The adoption of an amendment to create a strong public option, supported by Senator Jay Rockefeller, D-W. Va., and many others on the committee, is certainly job one. But there are many additional fixes that are necessary, including other amendments being offered by Senator Rockefeller. They are so important I have sent a letter to Senator Baucus and the other members of the committee urging them to adopt the Rockefeller amendments that will require private insurance companies to be more honest and transparent in their dealings with consumers and more accountable to federal and state governments that must regulate them. As I note in the letter, without those amendments, insurance companies will be able to continue their most discriminatory practices without either transparency or real accountability. Here is my letter:

September 23, 2009

The Honorable Max Baucus

Committee on Finance

United States Senate

219 Dirksen Senate Office Building

Washington, DC 20510-6200

Dear Chairman Baucus:

As a former health insurance company executive, I am very concerned about the lack of transparency and accountability in the health insurance industry. That is why I urge you to incorporate Senator Rockefeller’s Amendments #C12 and #C13 into the America’s Healthy Future Act (AHFA), in particular with regard to the need for airtight regulations to protect consumer interests.

As proposed, AHFA will allow insurers to continue many of their most discriminatory practices without either transparency or real accountability: cost-shifting to their most vulnerable members through benefit designs that serve the needs of Wall Street; and rationing of care based on arbitrary opinions about what care is needed. In addition, there is no accountability for insurance companies to provide affordable and comprehensive healthcare coverage. A requirement that everyone buy health insurance accompanied by subsidies for people with low incomes does not ensure that Americans will have affordable care. The explosive cost growth in Massachusetts after healthcare reform is a case in point. And, AHFA has no mechanisms to enforce the insurance regulations that are included.

In addition, AHFA designates the National Association of Insurance Commissioners (NAIC) to write key regulations. This is of great concern to me because this proposal delegates to the NAIC, a private organization, with rule-making authority that is generally reserved for an agency of the federal government. Any institution given the authority to define the rules that will determine health insurance coverage for millions of Americans must be completely independent of the insurance industry and have a demonstrated record of putting the concerns of consumers first. The institution must also have the will and the resources to carry out the rulemaking process in a transparent and unbiased manner, with opportunity for input from all interested parties at each stage of the process. Based on its traditional manner of conducting business, the NAIC fails to meet any of these standards. The NAIC does not operate independently of the insurance industry. In fact, the NAIC is a private corporation, funded, in large part, by the insurance industry itself. Without industry dollars, the NAIC would not operate as it does today. In addition, eight of the last 10 NAIC presidents, as well as numerous commissioners, have gone directly from their posts to industry positions, creating the distinct impression that leadership positions at NAIC are mere stepping stones to more lucrative careers in the insurance industry.

For all these reasons, as well as my inside knowledge of how easily insurance companies circumvent existing regulations, I support Senator Rockefeller’s Amendments #C12 and #C13 to AHFA, which will:

*Create a grant program for state insurance departments to help them better enforce market rules and protect consumers.

*Establish a federal role for private health insurance oversight and provide resources for the Department of Health and Human Services to hire expert staff to carry out these functions and coordinate with state regulators.

* Require health insurance plans to disclose clear, accurate, and timely information on their policies and practices to ensure that they do not circumvent new federal health insurance regulations.

* Add needed transparency requirements such as: establishing fair grievance and appeals procedures by health insurers; clarifying information for health professionals and freeing up time for patients by establishing transparency standards relating to reimbursement arrangements between health plans and providers; and requiring advance notice of plan changes so consumers get what they pay.

*Establish America’s Health Insurance Trust, a nonprofit, independent, consumer-driven organization that will evaluate and give ratings to all health insurance products offered through the National Health Insurance Exchange. Annual insurance product ratings will be based on factors such as affordability, adequacy, transparency, consumer satisfaction, provider satisfaction, and quality.

* Ensure that ombudsman offices in each state are open to consumers at all stages of the appeal process to allow for early intervention and increase the likelihood of successful appeals.

Health insurance reform requires that we not only create strong new consumer protections. It also requires that those rules be effectively enforced. American families and businesses must have health insurance that is accountable to them, not to Wall Street.

Thank you for your consideration.

Sincerely,

Wendell Potter, Senior Fellow on Health Care, Center for Media and Democracy

Cc: All Members of the Senate Finance Committee

 

One of the reasons I left my job at CIGNA, where I headed corporate communications and was part of the Legal & Public Affairs division, was because I did not want to be involved in yet another P.R. and lobbying campaign to kill or gut reform. I finally came to question the ethics of what I had done and been a part of for nearly two decades to influence decision making and bill writing on Capitol Hill.

When I testified before the Senate Commerce Committee in late June, I told the senators how the industry has conducted duplicitous and well-financed P.R. and lobbying campaigns every time Congress has tried to reform our healthcare system, and how its current behind-the-scenes efforts may well shape reform in a way that benefits Wall Street far more than average Americans. I noted that, just as they did 15 years ago when the insurance industry led the effort to kill the Clinton reform plan, it is using shills and front groups to spread lies and disinformation to scare Americans away from the very reform that would benefit them most. The industry, despite its public assurances to be good-faith partners with the president and Congress, has been at work for years laying the groundwork for devious and often sinister campaigns to manipulate public opinion.

