Author: Jason Rosenbaum

When we at The Seminal and Brave New Films decided to solicit applications to replace the wonderful Derrick Crowe and find a new Afghanistan Blogging, we had no idea if we’d even get any applications. We were very, very wrong.

Over 40 immensely qualified people applied. Men and women, Americans and Afghans, bloggers and journalists. We had people apply who are diarists here at The Seminal, people who write for nationally-known offline publications, people who appear on TV regularly, people who’ve spent years in Afghanistan – the works. It was a tough process to narrow down the applicants, but in the end we’ve come up with someone who can help move the debate about the war in Afghanistan into the national and political consciousness.

Josh Mull, who is starting today as our newest Afghanistan Blogging Fellow, has deep experience blogging, reporting, and making political change. He’s been deeply involved in the Alive in Baghdad and Alive in Afghanistan projects, which have coordinated amazing on the ground reporting from citizen journalists up to and during the elections in Iraq and Afghanistan. He’s covered domestic politics for TheUptake.org, and he currently reports at Small World News.

This experience lends itself directly to the cause of opposing escalation in Afghanistan and bringing this overly costly war to a close.

From Josh’s application:

All of my reporting experience, from live monitoring of police brutality at the Republican National Convention to editing eyewitness reports from government crackdowns in Iran and Honduras, has provided me ample evidence that violence and warfare are completely unworkable solutions to our problems, and the NATO occupation of Afghanistan is no exception. Regardless of the political and national security justifications provided by the Obama administration, or its predecessor, American military force in Afghanistan will not succeed at even the modest stated goals (security, governance, human services) much less the more lofty objectives of creating a stable, democratic international partner for the United States.

That does not mean the US is without options in Afghanistan.

Through election monitoring with Alive in Afghanistan and our partner Pajhwok Afghan News, I have seen the power of media at providing transparency and accountability to both Afghan and US affairs, be it publishing evidence of fraudulent campaigning by Afghan politicians or eyewitness reports of civilian casualties caused by reckless ISAF operations. I have also seen how the American and western community can be engaged in foreign policy, through our interactive reporting with Alive in Gaza, which allowed people from the around the world to submit questions directly to Palestinians living in Gaza. This personal connection to the subject of US policy provided a moral and human lens through which the Internet audience could better understand the conflict.

Additionally, Small World News is currently working with IREX and the Enough Project on new projects in Ethiopia and Sudan respectively, giving me first-hand experience with state funded initiatives on human rights, development, and governance which could very easily be applied to the situation in Afghanistan. While these non-violent options aren’t revolutionary in and of themselves, I find that they are almost entirely absent from the American debate on Afghanistan policy. The case against US aggression in Afghanistan is extremely important, but I also believe that citizens should be informed of the alternatives to military power, to show that an anti-war stance does not imply naked rejectionism, but that concerns over security, human rights, and international affairs can still be addressed through reasonable, already-available solutions. Put bluntly, opposition to US involvement in Afghanistan comes from an abundance of compassion, not a lack of it, and Americans should be made aware of the other options available to them.

I’m looking forward to working with Josh to put those other options on the table and make politicians understand what the American people already know – more war in Afghanistan isn’t in our interest, nor is it in Afghanistan’s interest.

We’re proud to have Josh on board as our blogging fellow, and his first piece will be published here (and on Rethink Afghanistan) shortly. Stay tuned, and give him a warm welcome!

Tags: Brave New World

 

The insurance companies have been taking an incredible amount of heat lately for their stunning rate increases. Anthem kicked things off with their 39% increases in California, but these were not isolated hikes. WellPoint, Anthem’s parent company, is increasing rates by double digits in at least 11 states. And other big insurance companies are hiking rates in at least half a dozen more states.

Insurance company CEOs have been called to testify before Congress, with more hearings to come. This has put the industry on the defensive and they’ve taken to the media to deflect criticism and explain their rate hikes. Their spin centers on one talking point, elucidated by Angela Braly, CEO of WellPoint, in today’s Wall Street Journal:

WellPoint Inc. Chief Executive Angela Braly is facing her biggest test yet as the nation’s largest health insurer comes under fire for its plans to raise rates as much as 39% in California.

So far, Ms. Braly has chosen to fight back. Instead of issuing a Toyota-style apology, she is turning her critics’ argument around, citing rising health-care costs driven by doctors and hospitals, which she says aren’t addressed by current health-overhaul bills.

The strategy, on display last week during a contentious House hearing focused on the rate increase, could get another airing Wednesday, when Ms. Braly and other top health-insurance executives are expected to appear before the Obama administration’s top health official to discuss health-care premiums.

