Wendell Potter, former CIGNA executive wrote yesterday,

There are so many problems with the health care reform bill proposed by Senator Max Baucus (D-MT), chair of the Senate Finance Committee, it is little wonder that members of his committee have proposed more than 500 amendments to fix it. Unfortunately, some of the worst amendments that would make the bill even more of a gift to the health insurance industry are being offered by Republicans. If there is a God in heaven, they will not be adopted. But many other amendments are vital, including those that will make this key bill more like the better bills that have been reported out of four other Congressional committees. All of those bills call for the creation of a public insurance option, which is an absolutely critical element of reform. Without it, all of us who are not eligible for an existing government-run program, like the Medicare and VA programs, will be forced to buy coverage from the private insurance industry, which is dominated by a cartel of huge for-profit companies.

The adoption of an amendment to create a strong public option, supported by Senator Jay Rockefeller (D-WV) 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 health care 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 health care 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

[Source: Center for Media and Democracy]

Members of the Senate Finance Committee, yesterday, September 29, 2009  rejected Senator Rockefeller’s proposed amendment to the America’s Healthy Future Act even though each of them had Potter’s letter dated  September 23, 2009. Wonder if any of them even read his letter.

Olbermann and Wendell Potter are talking about the Baucus health reform bill. Democratic Senator Max Baucus [Wikipedia] [SmartVote] [OpenSecrets], in my view, has sold out the American people, particularly Democrats, with his proposed health care reform bill. He is so embedded with the health insurance industry and their financial support of him that he has forsaken his constituents (which in a broad sense includes us all) in favor his personal concern to retain his position of power. In short, being owned by the for-profit insurance industry, he believes he can retain his Senate seat.

[Read more →]

Wendell Potter [Wikipedia] — the insurance industry whistle blower and former communications director of health insurance giant Cigna — called the Baucus framework “an absolute gift to the industry.” “And if that is what we see in the legislation, [America’s Health Insurance Plans chief] Karen Ignagni [Wikipedia] will surely get a huge bonus,” Potter said at a briefing for reporters.

The bill establishes a new regulated health insurance exchange and compels every American to purchase qualified health insurance coverage by 2013. Americans with employer-sponsored insurance can stay in their existing plans, while the uninsured would have to enroll in an expanded Medicaid program, a new plan in the Exchange or the now-regulated individual health insurance market. According to a report released by the Congressional Budget Office, the bill would cover 94% of Americans and cost $880 billion over 10 years.

Potter argued that the lax employer requirements would shift the cost and risk of coverage onto the individual and maintained that the bill’s “network of cooperatives” would be unable to compete in today’s concentrated health insurance markets. “The co-ops won’t stand a chance,” he concluded.

Reform must also do more to regulate insurers, who have agreed to accept applicants with pre-existing conditions but are insisting on benefit and rate flexibility. Potter argued that the benefit package standards in the Exchange and the high deductible option for younger beneficiaries would allow insurers to design almost anything that they can sell in the health market place and push the country towards consumer driven health care.

Under the Baucus legislation, private insurers could also charge older individuals up to five times more for coverage. “You’re just using age as a proxy for health status,” Uwe Reinhardt, an economics professor at Princeton University told the New York Times. Reinhardt estimates that “Senator Baucus’s age-rating plan would allow insurers to cover roughly 70 percent of the additional risk they’d take on by being required to accept all comers, regardless of health.”

Baucus and Congress is owned by the corporate health care industry.

Source: Think Progress

by Anthony D. Weiner [VoteSmart] [OpenSecrets] a Democrat representing New York’s 9th Congressional District in today’s Huffington Post

As President Obama prepares to address the nation about his vision for health care reform, we should not overlook the last, best truly transformative change to our health care system: Medicare. We have been staring so intently at the lessons of 1993 that we may have forgotten the universal rule of successful lawmaking: “keep it simple.”

