“What Congress Didn’t Say”: Obamacare Outlaws Policies That Are Essentially Worthless
As I watched Health and Human Services Secretary Kathleen Sebelius being grilled by members of the House Energy and Commerce Committee last week, it was immediately clear to me just how many of them are in the pockets of the industry I used to work for.
Former colleagues of mine undoubtedly had a hand in writing the members’ comments and questions. Their behavior showed just how much more willing they are to protect the profits of health insurers than protect the health and financial well- being of their constituents.
I got the same treatment from many of those committee members when I provided testimony in March — or tried to. I had been invited to talk about the business practices of insurers — practices that have contributed to the rising number of uninsured and underinsured Americans. Among them: refusing to sell policies to millions of us because of preexisting conditions and charging exorbitant premiums for skimpy coverage to others.
When I tried to tell the tale of a Florida woman who died of cancer last year because she was priced out of the market and was unable to buy coverage at any price, Rep. Marsha Blackburn, a Republican from my home state of Tennessee, cut me off. She clearly had no interest in hearing about Leslie Elder or anything else I had to say. Instead, Blackburn held forth for more than five minutes and gave me all of 20 seconds to respond.
Throughout that hearing, a former co-worker from my Humana days, who later worked for the industry’s big lobbying group and then the Bush administration, stood a few feet behind Blackburn. That former co-worker now serves as senior policy adviser to the committee. So I was not the least bit surprised that Blackburn was determined to give me as little time to talk as possible.
During the Sebelius hearing, Blackburn and other GOP members talked about letters constituents have received informing them that their policies will not be available next year. How could that be, they asked, when the president assured us four years ago that, “If you like your health care plan, you can keep your health care plan.” Blackburn, et al accused the president of being dishonest.
Obama should not have used those exact words. That’s because one reason for the Affordable Care Act in the first place was to protect us from insurers all too willing to lure us into inadequate policies with slick marketing materials. Insurers have made billions in profits from selling such junk insurance, and people like Blackburn clearly want to get rid of the law that makes junk insurance illegal.
As I wrote in Deadly Spin, a years-long industry strategy has been to shift more and more medical expenses to patients. As part of that strategy, big insurance firms bought smaller companies that specialize in limited-benefit plans, which often provide such skimpy coverage that some insurance brokers have refused to sell them.
Cigna, for example, marketed a limited-benefit plan to narrowly targeted prospective customers: mid-sized employers with high employee turnover, such as chain restaurants. The underwriting criteria was specific. The average age of an employer’s workers couldn’t be higher than 40 and no more than 65 percent of the workers could be female. (Insurers have long charged women more than men because in their eyes being born female is a pre-existing condition.) In addition, employers had to have a 70 percent or higher annual employee-turnover rate, meaning that most employees wouldn’t stay on the job long enough to use their benefits. Employees also could not get coverage for care related to any pre-existing condition during their first six months of enrollment.
Limited-benefit plans like that one, blessedly, will not be available next year, and that’s because of the Affordable Care Act. Neither will plans with sky-high deductibles. Another way insurers have shifted costs to patients in order to enhance profits: luring or forcing them into plans with such high deductibles they join the ranks of the underinsured the moment they enroll. When people in these plans get seriously sick or injured, they are on the hook for thousands of dollars in medical bills they’ll have to pay out of their own pockets.
Millions of Americans — including my son, Alex — got letters from their insurers in the years before the ACA was enacted informing them that their plans were being discontinued. Why? To fulfill the industry strategy of moving people out of plans with affordable co-payments and co-insurance obligations and into high-deductible or limited-benefit plans. Such plans are far more profitable.
Keep this in mind the next time you hear a politician railing against Obamacare because people are getting letters from their insurers. The truth these politicians want to obscure is that Obamacare is protecting their constituents from buying coverage that provides little to no shield against financial ruin. And that protection is something the insurance industry wants to get rid of.
By: Wendell Potter, The Center for Public Integrity, November 4, 2013
“More Than Just A Message”: The Origins Of “If You Like Your Health Insurance, You Can Keep It”
There are good reasons why President Obama’s leading message on health care during the 2008 campaign, often repeated since, was “if you like your health insurance, you can keep it.” That message was created to overcome the fear-mongering that had blocked legislative efforts to make health care a government-guaranteed right in the United States for a century.
