Healthcare insurers get upper hand

Spencer Collins · #1 (**permalink**) 08-24-2009, 04:07 AM

Quote:

Obama's overhaul fight is being won by the industry, experts say. The end result may be a financial 'bonanza.'

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.

Opposition increased this month when boisterous critics mobilized at town hall meetings held by members of Congress home for the August recess.

The attacks, supplemented by conservative critics on talk radio and other forums, drew national attention.

Leading insurers, including UnitedHealth, urged their employees around the country to speak out. Company "advocacy hot line" operations and sample letters and statements were made available to an army of insurance industry employees in nearly every congressional district.

Some insurers supplemented the effort with local advertising, often designed to put pressure on specific members of Congress. Late in the spring, Blue Cross Blue Shield of North Carolina -- the home state of several conservative Blue Dog Democrats -- prepared ads attacking the public option.

Leading Democrats have fought back, with House Speaker Nancy Pelosi (D-San Francisco) last month calling the industry "immoral" for its past treatment of customers and suggesting insurers were "the villains" in the healthcare debate.

Still, recent support for the public option has declined, and the stock prices of health insurance firms have been rising.

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.

"It is vital that individuals, families and small-business owners have the flexibility to choose an affordable coverage option that best meets their needs," said Robert Zirkelbach, spokesman for America's Health Insurance Plans, the industry's Washington-based lobbying shop.

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.

Consumer and labor advocates acknowledged the industry's lobbying success.

In the first half of 2009, the health service and HMO sector spent nearly $35 million lobbying Congress, the White House and federal healthcare offices, according to data from the Center for Responsive Politics.

With more than 900 lobbyists, that sector -- whose top spenders are insurance giants UnitedHealth, Blue Cross Blue Shield and Aetna -- was poised to spend more than in 2008, a record lobbying year.

UnitedHealth spent the most, $2.5 million in the first half of 2009, and hired some of Washington's most prominent political players, including Tom Daschle, the former Senate majority leader who served as an informal health policy advisor to Obama.

"They have beaten us six ways to Sunday," said Gerald Shea of the AFL-CIO. "Any time we want to make a small change to provide cost relief, they find a way to make it more profitable."

Healthcare insurers get upper hand -- latimes.com

Well now...isn't that special?...

DownSouth · #2 (**permalink**) 08-24-2009, 08:26 AM

A line from an old song comes to mind:

"The rich get richer and the poor get poorer - but in the meantime - in between time - ain't we got fun?!"

The citizenry is screwed again.

.

GottaGo · #3 (**permalink**) 08-24-2009, 09:00 AM

If one were to contain all the hot air and fumes from the excess manure created by lobbyists, we would be able to fuel all those clunkers recently turned in.

lobbyists=kudzu

Mikeyy · #4 (**permalink**) 08-24-2009, 11:10 AM

They made a good point. The insurance companies don't care how we work it out. Bigger tax deductions, Coops, Subsidies. Anything that doesn't effect their profits. The pols won't hold them to covering preexisting conditions. We won't have portability. Nothing at all that will require these companies to comply. And that is what it is looking like will happen. All the health care discussion aside though. I am as worried about these industries control over our Representatives as I am that we are being soaked again. I don't care if its the financial markets, AIG, Military contractors. People are dealing with higher costs for everything we do. And wages are not keeping pace. In fact while insurers are making record profits American unemployment is heading for double digits. There is a tipping that is making all the gold flow away from the average citizen to huge companies that supply our elected officials with reelection money. And we have no real representation or power to control anything at all.
I understand normal debate over the issue some have over gov involvement in private business. But the complete hands off approach is why things are out of control. The bankers were allowed to lift regulations without congressional approval that allowed the out of control lending that created the huge bubble. But nobody to prosecute. AIG made huge profits insuring the world but in the end had no money to back up what they were selling. Again nobody to prosecute. Oil prices were obviously manipulated last summer. Trillions in overcharging. But nobody to prosecute. It is never ending. Now I watch the health care debate. And people that you should have respect for like Tommy Thompson, Orrin Hatch, Dick Armey, Charles Grassley, Bill Frist all do the bidding of these huge companies. And you know that its true because they have all repeated complete lies that they know are untrue. Death Panels, Insuring illegals. We know that those things were never part of anyones plan. Yet they repeat it anyway. If they were debating facts I wouldn't be concerned. But they lie with a little grin they can hardly control because they trust that there are a certain amount of scared seniors or others that will buy their BS. And again we will all keep paying more and more because this strategy works. Not to mention those partisans who fall in line for political reasons. Its a recipe that keeps paying dividends for them. And when in the end nothing changes some will have a thumbs up. Some will go broke some will lose their homes. But the pols and the companies they defend will do just fine. While the middle class shrinks.