During the eleven town hall meetings I’ve held around my district, I’ve had some direct experience with the anxiety this debate has produced. Much of the fear comes from two groups: those who have Medicare and don’t want it changed and those who have never had a government-run reimbursement system like Medicare and are worried about the impact it will have on their quality of care.

In both cases, a calm, reasoned and vigorous defense of the American single-payer plan is just what the doctor ordered.

The truth is that the United States already uses single-payer systems to cover over 47% of all medical bills through Medicare, Medicaid, the Veterans Administration, the Department of Defense and the Bureau of Indian Affairs.

[Read more →]

Wendell Potter cringes when opponents suggests that a “government takeover” of health care will be a milestone on the road to “socialized medicine.” He’s embarrassed that opponents are using a playbook that he helped devise, Nicholas Kristof, two time Pulitzer winning columnist of the New York Times, wrote. [Salt Lake Tribune]

“Over the years I helped craft this messaging and deliver it,” Potter noted.

Potter was a former executive of CIGNA. The “for profit” insurance industry is obsessed with sustaining the company’s stock price — which means paying fewer medical bills.

One way to pay fewer medical bills is to deny requests for expensive procedures.

A second way is “rescission” — seizing upon a technicality to cancel the policy of someone who has been paying premiums and finally gets cancer or some other expensive disease.

A congressional investigation into rescission found that three insurers, including Blue Cross of California, used this technique to cancel more than 20,000 policies over five years, saving the companies $300 million in claims.

Potter notes that a third tactic is for insurers to raise premiums for a small business astronomically after an employee is found to have an illness that will be very expensive to treat. That forces the business to drop coverage for all its employees or go elsewhere.

The insurers are open to one kind of reform — universal coverage through mandates and subsidies, so as to give them more customers and more profits. But they don’t want the reforms that will most help patients, such as a public insurance option, enforced competition and tighter regulation.

Potter argues that much tougher regulation is essential. He also believes that a robust public option is an essential part of any health reform, to compete with for-profit insurers and keep them honest.

Potter ought to know if anyone does. The program he helped develop for the insurance companies that a “government takeover” of health care will be a milestone on the road to “socialized medicine” is working, judging from the Town Hall Meeting held in Pahrump yesterday.

Actually, those that oppose the single-payer solution seem to fail to realize that they will remain at the mercy of the for-profit insurance industry if reformation fails. The propaganda war against health care systematic reform is succeeding, for lots of reasons.

It appears that Congress is determined to allow the private insurance industry to continue. Understandable when one considers the amount of money contributes to those Senators and Congressmen/women. Members of Congress, seemingly most, are not interested in protecting Americans from the scourge of for-profit insurance company practices.

In today’s Las Vegas Sun, Lisa Mascaro reported that Senator Harry Reid held a private meeting of health care providers in Las Vegas last Tuesday. Reid is quoted as saying:

“We have a problem in America and it’s called the private insurance industry.”

Reid also spoke about the antitrust exemptions health insurance companies have enjoyed for decades as part of the problem with the industry.

Having been blogging about the private health insurance industry for weeks now I thought “La de da—no fooling.” [Read more →]

Insurance Exec Turned Whistleblower Wendell Potter Speaks Out Against Healthcare Industry.

Amy Goodman of Democracy Now interviewed Wendell Potter, former Vice President of Cigna. (Click the Democracy Now link to see the video) As the debate over healthcare reform intensifies on Capitol Hill, we spend the hour with a former top insurance executive who’s now exposing the industry’s dirty secrets. Wendell Potter once served as the head of corporate communications at CIGNA, one of the nation’s largest health insurance companies. We speak to Potter about his own transformation from industry mouthpiece to whistleblower, the healthcare industry’s extensive PR and lobbying machine, the campaign to discredit Michael Moore’s film Sicko, and the insurance industry’s most pressing task: the fight against a public option, let alone a single-payer system. [Read more →]

Submitted by Wendell Potter on July 1, 2009 – 8:29am. [PR Watch.Org]

I’m hoping President Obama realizes that some of the folks who’ve been currying favor with him are not, as they claim, bringing “solutions” to the health care reform table. Most Americans — especially those who voted for him — want nothing to do with the kind of “reforms” they are peddling.

