Health Care For America Now

The HMO and insurance industries have spent a breathtaking $768,864,642 since 2007 on federal lobbying to influence public policy and elected officials, according to data collected by the Center for Responsive Politics and reviewed by Health Care for America Now. In 2010 they have not let up, despite passage of the new health reform law. They’re now trying to undermine the law with intense pressure on state officials to water down the federal provisions and interfere with their implementation.

As we all know, the insurance industry mounted a massive campaign to defeat health care reform and maintain their stranglehold on our health care. But after they lost, they turned their attention to undermining the new law so they can continue their obscene profiteering, their unconscionable denials of care and their shameless practice of giving CEOs jaw-dropping pay packages.

The top five companies reported a record $12.2 billion in net earnings last year. That’s huge. And the top executives at 10 for-profit companies have pocketed nearly $1 billion in compensation in the last 10 years. That’s staggeringly huge. As a group they received a 167 percent pay raise in 2009 while average American workers saw wages grow about 2 percent. That’s offensively indefensible.

Led by the Washington-based trade group America’s Health Insurance Plans, the $892 billion-a-year health insurance industry laundered $20 million through the U.S. Chamber of Commerce this year to blanket the airwaves with anti-reform TV ads. The Chamber has since announced a $75 million campaign against pro-reform members of Congress running for re-election in November. Insurance companies also are considering spending another $20 million to create their own front group to attack reform supporters and elect pro-industry lawmakers.

The insurance companies are now coordinating a lobbying assault on regulators. Activists are fighting back and we can all help.

This weekend, more than 1,000 insurance lobbyists and executives are expected to converge in Seattle to pressure the National Association of Insurance Commissioners (NAIC) to undercut important new rules intended to control costs and make health insurance more affordable for families and businesses. The new health reform law includes a provision (medical-loss ratio) that requires insurance companies to spend on patient care at least 80 percent of health plan premiums collected from individuals and small employers and 85 percent of premiums paid by large employers. The insurance companies are trying to protect their profits and divert premium dollars away from patient care by having non-medical costs, such as lobbying, profits, executive pay and administration, defined as “medical” under this new regulation.

The insurance lobbyists will be met by scores of activists, because the stakes in this fight are high. Simply put, the battle over the medical-loss ratio is the new health care reform fight, and if the health insurance companies win, we lose. If they win, they’ll be able to deny people needed care and call the administrative costs of that denial “medical care” under the new law.

In a powerful letter to the NAIC president in July, Senator Jay Rockefeller of West Virginia, chairman of the Senate Commerce Committee, urged the insurance commissioners not to succumb to the pressure applied by the industry.

“It is clear that health insurance companies are sparing no expense to weaken this new law and the protection it promises to America’s consumers,” Rockefeller said. “Health insurance companies and their allies have been furiously lobbying the NAIC to write the medical-loss ratio definitions in a way that will allow them to continue doing business as they did before the passage of health reform. The resources health insurance companies are throwing into their effort to weaken the medical-loss ratio appear almost limitless.”

Unlike federal lobbying disclosure rules, health insurance companies aren’t required to reveal what they are spending to influence state insurance commissioners, but the numbers are high. In New York alone, the health insurance industry has spent $10,602,387 on lobbying since 2007, according to an HCAN review of data maintained by the New York State Commission on Public Integrity. No figures are readily available on how much money health insurers spend on lobbying in 49 other state capitals.

This gap in reporting is troubling because this lobbying assault on the NAIC is new. This category of state officials—insurance commissioners—has never been subjected to a nationally coordinated pressure campaign to use their state authority to block implementation of consumer protections enacted by Congress. The NAIC is due to make its recommendations soon—perhaps even this weekend—to the U.S. Health and Human Services Department.

That’s why these massive lobbying expenditures must be disclosed. The public has a right to know how much the insurance companies are spending to protect their excessive profits and outrageous CEO pay by changing the intent of the medical-loss ratio established by Congress.

The health insurance industry wants to expand the definition of allowable medical expenses to include costs that are not directly related to the delivery of care and have not historically been classified as medical. Instead of reducing costs and improving the efficiency of their operations, they simply want to change how certain expenses are classified so they don’t really have to alter business practices. Already, WellPoint, the nation’s largest private health insurance company by enrollment and operator of Blue Cross plans in 14 states, has reclassified $500 million in administrative costs as medical expenses. The amount of money riding on the outcome of this battle is huge. If the new law had been on the books in 2009, the six largest for-profit health insurance companies would have been required to refund $1.9 billion for that year alone.