Mikeyy · #5 (**permalink**) 08-24-2009, 03:58 PM

This is what the right is helping happen

Demonized by Democrats and ostensibly threatened with more government regulation, medical insurance executives have lobbied so successfully in Washington and the home districts of key lawmakers that they are poised to reap a financial windfall from the health-care overhaul.

"It's a bonanza," said Robert Laszewski, who tracks reform legislation as president of consulting firm Health Policy and Strategy Associates.

Health-care reform: Medical insurers poised to reap a healthy 'bonanza' -- chicagotribune.com

mlurp · #6 (**permalink**) 08-24-2009, 04:43 PM

I read it a bit differently...

Quote: These are a bad deal for consumers," said J. Robert Hunter, a former Texas insurance commissioner.

Consumer and labor advocates acknowledge the industry's recent success and attribute much of it to lobbying. In the first half of 2009, the health service and HMO sector spent nearly $35 million lobbying Congress, the White House and federal health-care offices, according to data from the Center for Responsive Politics.

"They have beaten us six ways to Sunday," said Gerald Shea of the AFL-CIO. "Any time we want to make a small change to provide cost relief, they find a way to make it more profitable." End Quote.........

Quote: Opposition ramped up this month when the idea was attacked by critics at town hall meetings hosted by members of Congress who were home for the August recess. The attacks, supplemented by conservative critics on talk radio and other forums, drew national attention. End Quote...

Seems the industry made the grab first.... And if you use the numbers in this report it is a reason to stop all talk about this HC and consider the comsumer
first.... Then start it all again...

DownSouth · #7 (**permalink**) 08-25-2009, 12:04 AM

Quote:

Originally Posted by Mikeyy

And people that you should have respect for like Tommy Thompson, Orrin Hatch, Dick Armey, Charles Grassley, Bill Frist all do the bidding of these huge companies. And you know that its true because they have all repeated complete lies that they know are untrue. Death Panels, Insuring illegals. We know that those things were never part of anyones plan. Yet they repeat it anyway. If they were debating facts I wouldn't be concerned. But they lie with a little grin they can hardly control because they trust that there are a certain amount of scared seniors or others that will buy their BS.

Don't expect any truth out of Dr. Frist - he's from here and you're right, he's lying and grinning. He's the "doctor" who said aids could be transmitted by sweat. And the doctor who was able to diagnose Terry Schiavo by looking at a video tape. And the one whose primary wealth comes from Health Corporation of America:

Quote:

Bill Frist - Wikipedia, the free encyclopediaFrist has a fortune in the millions of dollars, most of it the result of his ownership of stock in Hospital Corporation of America, the for-profit hospital chain founded by his brother and father. HCA paid over $1.7-billion in criminal penalties for Medicare fraud. Frist's 2005 financial disclosure form lists blind trusts valued between $15 million and $45 million.