The idea that insurance rate hikes are driven by increases in the underlying cost of medical care has also been pushed by AHIP, the insurance industry’s top lobbying front group.

Given the health insurance industry’s duplicity on everything having to do with the health care system and their role in it, it shouldn’t surprise anyone to find out that this talking point is a straight up lie.

A new report from Health Care for America Now sets the facts straight [pdf]. As Richard Kirsch, National Campaign Director, explained to reporters on a call today:

From 2000 to 2008, insurance premiums went up 97% for families and 90% for individuals. In the same time period, payments to providers like hospitals and doctors only went up 72%. Even worse, underlying medical inflation, calculated from the Consumer Price Index, went up only 39%.

In short, over the last eight years premiums almost doubled, but medical inflation went up only 40%. Premiums rose two times faster, and over three times faster than wages, which only rose 29% in the same time period.

The graph below shows the percentage increases in various health and economic indicators, including health insurance rates for families and individuals, the amount the insurance companies spend on care, doctors, and hospitals, and underlying medical inflation. As you can clearly see, the rate at which insurance companies increased their prices outstrips the amount they pay in benefits:

So while it’s true the cost of medical care is rising faster than inflation, and it’s also true doctors and hospitals are making more profit than they used to (the difference between medical inflation and what insurance companies pay to doctors), insurance companies are raising their rates much faster than even that – over 20% faster than the amount they are paying doctors and two times the amount the underlying cost of care is rising.

To put it another way, insurance companies are making more profit than ever (and they are making record profits) because they are raising their prices faster than their costs.

Which means they have more money to spend on perks. For example, Anthem spent $27 million on 103 executive retreats to places like Hawaii in 2007 and 2008 alone. In fact according to the report, from 2000 to 2008 insurance companies spent $716.4 billion of premium dollars on administrative costs, CEO salaries, and investor profit, almost enough to pay for the entire health reform bill.

Why are insurance companies raising their prices so much faster than the underlying cost of care? As Wendell Potter explained today on the call, it’s to please Wall Street:

Insurance companies are accountable first and foremost to their shareholders and they will do whatever they can to meet their expectations and the expectations of a few powerful financial analysts.

Angela Braley [WellPoint’s CEO] is not alone in making promises to Wall Street [when she told investors WellPoint wouldn’t “sacrifice profitability for membership]. On their conference calls with investors, all the executives of other companies make the same promise – profitable growth. That’s what investors want to hear.

The bottom line is that these companies are constantly raising their rates and dropping the customers they don’t want in a process called “purging.” The consequence is small businesses can’t afford to pay exhorbitant rates and group coverage is dropped. When people are purged, they then have to seek insurance on the individual market. Many of these people have medical conditions so they can’t get coverage at any price because insurance companies won’t sell it to them. Those that can buy find insurance discover it’s more expensive on the individual market and they get hit with shocking rate increases every year.

These rate increases are all part of the insurance industry’s plan to squeeze more profit out of your premium dollars.

Rates go up for small business. (Blue Shield, for example, is raising its rates by over 75% in some cases.) Small business drops coverage. And then people have to seek insurance on the individual market where insurance make more profit because they can deny coverage or raise their rates with impunity because individuals have a harder time fighting back.

This is why it’s so important to get health reform done and get it done right.

The individual market needs standards and regulations and small business needs protection, that’s what the Exchange is for.

It would set minimum benefit standards so insurance companies can’t sell junk insurance. It would have to approve rate increases, especially if President Obama’s proposal for a rate overseer is included. And, with the inclusion of a public option, it would set up a system where insurers would have to compete for customers in a real way, instead of competing to steal each other’s healthy and profitable customers as they do now, like “thugs and thieves” as Wendell Potter put it. And the government would be able to step in a provide subsidies so everyone could afford insurance.

The underlying cost of medical care is not driving insurance rate hikes. Greed is the singular driving factor at work. And our health care system must be reformed to fix this glaring, deadly problem.

UPDATE

The insurance companies have fired back, taking issue with the data used to determine the rate at which health insurance rates have climbed. To determine these rate increases, the report used data from the Kaiser Family Foundation, the gold standard for this type of informationgoing back many years. It goes without saying that we stand by the data and the report’s conclusion.

(also posted at the NOW! blog)

I’m proud to work for Health Care for America Now

Tags: AHIP, Health care, health care reform, insurance companies, medical costs, report

 

[Ed. Note: If you missed it, be sure to check out Jason’s morning wrap up.]

The White House Health Care Summit has concluded. Unsurprisingly, Republicans continued to hit on tort reform as the way to lower our health care costs all afternoon. And they continued to be wrong. But a few more themes came up that are worth debunking.