The medical-loss ratio standards in the Affordable Care Act are critical to curbing the worst of the health insurance industry’s consumer abuses, controlling rising premium costs, increasing the value of premiums paid by private and public customers, and reining in the profiteering of health insurance companies. If the lobbyists are thwarted and rules governing medical-loss ratios, rate review and other consumer protections are implemented as intended, the health reform law will hold accountable an industry that abuses millions of customers when they need health benefits the most.

We can all join the fight to hold the insurance industry accountable by demanding that they disclose how much they spend to lobby the NAIC and other state officials. Their unbridled efforts to protect the status quo must be stopped.

It’s inevitable that Sarah Palin will declare that the Missouri referendum “refudiated” the new health care law enacted by Congress. We will hear the same from Missouri Representative Roy Blunt, who sides with Wall Street and the insurance companies instead of his constituents and thinks that qualifies him for a promotion to the U.S. Senate. They are both wrong.

The Missouri vote was nothing more than a Republican straw poll. It lacks any legal force, and it certainly wasn’t about health care. If supporters of reform thought this referendum was about the new law, we would have run a campaign against it. But it wasn’t, so we didn’t.

This referendum was really about local Missouri politics in an election dominated by Republican primaries for state auditor, U.S. Senate, U.S. House of Representatives in the 7th and 8th districts, and many state legislative races. The truth is that this was a confusing, partisan ballot measure that included two unrelated questions—one that had nothing to do with the new law and the other that focused on only a single provision of it.

The Missouri referendum wasn’t a vote about ending unfair insurance company practices or making health care affordable. It wasn’t about stopping insurance companies from dumping you when you’re sick or ending the outrageous denial of coverage to children just because they have an illness requiring care. It wasn’t a vote on free preventive care for everyone or saving money for struggling seniors who rely on expensive prescription drugs. And it certainly wasn’t a vote on keeping millions of American families from being driven into bankruptcy by massive medical bills.

The Missouri referendum was a cynical partisan ploy to undermine the law before it even takes effect, just like the frivolous lawsuit filed by the state attorney general in Virginia. The Missouri vote was political theater for Republicans and an attempt to undermine a law that cuts health care costs for families and businesses and ends the worst of insurance company abuses.

People are just as tired of Republicans playing politics as they are of insurance companies denying care while making record profits.

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.

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There's a new fight around health insurance reform and if the insurance companies win, we lose. If the $892-billion health insurance industry wins this battle, they'll be able to deny people needed care and call the administrative costs of that denial "medical care" under the new health care law.

I'm talking about the fight over the so-called "medical-loss ratio." The insurance companies are pressuring state insurance regulators to undermine a key provision of the law to protect their excessive profits. They want to gut the federal requirement that insurers spend at least 80 percent of premiums on medical care in the individual and small-group markets and 85 percent in the large-group market, or rebate the difference to consumers. The industry is determined to undercut the new law and hold onto its ability to rip off families and employers. They want to continue their long-time practice of spending low percentages of premium revenue on actual medical care in certain states and for certain customers.

If the new law had been on the books in 2009, the six largest for-profit health insurance companies would have been required to refund $1.9 billion for that year alone, according to a Wall Street analyst. Despite the industry's whining, this rebate would have represented only a fraction of their massive profits. The top five for-profit health insurers alone recorded $12.2 billion in profits in 2009.

The definition of "medical care" is at the core of this fight. The law sets a minimum for how much of each premium dollar insurance companies must spend on actual health care. So they want to change the definition of "medical care" to include things that aren't medical care and that have never been considered as such. And the insurance companies are shameless in just how far they will go. They really are trying to have "underwriting," the process by which sick people are weeded out of eligibility for coverage, defined as a medical expense! Along with claims processing, call centers and other expenses that aren't about the actual delivery of care.

This is why we must implement and enforce the new law as it was intended - to hold the insurance industry accountable, stop the worst of their abuses and rein in skyrocketing costs.

Naturally, the insurance companies are doing everything they can to undercut the law by attempting to change the very definition of "medical care" so they can feed their insatiable greed. As Senator John D. Rockefeller IV of West Virginia said in a hard-hitting, fact-filled letter to the President of the National Association of Insurance Commissioners (NAIC), the insurance industry is "sparing no expense to weaken this new law and the protection it promises to America's consumers." The Senator described the insurance industry's effort to influence the NAIC, the organization charged with making detailed recommendations to the Department of Health and Human Services (HHS) on the definitions of medical-loss ratios and other key regulations.

