atmosphere of good fellowship as a harbinger of what lies ahead. "Everybody's very 'Kumbaya' right now," observes Jonathan Oberlander, a healthcare reform expert at the University of North Carolina.

The insurers think government intervention is fine if it applies to customers they don't want. The way they put it in their reform plan is that we need a system that "spreads costs for high-risk individuals across a broader base" -- the base consisting of all taxpayers, that is.

Who are these "high-risk" individuals, by the way? At an AHIP convention last year, I heard a prominent industry consultant describe the customers the industry is desperate to dump on taxpayers as those with multiple chronic diseases, like diabetes sufferers with asthma or cancer patients with heart problems. He called these people "clinical train wrecks." (Nice way for someone connected with the "caring professions" to talk, isn't it?)

AHIP's commitment to an improved healthcare system is skin-deep. It endorses the quest for lower costs, more efficiency, and the fair and impartial resolution of claims disputes. Achieving these ends always has been within the industry's power, but it never seems to make any progress toward them.

Comments

We welcome relevant, respectful comments. Any comments that are sexist or in any other way deemed hateful by our staff will be deleted and constitute grounds for a ban from posting on the site. Please refer to our Terms of Service (revised 3/17/2016) for information on our posting policy.