Our health is of central importance to our lives, deeply personal to our well-being and that of our loved ones. That concern has translated politically; for decades, people have told pollsters that health care is a top concern. It is why every 15 to 20 years – from 1912 to 2008 – the nation has returned to a discussion about whether and how the government should guarantee health coverage, the debate rising phoenix-like from one spectacular defeat after another. A big reason for those defeats has been that opponents have exploited those deep feelings to scare the public about proposed reforms.
As one of the people who engaged early on in building the effort that led to the passage of the Affordable Care Act, I am keenly aware of this history. I wrote in 2003 that debates over health care turn dramatically when they move from the problem to the solution. Almost everyone agrees there’s a problem, but when a solution is proposed, people’s first question will be, “how will it impact me?”
The extensive public opinion research we conducted from 2006 to 2008 emphasized that same point: people would look closely at how any proposed reforms impacted their lives. Yes, Americans are worried about high health care costs and alarmed at the prospect of losing coverage. Yes, they may be unhappy with the quality and security of the coverage they have. But at the same time, they are desperate to hold on to it, because at least it’s something.
We also knew that those who wanted to block health care reform would play on people’s fears, a lesson learned most recently in the 1993-1994 fight over the Clinton health plan, in which opponents made wild claims about government bureaucrats coming between you and your doctor and denying you coverage.
In that context, it was essential to assure the 85 percent of Americans with health coverage that reform would not be a threat. Hence, “If you like your health care, you can keep it.” That message reassured people and let them be open to the rest of the message: proposed reforms would guarantee quality, affordable coverage to everyone and fix the real problems people were facing. After all, the first part of that sentence, “if you like it,” implies that lots of people would love to improve their coverage by making it more affordable and secure and by ending insurance company abuses.
Hillary Clinton’s campaign understood this early on, and she used the message consistently when she talked about health care reform during the Democratic primaries. Soon after she dropped out, Obama made it a key part of his health care message. But the promise that you could keep your health care was more than just a message; for almost everyone, it was an accurate description of the almost identical reform policies proposed by Clinton and Obama, which became the foundation for the Affordable Care Act.
The ACA preserves (with small but important improvements) the current system of health care financing for the vast majority of Americans: employer-based coverage, Medicare, and Medicaid. Those are the 94 percent of people with coverage for whom the “if you like it, you can keep it” promise is true.
For the 6 percent of insured who buy coverage on their own, the more accurate message would have been, “If you have good insurance and you like it, you can keep it.” The ACA reforms a corrupt individual insurance market. No longer can insurers turn people down due to a pre-existing condition or raise rates and drop people because they get sick. The ACA bans the sale of plans with such skimpy benefits and high-out-of-pockets costs that they are worthless if someone gets seriously ill.
As we predicted, the opponents of reform used fear-mongering – death panels, government takeover of health care, and on and on – to try to kill the Affordable Care Act. They are still at it, including cynically jumping on the website’s enrollment problems and now insurance companies sending letters to customers which hide the fact that companies are being forced for the first time to sell a good, reliable product.
The opponents of reform have used reckless, baseless charges to try to kill reform. I’m glad that President Obama used a slight exaggeration to finally provide secure health coverage for all Americans.
By: Richard Kirsch, The National Memo, November 4, 2013
“The Radicals Are Actually Gaining Ground”: Sorry, There’s No Evidence Big Business Has Abandoned The Tea Party Or GOP
The current conventional wisdom floating around the media, seemingly extrapolated largely from quotes to the press from businessmen and their surrogates, is that “Big Business [is] trying to unseat the Tea Party.” However, there’s no evidence that this is happening.
Remember the first time Tea Party House Republicans held a gun to the US economy, refusing to pay America’s debts unless Democrats accepted a wide-ranging set of demands, and as a result, business leaders promised to spend big to defeat hostage-taking radicals?
“We’ll get rid of you,” said Tom Donohue, president of the US Chamber of Commerce to the Tea Party lawmakers.
That was 2011, during the first debt ceiling stand-off. And the following election year, none of the threats materialized.
In 2012, the Chamber ended up spending millions in undisclosed business funds to help elect Todd Akin, Ann Marie Buerkle, Dean Heller, Connie Mack, Denny Rehberg and other lawmakers who supported taking the debt ceiling hostage. Political action committees for the largest corporate interests in America, including General Motors, Goldman Sachs, Deloitte, the American Bankers Association and Honeywell, gave several million in direct donations to Tea Party hostage-takers, helping many survive the election last year and repeat their antics this year.