Today HCAN released a comprehensive report on this issue with Senator Al Franken of Minnesota and Representative Bill Pascrell Jr. of New Jersey, along with members of the Main Street Alliance, a network of state-based small businesses. The report shines a light on the accounting tricks the insurance companies want to play to game the medical-loss ratio system, and it exposes their lobbying offensive to protect the status quo and undermine this part of the law before it even takes effect.

Thankfully, HHS Secretary Kathleen Sebelius and the Obama Administration are aggressively implementing the insurance accountability provisions in the new law.

It all comes down to this: Insurers want to use this regulatory fight to take back control of our health care, and we can't let them succeed. We think things like going to the doctor should be considered medical care, and marketing and denying care should not. We don't think that insurance companies should count the cost of stacking and counting their profits as part of your "medical care." That's why a seemingly arcane debate over the definition of the medical-loss ratio is so important.

We all need to fight back. You can go to the HCAN website and take action today.

John Boehner has a lot of bad ideas (like opposing health care, privatizing Social Security and supporting Palin for VP). But today's idea may top them all. His latest federal policy "proposal" is that there shouldn't be any. No rules. No nothing. Schools out!

The timing of his call for a moratorium on new federal regulations is impeccable.

He waited until the disaster in the Gulf of Mexico reached such catastrophic proportions that even people who hate regulations now crave them. He waited until the day after the Senate passed the hugely popular sweeping reform to regulate the fat cats on Wall Street. In fact, he even waited until regulations got popular with the public. He even waited until health care started becoming popular again - with a clear majority against repeal.

It may be that the Minority Leader is tired of being one-upped by Mitch McConnell and is jealous he doesn't have a filibuster of his own. The Republicans in the Senate have elevated saying "no" to an art form.

The Republicans in the Senate said no to unemployment benefits, no to aid to the states, no to creating jobs, no to standing up to Wall Street. They have been talking a lot recently about extending the Bush tax cuts for the rich - no matter how much that increases the deficit - but they won't extend unemployment benefits because that will increase the deficit.

Today Boehner said "having a moratorium is a good idea" because it will give the "private sector some breathing room." Sure. Just like unemployment gives people free time. And oil spills give enviros something to do.

Joking aside, a moratorium on regulations is not going to create jobs and jump-start the economy and that's what we need. A real recovery package will. All the Republicans want to do is return to the policies of George W. Bush and let the greedy corporations run the show.

Boehner's big idea today is so silly it's almost comical. So let's chuckle for a moment and stay focused on November.

To hear Sarah Palin and other members of the extreme right tell it, the Socialist Party is a huge political institution on the rise and a necessary stepping-stone for getting into liberal electoral politics, along with being born in Hawaii and other places outside the United States. They practically claim that everyone in the Obama Administration is a socialist. This rap is classic - another one of their big lies and scare tactics. And apparently they don't like people who have traveled abroad either.

Now they're going after Donald Berwick, the Harvard Medical School professor who President Obama appointed to run the Center for Medicare and Medicaid Service (CMS). Sure, Berwick may have traveled to London once (or even twice), but for eight years we had a President who had barely set foot outside of the U.S. before he was elected and then he dragged us into two endless wars that continue to suck the life out of our economy and exponentially increase our deficit.

Which leads me to Dr. Berwick. He's eminently qualified. Everyone who's not trying to score partisan, political points says so. Mark McClellan, who had the job under the last President Bush, said:

"What happens at CMS in the next few years will determine whether the new legislation actually improves quality and lowers costs. Don [Berwick] has a unique background in both improving care on the ground and thinking about how our nation's health care policies need to be reformed to help make that happen."

But none of this matters to the Republican leadership in Congress. Berwick's merits are irrelevant to them. They just blather on and on without regard for the truth. And the truth is that we need this recess appointment because we need to fill this position and move this health reform implementation along.

Consider a few facts:

• CMS has been with out a permanent head since 2006.
• George W. Bush made 171 recess appointments.
• President Obama has now made a total of 18 recess appointments.
• There are currently 180 nominees still pending before the Senate.

One might assume that Senate Republican Leaders might care about these issues. But they don't. They no longer seem to care about anything but crass partisan politics. And they're happy to hold up the process no matter what the consequences. They don't care if people lose their health care benefits. Or if their unemployment benefits run out. Or if state governments have to cut services and lay people off. People don't matter to them. And neither does the truth.

Which is why Sarah Palin really is a whack job. Her "tweet" this Tuesday on the topic says it all:

@sarahpalinusa: Press Corps-pls do your job as Obama sneaks in Berwick appt;pls cover his mission:socialized healthcare&rationing based on"quality of life.