Quote:

Hospital Corporation of America - Wikipedia, the free encyclopedia
The company was investigated by the government for Medicare and Medicaid fraud and paid a settlement of $1.7 billion, the largest fraud settlement in US history at the time. Then-CEO Rick Scott was ousted by the board of directors but he was not criminally prosecuted. Rick Scott was found to be heading the leading "astroturfing" group against Healthcare reform in the nation during 2009 - "Conservatives for Patients’ Rights"

Quote:

Frist Not Charged as Investigators Close Probe of His Hospital Stock Sales - washingtonpost.com
Ending an investigation that clouded the tenure of former Senate majority leader Bill Frist, federal prosecutors have decided not to file insider-trading charges against the Tennessee Republican for his sales of stock in a family-owned chain of hospitals.

The U.S. Attorney in the Southern District of New York and Securities and Exchange Commission staff sent Frist letters last week signaling that they had closed their joint, 18-month investigation. The letters essentially cleared him of wrongdoing.

Frist's father and brother founded HCA, which grew into the country's biggest hospital chain and last year became the subject of one of the largest-ever private investment buyouts, valued at $33 billion. The former senator fielded questions throughout his political career about the source of his wealth and whether his close ties to HCA influenced his position on health-care legislation and prescription drug prices.

At issue in the long-running investigation was the sale of all of Frist's remaining HCA shares by July 8, 2005, a few days before a downbeat forecast that sent HCA's stock price tumbling by 9 percent in a single day. Executives at the Equitable Trust and Northern Trust, who maintained Frist's stock in private accounts, sold the stock after receiving his orders.
Frist's older brother, Thomas, a board member and former chief executive at HCA, also had been the subject of government scrutiny. It appears that he will not be charged either, sources familiar with the probe said.

Although the Bush Justice Department found Frist not guilty of insider trading, HCA shareholders proved an “Enron” style scam and collected $20 million from HCA:

Quote:

Hospital Corporation of America - Wikipedia, the free encyclopedia
On July 1, 2005, Senator Frist sold all of his HCA shares two weeks before disappointing earnings sent the stock on a 9-point plunge. Frist claimed that he sold his shares to avoid the appearance of a conflict of interest if he ran for president. Other executives sold their stock at the same time. Shareholders sued HCA in a lawsuit alleging that the company made false claims about their profits to drive up the price which then fell when the company reported disappointing financial results. The lawsuit was settled in August 2007 with HCA agreeing to pay $20 million to the shareholders.

DownSouth · #8 (**permalink**) 08-25-2009, 01:27 AM

Quote:

Originally Posted by Mikeyy

There is a tipping that is making all the gold flow away from the average citizen to huge companies that supply our elected officials with reelection money. And we have no real representation or power to control anything at all. Now I watch the health care debate. And people that you should have respect for like Tommy Thompson, Orrin Hatch, Dick Armey, Charles Grassley, Bill Frist all do the bidding of these huge companies.

But the pols and the companies they defend will do just fine. While the middle class shrinks.

Oh, yeah, and about Tommy Thompson, the former Secretary of Health and Human Services - the fella in charge when Bush put through the Prescription Drug Plan, Medicare D. Just add it to the deficit, please. But withhold the real cost from Congress anyway. And be sure pharma and the insurance companies get theirs first.

Quote:

http://www.nytimes.com/2005/05/06/opinion/06krugman.html?_r=1A

A Serious Drug Problem

By PAUL KRUGMAN
Published: May 6, 2005
There was a brief flurry of outrage when Congress passed the 2003 Medicare bill. The news media reported on the scandalous vote in the House of Representatives: Republican leaders violated parliamentary procedure, twisted arms and perhaps engaged in bribery to persuade skeptical lawmakers to change their votes in a session literally held in the dead of night.

Later, the media reported on another scandal: it turned out that the administration had deceived Congress about the bill's likely cost.
But the real scandal is what's in the legislation. It's an object lesson in how special interests hold America's health care system hostage.
The new Medicare law subsidizes private health plans, which have repeatedly failed to deliver promised cost savings. It creates an unnecessary layer of middlemen by requiring that the drug benefit be administered by private insurers. The biggest giveaway is to Big Pharma: the law specifically prohibits Medicare from using its purchasing power to negotiate lower drug prices.