First, Republicans kept insisting that if only average Americans had more “skin in the game” when it came to health care costs, those costs would go down. In particular, they tout health savings accounts as a solution.

In reality, health savings accounts are junk insurance, nothing but insurance company sponsored scams, good for the rich, like the Republican Members of Congress at the summit, but not for the rest of us:

Health savings accounts by definition favor the wealthy and/or the healthy. For those that never go to the doctor, or who can afford the high out-of-pocket costs incurred when using health savings accounts (you need to pay $1,050 as an individual or $2,100 for a family before your insurance will cover the rest), health savings accounts are great. Wealthy and/or healthy individuals can put a bit of money away, tax free, into their health savings account and then draw from it to pay their astronomical out-of-pocket costs when they decide to go see a doctor. If you’re healthy, the doctor’s visit doesn’t happen very often. If you’re wealthy, who cares if it happens very often, you can afford it.

For the rest of us, however, health savings accounts don’t work. If we get sick and see the doctor often, we have to pay those huge costs often; that means we have to save a lot of money in that health savings account. For those on fixed incomes, or even those just barely scraping by (and that’s a lot of us in today’s economic climate), putting away even $4,000 in a health savings account is out of the question. Health savings accounts don’t work for the same reason tax credits don’t work: Those who don’t have a lot of cash to save are forced to put away money they don’t have a bit at a time to pay for their care. With tax credits, they get repaid at the end of the year. With health savings accounts, they don’t pay taxes on that money. But either way, they need to save over the course of a year to get that payoff. For a lot of folks, this just isn’t a realistic option – there’s simply nothing to spare.

As the President pointed out, Republicans might feel differently about health savings accounts if they made $40,000 per year instead of the hundreds of thousands they make as Members of Congress.

Another perpetual Republican talking point was the wonders that would occur if only we could buy insurance across state lines.

In the Republican fantasy land, consumers would be able to buy cheaper or better insurance from another state. Here’s what reality would look like:

Insurance is currently regulated by states. California, for instance, says all insurers have to cover treatments for lead poisoning, while other states let insurers decide whether to cover lead poisoning, and leaves lead poisoning coverage — or its absence — as a surprise for customers who find that they have lead poisoning. Here’s a list (pdf) of which states mandate which treatments.

The result of this is that an Alabama plan can’t be sold in, say, Oregon, because the Alabama plan doesn’t conform to Oregon’s regulations. A lot of liberals want that to change: It makes more sense, they say, for insurance to be regulated by the federal government. That way the product is standard across all the states.

Conservatives want the opposite: They want insurers to be able to cluster in one state, follow that state’s regulations and sell the product to everyone in the country. In practice, that means we will have a single national insurance standard. But that standard will be decided by South Dakota. Or, if South Dakota doesn’t give the insurers the freedom they want, it’ll be decided by Wyoming. Or whoever.

This is exactly what happened in the credit card industry, which is regulated in accordance with conservative wishes. In 1980, Bill Janklow, the governor of South Dakota, made a deal with Citibank: If Citibank would move its credit card business to South Dakota, the governor would literally let Citibank write South Dakota’s credit card regulations. You can read Janklow’s recollections of the pact here.

Citibank wrote an absurdly pro-credit card law, the legislature passed it, and soon all the credit card companies were heading to South Dakota. And that’s exactly what would happen with health-care insurance. The industry would put its money into buying the legislature of a small, conservative, economically depressed state. The deal would be simple: Let us write the regulations and we’ll bring thousands of jobs and lots of tax dollars to you. Someone will take it. The result will be an uncommonly tiny legislature in an uncommonly small state that answers to an uncommonly conservative electorate that will decide what insurance will look like for the rest of the nation.

It’s a race to the bottom, selling our health to the lowest insurance company bidder. It’s not a solution that makes us more healthy or lowers our cost – CBO said selling insurance across state lines wouldn’t expand coverage at all and would only save $12 billion over 10 years, a fraction of what real health care reform would save.

Finally, Republicans continually made the point that the American public doesn’t want health reform. As Nancy Pelosi said, there have been so many lies about the health care bills, it’s a wonder anyone likes them. And it’s important to stand up for popular things – like a public option – to make it better. But that doesn’t mean the American people don’t want reform.

By huge majorities, they want the major parts of health reform, and they want Congress to plow ahead and pass a good bill:

The latest Kaiser Health Tracking Poll is only the latest in a series showing the elements of health reform are popular:

Other parts of reform are really popular too, like the public option.