If you watched the president’s televised Q&A on ABC last Wednesday night, you probably noticed that one of the people in the audience was Ron Williams, the chairman and CEO of Aetna, Inc., the nation’s third largest health insurer, and currently one of the most profitable. But there are a few things that you should know about Williams.

Back in the ’90s, Aetna set out on an acquisition binge in its quest to become the biggest health insurer in the country. It got there by the end of the decade after spending billion of dollars for several competitors. By 1999 it had 21 million health plan members, the most any insurer had ever had at the time.

But, as often happens after buying sprees, Aetna soon came down with a bad case of buyers’ remorse. As it turned out, some of the customers it had paid top price for were not as profitable as Wall Street analysts and the big institutional investors who owned most of Aetna’s stock expected. When they took a closer look at what Aetna had bought, investors started deserting the company in droves. As a result, the company found its stock price in a free fall.

As the Wall Street Journal reported on August 13, 2004, Aetna’s pretax profits as a percentage of revenues began falling dramatically after peaking at about 12 percent in 1998. By 2001 the company was a basket case as far as Wall Street was concerned. It had to do something, and fast.

Probably the most important thing it did to turn itself around was recruit Williams from rival WellPoint, the ambitious for-profit company that was gobbling up Blue Cross and Blue Shield plans from coast to coast.

As the Journal reported, Williams promptly ordered a $20 million revamp of Aetna’s data systems. Health care analyst Joshua Raskin told the Journal that the new system that emerged from that investment, which Aetna dubbed the Executive Management Information System (EMIS for short), was “the single largest driver of the Aetna turnaround.” Why? Because it helped Aetna “identify and dump unprofitable corporate accounts.” How did it do the dumping? By jacking up premiums to unaffordable levels.

By the time the dumping — or purging, as it is frequently called in the industry — was done, Aetna had shed eight million of its 21 million members. It shrank so much that by the time it emerged from the Ron Williams-led turnaround, it had fewer members than when the company started out on its multi-billion dollar buying binge.

While Aetna was shedding those eight million men, women and children, by the way, it also reportedly shed 15,000 of its employees. Wall Street likes it when insurers dump employees, too, because the workers who don’t get the ax have to assume the responsibilities of their laid-off colleagues. That theoretically boosts productivity, which Wall Street likes. And reducing the payroll leaves more money for profits.

The health insurance industry and its allies are working hard right now to convince you that the creation of a public insurance option would put a government bureaucrat between you and your doctor. As the 2004 Wall Street Journal article makes it clear, however, EMIS was at its heart a system that put corporate bureaucrats between people and their doctors. Here’s what it said:

Mr. Williams says EMIS helps him ferret out creeping costs so Aetna can react quickly. Sitting in his first-floor office in Hartford overlooking the Aetna parking lot, he taps on his keyboard to see whether some of the health insurer’s members are visiting emergency rooms too much for nonemergency reasons, such as for the flu or a sprained ankle.

Did that send a chill up your spine like it did mine? And know this, if Aetna’s CEO can keep an eye on your trips to the doctor, so can the CEOs of all the other big insurers.

The insurance industry claims that this time it really and truly supports legislation to reduce the number of people without insurance, that they’ve changed so much since 1994 — when they said the same thing but did everything they could behind the scenes to kill reform — that you can and should believe them now.

The next time you hear someone from the industry talking about how much they are committed to reform, remember that just a few years ago, the CEO of one of the biggest health insurers was the mastermind behind a business strategy that cost thousands of workers their jobs and millions of other people their insurance coverage. That’s the real “solution” the industry is bringing to the table — and the kind of reform Wall Street can really get behind.

Ron Williams has been richly rewarded by Aetna’s board of directors for leading the company back to a level of profitability suitable to Wall Street. They tapped him to succeed Jack Rowe as CEO when Rowe retired in 2006. And they rewarded him with compensation totaling nearly $65 million over the past two years.