The industry goes to great lengths to keep its involvement in these campaigns hidden from public view. I know from having served on numerous trade group committees and industry-funded front groups, however, that industry leaders are always full partners in developing strategies to derail any reform that might interfere with insurers’ ability to increase profits. My involvement in these groups goes back to the early ’90s when insurers joined with other special interests to finance the activities of the Healthcare Leadership Council, which led a coordinated effort to scare Americans and members of Congress away from the Clinton plan.

A few years after that victory, the insurers formed a front group called the Health Benefits Coalition to kill efforts to pass a Patients Bill of Rights. While it was billed as a broad-based business coalition that was led by the National Federation of Independent Business and included the U.S. Chamber of Commerce, the Health Benefits Coalition in reality got the lion’s share of its funding and guidance from the big insurance companies and their trade associations.

Like most front groups, the Health Benefits Coalition was set up and run out of one of Washington’s biggest P.R. firms. The P.R. firm provided all the staff work for the Coalition while an executive with the NFIB, which has long been a close ally of the insurance industry, served as a frontman.

One of the key strategies of the Health Benefits Coalition as it was gearing up for battle in late 1998 was to stir up support among conservative talk radio and other media. Among the tactics the P.R. firm implemented for the Coalition was to form alliances with important conservative groups, such as the Christian Coalition and the Family Research Council, to get them to send letters to Congress or appear at HBC press conferences. The Health Benefits Coalition also launched an advertising campaign in conservative media outlets. The message was that President Clinton owed a debt to the liberal base of the “Democrat” Party and would try to pay back that debt by advancing the type of big government agenda on healthcare that he failed to get in 1994. The tactics worked. Industry allies in Congress made sure the Patients’ Bill of Rights would not become law.

The insurance industry has funded several other front groups since then whenever the industry was under attack. It formed the Coalition for Affordable Quality Healthcare to try to improve the image of managed care in response to a constant stream of negative stories that appeared in the media in the late ‘90s and the first years of this decade. It funded another group with a different name about the same time when lawyers began filing class-action lawsuits on behalf of doctors and patients. Like the Health Benefits Coalition, this one, called America’s Health Insurers, was created by and run out of a powerful Washington-based P.R. firm.

The insurance industry called on that same firm again in 2007 to help blunt the impact of Michael Moore’s movie “Sicko.” The P.R. firm created and staffed a front group called Health Care America specifically to discredit Moore and to demonize the healthcare systems featured in the movie. The media contact for Health Care America was a vice president at the firm who had served previously in P.R. roles at the Blue Cross Blue Shield Association and in the Bush administration.

The P.R. firm also activated conservative allies and enlisted the support of conservative talk show hosts, writers and editorial page editors to warn against a “government takeover” of the U.S. care system. That is a term the industry uses often to scare people away from any additional involvement of the government in healthcare. Health Care America also placed ads in newspapers. One such ad, which appeared in Capitol Hill newspapers, carried this message, “In America, you wait in line to see a movie. In government-run health care systems, you wait to see a doctor.”

The P.R. firm’s work on behalf of the industry included feeding talking points to conservatives in the media and in Congress and placing columns and Op-Eds written for the industry’s friends in conservative and free-market think tanks like the American Enterprise Institute, Heritage, CATO, the Manhattan Institute and the Galen Institute.

With this history, you can rest assured that the insurance industry is up to the same dirty tricks, using the same devious P.R. practices it has used for many years, to kill reform this year, or even better, to shape it so that it benefits insurance companies and their Wall Street investors far more than average Americans.

The creation and funding of front groups and the use of shills on Capitol Hill and in the media are not the only tactics P.R. people use to support and enhance lobbying efforts. Other activities include, of course, the implementation of grass-roots and grass-tops campaigns. But a much more subtle tactic is to provide supposedly accurate and objective information to “educate” members of Congress and their staffs.

Business Week recently described how health insurers, United Health Group in particular, have been hard at work behind the scenes providing a treasure trove of data to key senators. If lawmakers believe the information and date the insurers are feeding them is comprehensive and objective, they are mistaken. Corporate representatives, especially the P.R. people who work with the media and who write talking points, are masters at the selective use of data and disclosing only the information their employers want to be disclosed.

What does this all mean for our country and our democracy?

During my 20 years in corporate communications and public affairs, I participated in the steady growth and influence of largely invisible persuasion — and at a time when newsrooms are shrinking and investigative journalism seems to be vanishing. The number of P.R. people long ago surpassed the number of working journalists in this country. And that ratio of P.R. people to reporters will continue to grow. The clear winners as this shift occurs are big, rich corporations and other special interests. The losers are average Americans, most of whom are completely unaware how their thoughts and actions are being manipulated to achieve corporate goals on Capitol Hill.