And majorities want comprehensive health reform passed:

And even more will be disappointed or angry if reform doesn’t pass:

The Republicans didn’t bring a plan to the summit today. Instead, they brought stale, easily-debunked talking points. They tried to prove that giving good health care to Americans was a bad idea, but they failed. And in the end, they resorted to the same slogans they’ve been repeating for a year now – start over, blank slate, incremental reform.

We’ve heard from the other side and found they have no plan to solve the greatest problem facing the nation. Now it’s time to finish the job and finish it right.

(also posted at the NOW! blog)

I’m proud to work for Health Care for America Now

 

Over the past few weeks, House and Senate Democratic leaders have been working to craft a compromise between their two health care bills that were passed over the last few months. Today, President Obama has released what Dan Pfeiffer, Communications Director at the White House, is calling the administration’s “best shot” at bridging the differences between the House and Senate.

The proposal comes in advance of the planned health care summit on February 25th where Republicans and Democrats will meet and talk about the health care proposals on the table. The White House thought it would be most productive to “come to the table with one proposal,” as Pfeiffer put it.

Over the last few months, we’ve been fighting to finish health reform right under the rubric of two main goals. By making health care affordable we mean making sure insurance is affordable for individuals, making sure insurance is affordable at work, and making sure middle-class health plans aren’t taxed. By holding insurance companies accountable we mean giving regulators a national exchange so insurance plans in the exchange are subject to the same stringent rules and creating a public health insurance option to hold private insurance companies accountable.

So, what does the President’s plan do?

(Note: The plan starts from the Senate bill as a foundation so any changes listed in the overview of the President’s plan [pdf] are changes to the Senate bill.)

Affordability for individuals

The President’s plan merges the tax credit schedules of the House and Senate bills for the subsidies an individual or small business would get if they buy health care on the exchange.

As noted previously, the House bill provided much more generous tax credits to lower income people so they could truly afford health care while the Senate bill was more generous for the middle class. The President’s bill has merged these two in a way that makes health care more affordable to both low and middle income people.

Here’s what the subsidies look like in the President’s bill compared to the House and Senate bills:

Affordability at work

The House bill included a crucial “pay or play” provision that would have required employers to provide good health care at affordable prices to their employees and help small business afford it. If a business didn’t provide health care, it would have had to pay a fee to the government to offset the cost to government of providing health care for uncovered workers.

The Senate, by contrast, does not require all businesses to contribute their fair share. Instead, they’d only pay $750 per worker per year if they left them uncovered and the worker qualified for a subsidy in the exchange.

The President’s plan, though not a full “pay or play” system, moves towards reconciling the House and Senate bills. If a business does not offer coverage, it must pay $2,000 per worker to help cover the cost of insuring its employees. The White House estimates that this amount is one-third less than the average amount businesses would pay under the House proposal.

Taxing middle class plans

The excise tax in the Senate bill would tax many middle class health care plans, making coverage worse and more expensive. The House finances their health care bill by taxing those that can most afford it – households making more than $1 million per year.

The President’s plan does not do away with the excise tax entirely, but it makes some significant changes. The threshold at which the tax kicks in was moved from $23,000 as the cost of a health care plan in the Senate bill to $27,500 for families and from $8,500 to $10,200 for individuals, and the tax would not kick in until 2018.

In addition, dental and vision benefits won’t be part of the cost calculation, in effect raising the threshold higher.

The thresholds will be pegged to inflation plus 1% and will automatically go upwards if “health costs rise unexpectedly quickly between now and 2018″ when the tax is set to phase in.

Finally, there will be adjustments in the threshold for businesses that have higher costs due to the gender or age makeup of their employees.

Health Insurance Exchange Design

The President’s plan maintains the state-based exchange design in the Senate bill instead of a more robust, national one. The President proposes giving HHS and state regulators the authority and funding to question and block rate increases like we’ve seen recently from Anthem/WellPoint in California.

Igor Volsky at Think Progress has a rundown of what the new policy would do:

The final Senate health care bill already bars insurers with excessive rate hikes from participating in the insurance exchanges but this new provision would go a step further, federalizing the states’ traditional and somewhat uneven role in monitoring insurance rate increases. At least 25 states have some “form of a prior approve process for premium increases,” but state governments often lack the resources or political will to keep insurers in check. Obama’s provision is both politically and substantively significant. It protects consumers from unreasonable rate increases but also prohibits insurers from dramatically increasing rates during the elections of 2010 and 2012 or the period between the passage of comprehensive reform and implementation.

