Wendell Potter's News Articles

The global consulting firm McKinsey & Company set off a firestorm when it released a report last week suggesting that 30 percent of U.S. businesses will stop offering health care benefits to their employees after most of the provisions of the Affordable Care Act go into effect in 2014.

The White House was quick to challenge the validity of the report, noting that McKinsey has so far refused to provide any details of the methodology used to reach its conclusion. All McKinsey will say is that its report was based on a survey of 1,300 employers and "other proprietary research."

White House deputy chief of staff Nancy-Ann DeParle, who previously headed the president's office of health care reform, called it an "outlier" and cited other studies predicting that few if any employers would drop coverage because of the Affordable Health Care Act.

As the head of communications for two of the country's largest health insurers for almost 20 years, I recognize an orchestrated spin campaign when I see one. And boy, oh boy, did I see an award-winning one this week in San Francisco.

The supposedly nonprofit Blue Shield of California went to extraordinary lengths on Tuesday, June 7 to unveil its "bold move to address the health care affordability crisis" by pledging to limit its annual profit to no more than 2 percent of revenue. And not just going forward, mind you, but all the way back to 2010, when the nonprofit's profits were considerably more than 2 percent -- so much more that Blue Shield of California says it will refund $180 million to its policyholders.

The reaction of health insurers to the Obama administration's requirement that they start justifying rate increases of 10 percent or more was quick and predictable: "Not fair!"

The PR and lobbying group America's Health Insurance Plans (AHIP) absolved the industry of any responsibility for constantly rising premiums and pointed the finger of blame at just about everyone else. The real culprits, AHIP president Karen Ignagni insisted, are greedy doctors and hospitals, state legislators who make insurers provide coverage for an overly broad range of illnesses, and, of course, irresponsible American citizens, especially healthy young people who decide not to buy insurance.

You might not realize it, but this is National Small Business Week. I'm betting many small business owners aren't aware of it, either. Perhaps that's because most small business owners are far more likely to be worrying about whether they'll be able to offer health insurance to their employees for another year.

Or is this the year they join the ever-growing list of small businesses that have been "purged" by their insurance carrier?

For several years now, insurance companies have been "purging" small business accounts they no longer consider profitable enough or that their underwriters believe pose too much risk. I became familiar with"purging" (yes, that's the actual word insurance executives use internally) toward the end of my career as an industry PR man.