Outside the United States, almost every government bargains over drug prices. And it works: the Congressional Budget Office says that foreign drug prices are 35 to 55 percent below U.S. levels. Even within the United States, Veterans Affairs is able to negotiate discounts of 50 percent or more, far larger than those the Medicare actuary expects the elderly to receive under the new plan.After the drug bill's passage, Jacob Hacker and Theodore Marmor of Yale University estimated that a sensible bill could have delivered twice as much coverage for the same price.

Billy Tauzin, who shepherded the drug bill through when he was a member of Congress, now heads the Pharmaceutical Research and Manufacturers of America, the all-powerful industry lobby group, for an estimated $2 million a year. In his new job, he's making novel arguments against allowing Americans to buy cheaper drugs from Canada: Al Qaeda, he suggests, might use fake Viagra tablets to get anthrax into this country.

Meanwhile, Thomas Scully, the former Medicare administrator - who threatened to fire Medicare's chief actuary if he gave Congress the real numbers on the drug bill's cost - was granted a special waiver from the ethics rules. This allowed him to negotiate for a future health industry lobbying job at the very same time he was pushing the drug bill.

If all this sounds like a story of a corrupt deal created by a corrupt system, it is. And it was a very expensive deal indeed. According to the Medicare trustees, the fiscal gap over the next 75 years created by the 2003 law - not the financing gap for Medicare as a whole, just the additional gap created by legislation passed 18 months ago - will be $8.7 trillion.

That's about three times the amount President Bush proposes to save by cutting middle-class Social Security benefits.

mlurp · #9 (**permalink**) 08-26-2009, 01:00 PM

I agree as I have always said the first that need to go are LOBBYIST......

...... And we need to have free elections. Once the money is removed so will the vast corruption or most of it. And then the idea of a child growing up and might become POTUS/Congress/Senate person is a reality

Quote:

Originally Posted by Mikeyy

They made a good point. The insurance companies don't care how we work it out. Bigger tax deductions, Coops, Subsidies. Anything that doesn't effect their profits. The pols won't hold them to covering preexisting conditions. We won't have portability. Nothing at all that will require these companies to comply. And that is what it is looking like will happen. All the health care discussion aside though. I am as worried about these industries control over our Representatives as I am that we are being soaked again. I don't care if its the financial markets, AIG, Military contractors. People are dealing with higher costs for everything we do. And wages are not keeping pace. In fact while insurers are making record profits American unemployment is heading for double digits. There is a tipping that is making all the gold flow away from the average citizen to huge companies that supply our elected officials with reelection money. And we have no real representation or power to control anything at all.
I understand normal debate over the issue some have over gov involvement in private business. But the complete hands off approach is why things are out of control. The bankers were allowed to lift regulations without congressional approval that allowed the out of control lending that created the huge bubble. But nobody to prosecute. AIG made huge profits insuring the world but in the end had no money to back up what they were selling. Again nobody to prosecute. Oil prices were obviously manipulated last summer. Trillions in overcharging. But nobody to prosecute. It is never ending. Now I watch the health care debate. And people that you should have respect for like Tommy Thompson, Orrin Hatch, Dick Armey, Charles Grassley, Bill Frist all do the bidding of these huge companies. And you know that its true because they have all repeated complete lies that they know are untrue. Death Panels, Insuring illegals. We know that those things were never part of anyones plan. Yet they repeat it anyway. If they were debating facts I wouldn't be concerned. But they lie with a little grin they can hardly control because they trust that there are a certain amount of scared seniors or others that will buy their BS. And again we will all keep paying more and more because this strategy works. Not to mention those partisans who fall in line for political reasons. Its a recipe that keeps paying dividends for them. And when in the end nothing changes some will have a thumbs up. Some will go broke some will lose their homes. But the pols and the companies they defend will do just fine. While the middle class shrinks.

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