Wendell Potter's News Articles

Health Insurers Leaning on State Insurance Commissioners to “Reform” Reform

The nation's biggest insurers -- not happy with provisions of the four-month-old health care reform law that would force many of them to spend more of the money they collect in premiums for their policyholders' medical care -- are pressuring regulators to disregard what members of Congress intended when they wrote the law, so that they can keep raking in huge profits for their Wall Street owners. If they are successful, many policyholders will soon be shelling out even more than they do today to enrich insurance company shareholders and CEOs. Billions of dollars are at stake, which is why the insurers and their symbiotic allies are pulling out all the stops to gut a key part of the law that would require them to spend at least 80 cents of every premium dollar they take in for medical care.

Obama’s Patients’ Bill of Rights: One Important Right is Missing, Thanks to Corporate Spin and Fear-Mongering

President Obama is calling a big part of the health care reform bill he signed into law last March a "Patients' Bill of Rights", suggesting that many of the consumer protections contained in the new law were the same ones the health insurance industry succeeded in killing time and again over many years through a fear-mongering campaign it secretly financed.

Obama is right -- but only to a point. An important right was missing from his list of consumer protections because, once again, insurers had made sure it would not be part of any bill that reached his desk.

The insurance industry defeated many attempts to pass a Patients' Bill of Rights in the 1990s and 2000s, despite considerable bipartisan support in both the House and Senate. It did this by funneling millions of dollars through a big PR firm it hired to set up a front group -- the Health Benefits Coalition -- whose sole purpose was to scare people away from the legislation. The industry also had one especially important ally: Obama's predecessor in the White House, George W. Bush. Bush threatened to veto any Patients' Bill of Rights that he (read: the insurance industry and its business allies) didn't like. Lawmakers were never able to agree on a single bill that Senators and House members could agree to (the House approved a weakened version of the bill Bush presumably would sign but the Senate refused to weaken its bill), so they eventually just gave up.

State Insurance Commissioners Take Baton from Congress

Now that Congress has taken final action on its health care reform legislation, the reform debate has now shifted to, of all places, Denver.

The legislation that is now the law of the land was just the first step. Despite its size -- more than 2,000 pages -- the bill in many cases only lays out Congressional intent. In that sense, it is a framework for reform. The law requires that numerous new regulations be written to govern the way health insurers do business, a responsibility that Congress passed on not only to the U.S. Department of Health and Human Services but also to one very influential non-governmental organization: the National Association of Insurance Commissioners (NAIC). The bill mentions the NAIC -- an acronym most Americans probably only see once a year when they renew their cars' license plates -- at least 10 times, and it gives the organization some very important assignments.

WellPoint's Heart-Stopping Rate Increase

A congressional hearing next week into the proposed 39 percent rate increase in California by health insurance giant WellPoint could breathe new life into health care reform efforts on Capitol Hill, especially if lawmakers broaden their investigation into the outrageous rate increases other insurers are also demanding from coast to coast.

WellPoint found itself in Congressional investigators' crosshairs after the California Department of Insurance challenged the company's planned increase in the rates it charges its customers who cannot get coverage through the workplace, but have to go it alone in what is called the individual market.

Breaking News: Insurance Industry Launders $10M to $20M in Attack Ads

This is a special alert about breaking news showing that health insurance companies secretly gave the Chamber of Commerce millions of dollars to run third-party attack ads at the same time they were telling Congress they continued to "strongly support reform." On the one hand, we're not surprised, but on the other hand, we're outraged by the lies and deception that have been documented.

The new story in the National Journal proves what I have been talking about, since I switched from being a spokesman for the health insurance industry to being a vocal critic of it. The industry is laundering millions of dollars through third parties to influence health care reform legislation and kill provisions that might hinder insurers' profits.

The revelations are so significant that Congress should launch an immediate investigation and hold public hearings before the House and Senate schedule final votes on health care reform. Please sign our petition demanding an investigation now.

The Insurance Industry's Lethal Bottom Line -- and a Solution From Sens. Franken and Rockefeller

  • Topics: Health
  • There was a time, in the early 1990s, when health insurance companies devoted more than 95 cents out of every premium dollar to paying doctors and hospitals for taking care of their members. No more.

    Since President Bill Clinton's health reform plan died 15 years ago, the health insurance industry has come to be dominated by a handful of insurance companies that answer to Wall Street investors, and they have changed that basic math. Today, insurers only pay about 81 cents of each premium dollar on actual medical care. The rest is consumed by rising profits, grotesque executive salaries, huge administrative expenses, the cost of weeding out people with pre-existing conditions and claims review designed to wear out patients with denials and disapprovals of the care they need the most.

    This equation is known as the medical loss ratio (MLR), an aptly named figure that is widely seen by investors as the most important gauge of an insurance company's current and future profitability. In a private health insurance industry that collected $817 billion this year, a 14 percentage point difference in the MLR represents $112 billion a year! Over 10 years, that would be more than enough to pay for health reform.

    Lessons from the Health Care Meltdown

  • Topics: Health
  • Here's an article I recently published in a special issue of The Regulator (the full issue focused on the health care debate is attached below):

    The current economic crisis teaches insurance regulators several key lessons to prevent a wholesale health care meltdown in America. Much like the financial sector, the health insurance sector has made short-term gains its priority rather than the health and well-being of its customers.

    As a result, private insurance fails to meet the needs of Americans and is increasingly unaffordable and unsustainable. Insurers have driven up premiums and out-of-pocket costs, putting consumers at financial risk if they need costly health care services or forcing them to go without needed care.

    For health care reform to work there must be the type of federal oversight and consumer protections required of the financial sector under the proposed Consumer Financial Protection Agency (CFPA). The creation of the Health Choices Administration (HCA), as outlined in proposed HR 3200 (a.k.a. America’s Affordable Health Choices Act of 2009), is critical.

    It's Plain in Maine

  • Topics: Health
  • (The following op-ed appeared in the Bangor Daily News, on Saturday, October 17, 2009.)

    When Big Insurance Rejoices, Something's Wrong

    If you had any doubt about who some Senators on the Senate Finance Committee really, truly care about, consider their recent votes. Just look at the votes against creating a public option to compete against private insurers. Then, consider the giddy response of the industry, according to an article in the trade press:

    "We are pleased by the rejection of both the Rockefeller and the Schumer amendments containing public plan options," says Tom Currey, president of the National Association of Insurance and Financial Advisors, Falls Church, Va.... America's Health Insurance Plans, Washington, is also welcoming committee rejection of the amendments. "The government-run plan is a roadblock to reform," AHIP spokesman Robert Zirkelbach says.... "[W]e are very pleased with this outcome," says Janet Trautwein, president of the National Association of Health Underwriters, Arlington, Va.

    Wendell Potter: Baucus' Health Care Bill Needs Urgent Care

    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.

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