(Rowe, by the way, was paid $22.2 million in 2005, his last full year as CEO. He played a big role in hawking the high-deductible plans that Aetna and the other big insurers are now trying to push us all into. He claimed that Americans enrolled in managed care plans have been too sheltered from the real costs of health care and that we need to have more “skin in the game,” by which he meant that we should have to pay a lot more out of our own pockets when we go to the doctor and pick up our prescriptions, even if we have health insurance. The median family income in the United States is just $50,000, which means that most of us already have a lot more skin in the game than Dr. Rowe and Ron Williams will ever need to.)

The insurance industry’s two biggest lobbying groups — America’s Health Insurance Plans (AHIP) and the Blue Cross and Blue Shield Association of America — warned members of Congress in a joint letter a few days ago that the creation of a public insurance option would unravel the country’s employer-based system.

As they say where I come from, that dog won’t hunt.

It is the insurance company executives — in their never-ending quest to meet Wall Street’s profit expectations — who are doing the unraveling by purging employers whose workers have the audacity to file claims when they get sick or injured.

A final point about Ron Williams: Not only are he and his fellow CEOs trying to kill the idea of a public health insurance option — a central part of candidate Obama’s health care proposal — but he is the leading advocate of an idea Obama rejected and which differentiated his proposal from Hillary Clinton’s — the imposition on all of us of an “individual mandate.” Many insurance executives were wary of such a mandate because they don’t like the government mandating anything, especially those pesky state mandates that force them to include certain benefits in the policies they sell. Advocates of an individual mandate eventually brought the skeptics, including many of AHIP’s board members, around to their way thinking by persuading them that insurers could make billions more in profits if every American had to buy an insurance policy from them. Now you know the real reason behind AHIP’s shift from neutrality on the issue to full-fledged support. It’s all about the money.

With almost 20 years inside the health insurance industry, Wendell Potter saw for-profit insurers hijack our health care system and put profits before patients. Now, he speaks with Bill Moyers about how those companies are standing in the way of health care reform.

Who is Wendell Potter, you ask? Glad you did.

Wendell Potter is former Vice President of corporate communications at CIGNA, one of the United States’ largest health insurance companies. In June 2009 he testified against the HMO industry in the US Senate as a whistleblower.

Potter began his journey towards resigning and becoming a whistleblower in July 2007, when he saw a touring free clinic run by Remote Area Medical in rural Virginia. “What he saw appalled him. Hundreds of desperate people, most without any medical insurance, descended on the clinic from out of the hills. People queued in long lines to have the most basic medical procedures carried out free of charge. Some had driven more than 200 miles from Georgia. Many were treated in the open air. Potter took pictures of patients lying on trolleys on rain-soaked pavements.”

Potter resigned in 2008 and became an active voice on health care reform in 2009 as it became clear to him that the insurance industry and its allies were having a distorting effect on the national debate. Now a fellow at the Center for Media and Democracy, he has appeared in high profile interviews with Bill Moyers and various others.

Go to the PBS site and watch the fascinating video of the interview by Bill Moyers of Wendell Potter or watch it below. Note: it is a 37 minute long video.

Following is a transcript of Moyer’s interview of Wendell Potter. We all owe a great debt of gratitude to Mr. Potter for speaking up. Potter is a former executive of Cigna. I have created links to additional information about people mentioned by Mr. Potter to assist you in keeping it all in perspective.

As I watched it I thought back to the individuals I saw yesterday protesting against healthcare reform. How uninformed they are and so willing protest against something they have little knowledge about and how they have been duped by the insurance industry and the Republican leadership in Congress. Potter explains it all.

I’m satisfied that those opposing protestors will never see the folly of their position. They choose, for a myriad of reasons, to close their eyes to reality. Those protestors probably never read a newspaper or a blog and choose close mindedness. Victims of conservative right wing propaganda. [Read more →]