And the Republican leaders in the Senate are no longer holding themselves to a higher standard than people like Palin who are free to "go rogue". They feel no obligation to govern and use the Senate for good of the American people. They have become nothing but populist demagogues, political parasites of the worst kind (though I don't mean to leave out Representatives Boehner or Canter, but fortunately their grotesque political games can't hijack the entire Congressional agenda the way their Senate counterparts can).

So kudos to the White House for doing the right thing and addressing the needs of our country, our economy and the more than 100 million Americans who depend on the life-saving and life-enhancing care provided by Medicaid and Medicare.

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.

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William H.T. Bush – a WellPoint board member and President George H.W. Bush's younger brother — collapsed at the annual shareholder meeting the other day, just as the health insurer's CEO, Angela Braly, was trying to explain to angry shareholders why profits are up but the company's reputation is in the tank. Thankfully, Bush improved enough to go home from the hospital, but the meeting never recovered. Braly refused to continue after paramedics wheeled Bush out, so she got away without answering any of the tough questions about her company.

Shareholders never got to ask why WellPoint and its Blue Cross plans in 14 states look like a train wreck to 34 million uneasy customers. Before Bush collapsed, the AFL-CIO, Connecticut's public employee retirement system and other shareholders criticized WellPoint for abusing consumers, funding a duplicitous campaign to block health reform, and misusing premium money to give indefensible compensation packages to top executives. In 2009, Braly's pay jumped 51 percent to $13.1 million. Many of us didn't get a raise at all last year. Ten percent didn't even have jobs.

Shareholders at the meeting didn't get answers to some other big questions on the minds of investors. Why did legendary stock picker Warren Buffett, the world's third richest man, dump 1.3 million shares (worth about $70 million at today's price) of WellPoint stock during the first quarter. Buffett knows a little bit about money. What's the deal? And what's up with the company's outrageous submission of inaccurate data to get California regulators to permit premium increases as large as 39 percent for individuals this year? And why is the company driven to pursue sleazy policies, like targeting patients with breast cancer for fraud investigations, and then calling President Obama a liar for saying the practice should stop? Is that really in the interest of the owners of $23 billion worth of WellPoint stock? Most investors want WellPoint to make money, not enemies.

Maybe Braly wasn't worried about how things would look because her P.R. team decided shortly before the shareholders meeting to drop plans to webcast the event. Only reporters who attended in person could observe. Just like the health insurer Cigna did at its annual shareholder meeting last month, WellPoint shut out the media to minimize the impact of embarrassing questions.

Greed has made WellPoint completely lose touch with the founding mission of the nonprofit Blue Cross companies it acquired over the last 15 years (in California, Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, New Hampshire, New York, Nevada, Ohio, Virginia and Wisconsin). The Blue Cross plans, once seen as a refuge for each state's sickest residents, have been transformed by Braly and her ilk into cash machines to satisfy the unbridled greed of Wall Street and corporate executives.

Rather than accept responsibility for the insurance industry's unwillingness to slow the growth of health costs through tougher negotiations with doctors, hospitals and drug makers, Braly and her industry peers prefer to just keep raising prices, cutting benefits, denying care and boosting their profits and compensation. They serve the needs of the high rollers on Wall Street instead of millions of Americans.

The good news is that more shareholders are refusing to accept WellPoint's unconscionable behavior and are taking action. The evidence of that came at the meeting when shareholders adopted a resolution to limit excessive CEO compensation by giving themselves an advisory vote on executive pay during the company's annual meetings. Among the shareholders who demanded more "say on pay" was Connecticut State Treasurer Denise L. Nappier, who controls investments for the $23 billion pension plan for state employees. Similar proposals were defeated by WellPoint shareholders in 2008 and 2009, but the tide has turned.

The grotesque compensation paid to insurance CEOs costs more than the face value of their pay packages. It also exerts unhealthy influences on CEOs' decisions about company finances and health care policy even when customers' lives are at stake. That's why shining a light on companies like WellPoint is so important.

Even by the standards of people who believe that it's okay to do just about anything to make money, WellPoint consistently goes too far. Their turbo-charged greed is out of control, and their lack of any moral compass is shocking.

Tomorrow, May 6, 2010, HCAN Partners - AFL-CIO, SEIU and United Steelworkers are rallying on Capitol Hill to thank Members of Congress for supporting health care reform. Congress took on the Insurance Companies.  They took on the Chamber of Commerce.  They took on the K Street Lobbyists and stood up for America's working families.

Rally Information (see flier below):

Date: Thursday, March 6th
Time: 12:00 pm – 1:00 pm
Location: Longworth Fountain Plaza on Capital Hill, Washington, DC