Democrats were worried that insurers would exploit the interim period to boost profits ahead of the new insurance regulations. The federal government’s new rate review powers could blunt at least some of the anticipated increases. Here is how rate review would work:

– Insurance companies would have to justify unreasonable premium increases.

– The Secretary could deny or modify health insurance rate increases that are found to be unjustified.

– The Secretary would determine whether states have the capability to conduct rate reviews.

– Establishes a Health Insurance Rate Authority to advise the Secretary. It will have seven members, including consumer representatives, an insurance industry representative, a physician and other experts like health economists and actuaries

…

Since conservatives will surely claim that rate review is some kind of government take over of private industry or a burdensome new federal requirement for insurers, it’s important to note that states that have instituted rate review house profitable insurance companies and maintain competitive and vibrant markets. Families USA has more on that here.

Public Option

There is no public health insurance option in the President’s bill.

Other changes

In addition, the President’s plan would:

• fully close the donut hole for prescription drugs under Medicare by 2020
• put more money into community health centers
• some changes in the individual mandate, plus allowing people to opt out of purchasing insurance entirely if they’re below the tax filing threshold of $18,700 per year for families
• gets rid of “pay for delay” which allows branded pharmaceutical companies to keep generics off the market by paying the generic maker to stay out
• $10 billion in more tax on big PhRMA
• fully funds the Medicaid expansion for states until 2017, funds it at 95% until 2019, and funds it at 90% going forward after that
• gets rid of the special deals like Senator Nelson’s cornhusker kickback
• is fully paid for and reduces the deficit over 10 and 20 year periods

The Wonk Room has more.

————————–

Perhaps more significant than the proposal this morning was Pfeiffer’s comments on the strategy for passing the President’s plan:

The President expects and believes the American people deserve an up or down vote on health reform. The proposal was designed to ensure we can get that if the opposition decides they will filibuster health reform.

Heading into the summit on the 25th, the President has a plan on the table that the administration believes represents a compromise between Democrats in the House and the Senate with no large token policy given to Republicans before they arrive at the negotiating table that wasn’t already in one of the two bills. And the plan was designed to pass via reconciliation.

Most Republicans have yet to formally RSVP to the summit or post their unified plan online as the White House has done. It’s still an open question whether Republicans can coalesce around one plan, as opposed to the multiple, non-serious proposals they’ve released so far. And the President has told them that he hopes they come to the summit in “good faith.” The rest of America? We know we need health reform finished, we know we need it finished right, and we know that it will take the Democrats in Congress to get it done.

And we’re making our voices heard. On Wednesday, the day before the summit, we’re mobilizing with MoveOn.org and dozens of other partners to let Congress hear from us one million times. This barrage of action will come as Melanie’s March – a group of health insurance company survivors walking 135 miles from Philadelphia to DC in honor of Melanie Shouse, a health care activists who died because she didn’t have affordable health care – concludes with a rally in DC.

Click here to join us! Because if you’re going to speak up, you should do it now.

(also posted at the NOW! blog)

I’m proud to work for Health Care for America Now

 

Today, Secretary Sebelius and the Department of Health and Human Services released a report on health insurance company rate increases in the wake of the outrage over Anthem Blue Cross’s 39% increases in California. The report makes clear what those of us who’ve been following the health care debate have known for years: California’s rate increases aren’t unique.

The HHS report highlights similar rate increases in other states:

Anthem Blue Cross isn’t alone in insisting on premium hikes. Anthem of Connecticut requested an increase of 24 percent last year, which was rejected by the state.³ Anthem in Maine had an 18.5-percent premium increase rejected by the state last year as being “excessive and unfairly discriminatory”⁴ – but is now requesting a 23-percent increase this year.⁵

In 2009, Blue Cross/Blue Shield of Michigan requested approval for premium increases of 56 percent for plans sold on the individual market.⁶ Regency Blue Cross Blue Shield of Oregon requested a 20-percent premium increase.⁷ UnitedHealth, Tufts, and Blue Cross requested 13- to 16-percent rate increases in Rhode Island.⁸ And rates for some individual health plans in Washington increased by up to 40 percent until Washington State imposed stiffer premium regulations.⁹

Leading experts have predicted that, without reform, these increases will continue, and the federal government and most states don’t have the legal authority to block or reduce health insurance rate increases.¹⁰

Of course, this comes at the same time that the parent companies of these insurers are making record profits.

The insurance companies, of course, will claim that these rate increases are justified by rising costs. They’re dead wrong. More from the report:

WellPoint and others claim that the premium increases are necessary given the rise in health care costs. While rising health care costs is a known problem with our broken health care system, some of the premium increases requested by insurance companies are 5 to 10 times larger than the growth rate in national health expenditures.¹¹ All the while, insurance companies and their CEOs continue to thrive.

