Drug manufacturers are not acting out of a charitable impulse. They are trying to forestall strong health reform legislation that would cost the industry more than it is promising. PhRMA took action in 2003 when adding a drug benefit to Medicare seemed inevitable and managed to keep a public health insurance plan—Medicare—from cutting drug costs. Now the threat of a new public health insurance option for people under 65 has spurred the powerful lobby into action once more, with promises of cooperation and voluntary discounts. Don’t be fooled! We can do better.

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“My name is Wendell Potter and 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.” With that powerful indictment, Mr. Potter began his Congressional testimony, shining a bright light on the abusive practices of this very secretive industry and calling for a strong public health insurance plan option to set a “benchmark in transparency and quality.”

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Health insurance companies routinely abuse the trust of patients and providers alike. State regulators have not been able to stop them. Insurers were not even intimidated when brought before Congress to answer for their abuses. The only thing that may scare health insurers straight is what they are fighting tooth and nail: giving people the choice of a public health insurance plan. Senators seem to be falling prey to the special interests of the health insurance industry. Don’t let them!

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After the insurance company practice of wrongly rescinding policies once a person becomes sick came to public notice, the state of California created new rules to prevent the practice from continuing. But can a state that was too afraid to try to collect a $1 million fine against an insurance company really curb health insurance industry abuse? Clearly not. That is why President Obama wrote a letter to Senator Edward M. Kennedy and Senator Max Baucus emphasizing the need for a public health insurance plan choice that will "make the health care market more competitive, and keep insurance companies honest."

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In the United States, the majority of people get their health insurance through their job or that of a family member’s. For many workers, that means staying in a job they don’t like just to keep the health benefits they and their families depend on. Ensuring they cannot be denied coverage if they leave their job is not enough to free them from this ‘job lock’ to become entrepreneurs or move on to more satisfying and lucrative work. They have to know they will be able to afford the coverage and that the coverage they get will cover the care they need. To accomplish that we need a public health insurance plan option.

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Medicaid is being used as an argument against the need to create a new, national public health insurance option. But Medicaid is not a good model for, nor an alternative to, the proposed new public health insurance plan. Medicaid varies too widely from state to state, its funding is unstable, its low provider payment rates lead to low provider participation, and its onerous application requirements keep many eligible people from enrolling. In addition, Medicaid has been largely handed over to private insurance companies, so it is no longer a truly public program.

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President Obama’s new Health and Human Services Secretary, Kathleen Sebelius, testified before Congress at a May 6, 2009 hearing on health reform held by the House Ways and Means Committee. Her testimony made clear that the Obama administration does not believe needed health reform can be achieved strictly through the private health insurance market and wants to give people the choice of a public health insurance plan. So don’t let Congress rip the heart out of President Obama’s health care plan. Support a public health insurance option.

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Supporters of the privatized Medicare Part D benefit and opponents of a public health insurance option being made available to everyone as part of national health care reform, have made much of reports that revised estimates of the Part D benefit's cost are lower than initial projections. This twisting of the facts ignores actual initial predictions and the Medicare private drug plans' performance compared with other government programs and other countries. A look at the evidence shows that the privatized structure of the Medicare drug benefit has led to higher costs for people with Medicare and taxpayers.

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With health reform looming, health insurance companies have mapped out various battle plans to protect their profits. And they have shown they are not above committing fraud to keep the money pouring in.

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It's amusing to hear insurance company supporters assert that private health plans will go out of business if they have to compete against a public health insurance plan option. They claim that the government will set the rules to favor the public health insurance plan, creating an unlevel playing field that will eventually eliminate private health plans. Is it a realistic fear? A look at real world experience with the Medicare program tells us that government has done just the opposite: it has favored the private plans that contract with Medicare.

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