Health Care For America Now

At hearing this afternoon on "Consumer Choices and Transparency in the Health Insurance Industry," the Senate Committee on Commerce heard powerful testimony from three experts on the health insurance industry: Wendell Potter, a former executive at Cigna; Nancy Metcalf of Consumer Reports; and Dr. Karen Pollitz of Georgetown University's Health Policy Center. Here I want to focus on Mr. Potter's testimony.

As a former industry insider, Potter spoke with tremendous knowledge and delivered a forceful indictment of insurers' practices:

For 20 years, I worked as a senior executive at health insurance companies, and I saw how they confuse their customers and dump the sick – all so they can satisfy their Wall Street investors.

I know from personal experience that members of Congress and the public have good reason to question the honesty and trustworthiness of the insurance industry. Insurers make promises they have no intention of keeping, they flout regulations designed to protect consumers, and they make it nearly impossible to understand—or even to obtain—information we need.

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To help meet Wall Street’s relentless profit expectations, insurers routinely dump policyholders who are less profitable or who get sick. Insurers have several ways to cull the sick from their rolls. One is policy rescission. They look carefully to see if a sick policyholder may have omitted a minor illness or a pre-existing condition when applying for coverage, and then they use that as justification to cancel the policy retroactively, even if the enrollee has never missed a premium payment. Asked directly about this practice just last week in the House Energy and Commerce Committee, executives of three of the nation’s largest health insurers refused to end the practice of cancelling policies for sick enrollees. Why? Because dumping a small number of enrollees can have a big effect on the bottom line. Ten percent of the population accounts for two-thirds of all health care spending. The House Energy and Commerce Committee’s investigation into three insurers found that they canceled the coverage of roughly 20,000 people in a five-year period, allowing the companies to avoid paying $300 million in claims.

As lawmakers tackle the challenge of reforming our broken health care system, Potter urged Congress not to be swayed by "charm offensives" from the industry:

When I left my job as head of corporate communications for one of the country’s largest insurers, I did not intend to go public as a former insider. However, it recently became abundantly clear to me that the industry’s charm offensive—which is the most visible part of duplicitous and well-financed PR and lobbying campaigns—may well shape reform in a way that benefits Wall Street far more than average Americans.

A few months after I joined the health insurer CIGNA Corp. in 1993, just as the last national health care reform debate was underway, the president of CIGNA’s health care division was one of three industry executives who came here to assure members of Congress that they would help lawmakers pass meaningful reform. While they expressed concerns about some of President Clinton’s proposals, they said they enthusiastically supported several specific goals.
Those goals included covering all Americans; eliminating underwriting practices like pre-existing condition exclusions and cherry-picking; the use of community rating; and the creation of a standard benefit plan. Had the industry followed through on its commitment to those goals, I wouldn’t be here today.

Today we are hearing industry executives saying the same things and making the same assurances. This time, though, the industry is bigger, richer and stronger, and it has a much tighter grip on our health care system than ever before. In the 15 years since insurance companies killed the Clinton plan, the industry has consolidated to the point that it is now dominated by a cartel of large for-profit insurers.

I encourage you to read all of Potter's testimony, available at the link above. Also worth reading is some of the press coverage around his testimony. As senators like Jay Rockefeller and news outlets like ABC recognize, Potter's words carry weight, letting the government and the American people know just how high the stakes are in the health care debate, and just how badly our current system is failing millions of our sickest and most vulnerable citizens.