Recent economic data show that profits for the ten largest insurance companies increased 250 percent between 2000 and 2009, ten times faster than inflation.¹²,¹³ Last year, as working families struggled with rising health care costs and a recession, the five largest health insurance companies – WellPoint, UnitedHealth Group, Cigna, Aetna, and Humana – took in combined profits of $12.2 billion, up 56 percent over 2008.¹⁴ These health insurance companies’ profits grew even as nominal GDP decreased by 1 percent over this same time period.¹⁵ WellPoint accumulated more than $2.7 billion in profits in the most recent quarter alone.¹⁶

On a call today with reporters, Secretary Sebelius explained why insurance companies get away with rate increases like this:

Insurance companies are often responsible to shareholders as well as policy holders. And when you sell insurance, you make more money by insuring people who don’t get sick rather than people who do get sick.

A lot of these people on these plans have no choice other choice. They can either pay the rate increases or drop coverage.

Later in the day on another call with reporters, Congressman Earl Blumenauer joined small business owners from the Main Street Alliance to talk about their rate increases, further driving home the point that these kinds of rate hikes are commonplace.

On the call, business owners like Kelly Conklin from Bloomfield, NJ said health insurance rates had gone up for them as much as 124%. Conklin said:

My employees will have to decide if they want to continue getting coverage and pay their own way or drop coverage and take their chances.

These premium increases stifle business and prevent employees from contributing to economic growth because all of their wages go towards health care. We’re at end of our rope. We can’t afford to let this opportunity for reform slip away. We need to finish the job with the things the Main Street Alliance is fighting for – competition, transparency, and a public option.

Congressman Blumenauer responded:

It’s frustrating for me to hear these stories. Small business is paying disproportionate amount of the health care burden. Hearing of businesses spending 20% of payroll on health care isn’t uncommon.

It doesn’t have to be this way. We spend more on health care than any nation in the world. A few in America get the best health care, for the average American, we get worse results. We are sick more often, stay sick longer, die sooner, and our families and businesses suffer.

A few months ago, I introduced a bill to terminate health insurance for Congress until health reform is enacted. If they had to personally experience the tender mercies of the health care market – the gaps in coverage, the increasing premiums premiums, denials of care – I think we would enact reform in a matter of weeks!

Hopefully the House will use reconciliation, otherwise known as the majority vote process, to clean up the Senate bill and send it back to them for a vote. Then we would approve the remainder of the Senate bill.

Double digit rate hikes are the norm in America’s health care system today. They will only get worse if reform isn’t finished and finished right. Of course, the insurance industry thinks Secretary Sebelius is “vilifying” them, with AHIP – the main insurance industry lobby – releasing a statement today saying how much they think we need health reform. This is while they’re actively funneling money to the Chamber of Commerce to run ads trying to kill reform.

Sorry insurance companies, but we’ve known all along that you want to preserve the status quo so you can keep raking in your outrageous profits while the rest of the country struggles to get out of a deep recession. It’s up to Congress to fix this broken system and put the insurance companies in their place. Which means finishing reform right and getting it done now.

(also posted at the NOW! blog)

I’m proud to work for Health Care for America Now

 

A friend of mine and a dedicated netroots activist, Martin Bosworth, passed away suddenly.

Martin was the Managing Editor and a regular writer over at ConsumerAffairs.com. He wrote a personal blog over at Boztopia.com. And when I asked him to, he shared his deeply personal struggle with his health insurance company over here at The Seminal. Here’s an excerpt from that piece:

I’ve been beating the drum for public health care for a little while now–not as loudly as I should have, but definitely it’s been on my radar. After what my mom went through last year with not one, but two heart surgeries due to an “experimental” procedure-cum-clusterfuck, and all the horror stories my sister’s told me about being a freelancer while raising a son and trying to take care of one’s own health, the personal motives alone were enough for me to get involved.

But health insurance for myself isn’t easy to get. My company is profitable and pays me decently, but it’s tough to find a group insurer that will reliably cover a small business. Not enough profit in it unless you have a large number of employees. And private, self-insured plans like those offered by trade associations or professional groups are certainly worthy, but incredibly pricey and come with a list of things they don’t cover that’s as long as your arm.

