Skip to main content

Wendell Potter: Health Insurance Industry Lacks Unified Opinion on Reform

 |  By cclark@healthleadersmedia.com  
   June 20, 2012

Wendell Potter is former vice president of corporate communications for CIGNA. He became a whistleblower in 2009 when he testified before the U.S. Senate about insurance company practices that limited coverage for policyholders. He is now a senior analyst for the Center for Public Integrity in Washington, D.C. and the author of "Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR is Killing Health Care and Deceiving Americans."

HLM: What do insurance companies want out of the Supreme Court's ruling on the constitutionality of the Patient Protection and Affordable Care Act?

WP: Their preference would be for the whole law to be upheld, because it would keep in place the individual mandate. The worst scenario for the industry is for the court to declare just the individual mandate unconstitutional, because then the industry would have to devote even more time and resources to get Congress to get rid of the consumer protections in the law than they already are doing.

They're already mounting a campaign to persuade policy makers and the public that the law just will not work without the individual mandate...and that will go into high gear. And ever since the law was enacted, they?ve been working behind the scenes to weaken the new consumer protections and regulations.

HLM: Some have said that the insurance industry is most concerned about regulatory oversight, and they don't like the funding the ACA has authorized for states to do that.

WP: The insurance industry is not of one mind. Blue Cross and Blue Shield of California is on the record [saying it would be] supporting the ACA. And many companies have begun to implement many aspects of the ACA, and expect it will be the law of the land.  I don't think there is one opinion. But what I think you'll see is that the big companies are okay with the law, as long as there continues to be a way to enforce the individual mandate and they are able to weaken or get rid of the consumer protections.

Many companies realize that their business models are just not sustainable over the long haul without some kind of external means to get more people into coverage.

HLM: You mentioned that the insurance industry in general doesn't like consumer protections. There are a lot of them in the law. Which ones is the industry targeting for removal?

WP: They don't like the requirements that restrict them from refusing to sell coverage to people because of pre-existing conditions. That prohibits them from charging older individuals more than three times as much as younger people, and they don't like the inability to use health status to base premium rates on. They don't like having to spend 80% of premiums on healthcare. And they don't like the limits placed on high deductible plans. Those are the things that will have more of an impact on the bottom lines for these companies.

HLM: Are you a single-payer advocate?

WP: I have never said that.  I have said a single-payer system would certainly be better than the system we have now because a single-payer system would have everybody covered, and other countries have shown that they have been able to control costs with a single payer system. Whether that's an ideal situation for the United States, I don't know. But single payer needs to be seriously considered, and it's a shame that it was never given a hearing by Congress during the debate.

HLM: In a New York Times article, former editor of the New England Journal, Marcia Angell, said the individual mandate is a terrible idea because it requires people to buy a commercial product from investor-owned businesses at whatever price the companies set, which she thinks will ensure that health costs would increase faster. What do you think of her logic?

WP: It's true the ACA doesn't give the Health and Human Services Secretary authority to reject extensive premium increases and there's not a new federal agency with that authority. But it does give the secretary authority to point out increases that are in excess of 10% that are unreasonable.

And there are other means. For example, some states are taking action to do just that, such as in California (where a ballot initiative that would give the insurance commissioner authority to reject excessive rate increases awaits signature verification for the November ballot.) Regulators in several other states already have that authority.

HLM: What will insurance companies do if the law is held unconstitutional?

WP: The insurers will probably try to make sure nothing more happens at all, or to hasten the trend to move more and more people into high deductible plans.

Regardless of court's decision, a lot of the industry's focus will be on trying to influence the implementation of laws at the state level in ways that are most beneficial to the industry.

The industry is playing a political game in which they're not saying on the record one way or another what they think about the constitutionality in the law, except in their amicus brief where they said the law doesn't work without the individual mandate.  But their political strategy is to get their allies to make the case that the law is not good, not in America's best interests, because if they can persuade lawmakers to oppose the law generally, they'll have a greater chance of influencing the elections in 2012.

They'll be very much involved in electing more members of Congress who would be reliable on votes for the next session. What they want is to have more friends in Congress to strip out those consumer protections. And they?d much rather have Mitt Romney in the White House than Barack Obama. A lot of our premium dollars will be funneled into organizations seeking to influence the elections this fall.

 

Tagged Under:


Get the latest on healthcare leadership in your inbox.