Let me take a minute to explain my situation for those who don’t know me. I am what insurers and brokers would love to have as a customer–a guy who rarely sees the doctor, rarely gets sick, and is acutely interested in bettering his health. My biggest weakness is that I’m substantially overweight, but I certainly don’t need a doctor to tell me that. I’ve been working out like a demon and dieting strictly over the last six months, and though I still have a long way to go, I’ve lost 30 pounds and am healthier than I’ve been in years. Apart from that, I have low blood pressure, low cholesterol, no history of medical illness. (Hell, the last time I was in a hospital was in 2001 for an E.coli infection from drinking contaminated D.C. water.) I scrupulously consult medical information portals like WebMD for anything that might be a problem for me medically, and am generally that model of the “informed consumer” that the health insurance industry and its assorted sockpuppets like to trot out there as an alternative to real reform. But given that people can be turned down for coverage for the terrible crime of having allergies, I looked at myself as basically a recission waiting to happen.

Eventually, once I settled in to my new life here in L.A. I made a commitment to be healthier, and that included finding the right insurance plan for myself. But as luck or fate would have it, it was right in that black hole between insurance plans that I suddenly fell drastically ill.

…

Ensuring that health care reform isn’t just about providing coverage to the uninsured, but reforming the system to prevent excessive overbilling, medical errors, and other costly mistakes and bureaucratic snafus that only harm the patient and waste the provider’s time.

I have faith that my current issue will turn out okay. I’ve been through worse, after all. I think, in a philosophical sense, that I am going through this at this exact time in order to drive home how serious the need for better health care is. Listen to my story, share it, repeat it, and do everything you can to support real health care reform for all.

Like I said, being sick is scary enough. We don’t need to be afraid of getting well.

That positive attitude was Martin’s hallmark, and it served him well in his relentless advocacy for progressive causes.

Martin lived for a while in my apartment building in Washington, DC, and we would hang out and talk shop at a local watering hole every few months. He was a dedicated blogger and activist, and incredibly smart man, and way too young to die.

If you knew Martin, you can leave a memory on the Facebook memorial page set up by his family. Consumer Affairs, his employer, has a great obituary as well.

He will be missed.

 

Health Care for America Now has a new report out today on the insurance industry’s profits and customer base [pdf] and the statistics are shocking:

The five largest U.S. health insurance companies sailed through the worst economic downturn since the Great Depression to set new industry profit records in 2009, a feat accomplished by leaving behind 2.7 million americans who had been inprivate health plans. For customers who kept their benefits, the insurers raised rates and cost-sharing,and cut the share of premiums spent on medical care. Executives and shareholders of the five biggest for-profit health insurers, UnitedHealthGroup inc., WellPoint inc., Aetna Inc., Humana Inc., and Cigna Corp., enjoyed combined profit of $12.2 billion in 2009, up 56 percent from the previous year. It was the best year ever for Big Insurance.

…

The 2009 financial reports from the nation’s five largest insurance companies reveal that:

• The firms made $12.2 billion, an increase of $4.4 billion, or 56 percent, from 2008.
  • Four out of the five companies saw earnings increases, with CIGNA’s profits jumping 346 percent.
• The companies provided private insurance coverage to 2.7 million fewer people than the year before.
  • Four out of the five companies insured fewer people through private coverage. UnitedHealth alone insured 1.7 million fewer people through employer-based or individual coverage.
  • All but one of the five companies increased the number of people they covered through public insurance programs (Medicaid, CHIP and Medicare). UnitedHealth added 680,000 people in public plans.
• The proportion of premium dollars spent on health care expenses went down for three of the five firms, with higher proportions going to administrative expenses and profits.

The numbers may be shocking, but they shouldn’t be surprising. This is how the industry makes money, by charging people more and cutting the unprofitable people from their rolls. In fact, the one company who’s profit margin went down slightly this year – Aetna – was also the only company to add more customers to its rolls in 2009.

But the industry will go to any length to “justify” their profits and their policies of dropping their sick or expensive customers.

First, they’ll claim that the cost of medical care is going up, and so they need to raise prices, but it’s simply not true. As Congresswoman Rose DeLaura (D-CT) pointed out on a call with reporters announcing this report:

They’ll say the increases are justified because medical care is going up, and they’ll hide behind their actuaries to explain their rate increases. But this is coming from the same people who’ve been saying health insurance reform will increase costs. They can’t have it both ways.

She’s absolutely right. Insurance costs are skyrocketing now. Double-digit rate increases like those announced from Anthem in California have been common for years, and will continue to be “commonplace” if we don’t reform our health care system, according to Richard Kirsch, Health Care for America Now’s National Campaign Director. And yet, while raising their rates, insurers claim health reform will increase prices. It seems there’s only one way prices can go in according to the insurance industry – up.

Next, insurers will also claim that these profits aren’t out of the ordinary. As Andrew Kurz, former chief financial officer of Wisconsin Blue Cross-Blue Shield, explained, they are:

Insurers claim profit margins are only a slim 3-5%. But with competition, you have to carefully price products. Insurers don’t have to do that, they just raise rates on their most expensive customers. Even if insurers earn less money one year, they can raise prices the next to make up for it. And they can raise profits in concert with other insurance companies because they have anti-trust exemptions.

Insurance company profit margins put the industry in the top 10% of all industries, up there with cigarette manufacturers. Insurers price their products like a discretionary luxury, not something essential for health and well-being.

Finally, insurers will – perversely – try and blame the economy for their record-breaking fortunes, saying employers have been shedding jobs and therefor dropping insurance coverage, leading to a decrease in customers. And they’re certainly right in the sense that less jobs equals less employer-based health coverage, but that obscures the fact that employers have been steadily dropping health coverage for more employees for 15 years – even during good times – because the insurance industry’s prices keep skyrocketing much faster than inflation.

None of the excuses can explain away the basic reality that insurers make more money when they insure less people. They can pay their CEOs more (“administrative costs” rose this year) when they can charge the healthy exorbitant prices and drop or deny these loyal customers when they become sick and therefore expensive. Until we change that basic incentive structure, these Wall Street-run corporations will continue to operate in exactly the same way.

This is what health care reform is, in part, designed to change. Regulations on how much insurers must spend on medical care as opposed to profits and CEO pay will give consumers fair value for their premium dollars. Rules regarding rate increases will eliminate price gouging. Competition within the exchange (with a public option in the mix) and elimination of the insurance industry’s anti-trust exemption will force these companies to price their products within reach of their customers.

As Congressman DeLauro said this morning, “Despite [the insurance industry’s] best efforts, we passed a bill in the House and Senate, and we need to press forward to have health insurance reform to provide economic security to American families.”

(also posted at the NOW! blog)

I’m proud to work for Health Care for America Now

 

Like the rest of Wall Street, WellPoint – one of the nation’s largest insurers, with 14 state Blue Cross brands in its portfolio – is having a banner year.

Today, WellPoint announced that profits jumped 727%. In the middle of the biggest recession in generations, WellPoint is raking in the cash hand-over-fist.

Why the jump? Turns out, last year WellPoint spent even less on actual health care than it did in 2008.

In 2008, it spent 83.6% of the premiums it took in on care – paying for doctors, drugs, and the like. In 2009, they spent only 82.6% of your money on your care. That seemingly small difference actually belies bigger discrepancies. An analysis by the Senate Commerce Committee [pdf] found that while WellPoint spends about 85% of every premium dollar on care in the large group market that big businesses can tap into, they spend as low as 73% of every dollar collected through individual plans, and 79% on small group plans purchased by small businesses.

A small change in this “medical loss ratio” means billions of more dollars that can be spent on CEO pay or reported as profit. Indeed, Martin L. Miller, a Senior Vice President at WellPoint, said that lowering the amount of money WellPoint spends on health care “really is the driver of profitability” and that the lowering of this percentage “is really what’s driving our improved financial results this year.”

So, what did WellPoint do with that extra money?

They spent $4.7 million of it – $4.7 million of your dollars – on lobbying, a 21% increase from last year. And they secretly funneled more than $1 million to the Chamber of Commerce to run misleading attack ads trying to kill health reform. Oh, and CEO Angela Braley – the woman who said that her company wasn’t interested in expanding coverage if it meant making less money – made $8.7 million.

Isn’t that just sick? The list of injustices in this story is long.

WellPoint joins the rest of Wall Street and makes a huge profit this year while Americans are losing their jobs, their health care, and their houses. To guarantee that profit, WellPoint spends less of your money on your care. Instead, they steal those dollars you paid to finance your future care and pay $4.7 million to corporate lobbyists to “convince” Congress to kill reform. Oh, and they launder at least $1 million through the Chamber of Commerce for a smear campaign. And don’t even start on the CEO’s pay.

These companies can’t be allowed to operate this way any longer. A system where Wall Street-run corporations make money by spending less on medical care guarantees that under this system, our care will get worse and their profit margins will rise. Without limits on medical loss ratios, strong and enforced regulations on business practices, and a public health insurance option, nothing will change.

That’s why Congress and the President need to finish reform right. Every day that goes by without health care reform:

• 6,821 more people lose their health insurance [pdf]
• 2,548 more people file for bankruptcy because they got sick
• 60 more people die [pdf] because they don’t have the coverage they need

This problem is not going away. We need to get it done, get it done right, and get it done now.

(also posted at the NOW! blog)

I’m proud to work for Health Care for America Now