Now, it seems big business is bluffing again and advancing a false narrative that they are flexing their political muscle against the Tea Party. The storyline, boosted by ThinkProgress, Bloomberg, National Journal and the Associated Press, among others, is that corporate America has lost influence with the GOP and is helping to defeat lawmakers who threatened to push America into default.
So far, the spin makes the business community appear moderate, though there is nothing backing it up. Despite making statements and sending letters voicing their concern, the Chamber has failed to spend a single penny in advocacy against the Tea Party hostage-takers. It hasn’t rescinded any of its so-called “Free Enterprise Awards,” either. (The award has been given to many Tea Party lawmakers, including repeat hostage-takers like Representatives Steve Scalise (R-LA), Tom Graves (R-GA), and Morgan Griffith (R-VA), who encouraged a debt default by comparing it to a second American Revolution.)
Contrast this with how the Chamber behaved in 2009, when Democrats controlled the House of Representatives. By November of that year, twelve months before the midterms, the Chamber launched an onslaught of attack advertisements against House Democrats who did not vote their way, after months of issue ads in targeted districts.
Then, after helping the Tea Party seize the House and several governors’ mansions during the midterms, business groups pumped funds into an effort to gerrymander the Tea Party into permanent rule. CitiGroup and the US Chamber—both of which now complain about flirting dangerously close to default—provided huge donations to the RSLC, the political committee devoted to gerrymandering seats to the House GOP and Tea Party caucus’ advantage.
Will we see a reversal? Next year, there are a handful of high-profile primary races in which establishment Republicans are challenging incumbents, but none of them are proof that there is a concerted effort by business to drive out the Tea Party. Representative Justin Amash (R-MI) is being challenged on social issues and for his outspoken views on foreign policy, not on the debt ceiling. Representative Kerry Bentivolio (R-MI) has been a target for a primary well before his vote to shut down the government, largely because he is seen as a political novice who doesn’t know how to raise money. Representative Walter Jones (R-NC) is facing an establishment challenge, once again, but because he is an outsider within the party for his persistent votes to regulate Wall Street and crack down on political corruption.
Finally, Representative Scott DesJarlais (R-TN) may lose his seat because of revelations that he pressured a patient with whom he was having an affair to seek an abortion—not for his vote over the debt ceiling.
In fact, in terms of primary challenges, it looks like well-heeled GOP interest groups will successfully oust Boehner Republicans to make way for additional Tea Party–style politicians. Politico reports that Republican Representatives Mike Simpson (R-ID), Pete Sessions (R-TX), Lamar Smith (R-TX) and Bill Shuster (R-PA) face challenges from the right next year. Challengers in these races are calling for more debt ceiling hostage-taking. The Club for Growth, a pro-government shut down group funded largely by wealthy investors and businessmen, is leading the charge.
Here’s the reality: the large political action committee and trade associations that control much of corporate America’s campaign spending decisions will help the Tea Party and House GOP win re-election next year.
Big business political operatives lean Republican, and will stick with the party even if Republicans disrupt the economy for political reasons. Over the years, congressional Republicans waged a multifaceted effort to place partisans in their party in charge of the most influential lobby groups within the Beltway.
In the nineties, a mid-career John Boenher helped oust US Chamber president Richard Lesher—a moderate who sided with Democrats at times—to pave the way for Tom Donohue, a known GOP loyalist. During the George W. Bush era, Rick Santorum, Tom DeLay, Grover Norquist, Ed Gillespie and others created the “K Street Project” to install GOP operatives into key business lobbying positions.
Tom Perriello, a former one-term House Democrat from Virginia who was one of the first to be targeted by the US Chamber in attack ads aired a year before his re-election, says business leaders are too cozy with the GOP. Now the leader of the Center for American Progress Action Fund, he tells me that he’s “disappointed but not particularly surprised in the business community’s failure to force the Republicans to act reasonably on the CR, default or immigration, for that matter.… there seems to remain a broad cultural and political aversion [among lobbyists] to do anything that seems to help the Democrats and President Obama in particular.”
Still, Perriello thinks a change could be on the horizon. Many traditionally Republican business groups in Virginia have sat out the gubernatorial race, partially out of disgust for Ken Cuccinelli’s Tea Party extremism. Even GOP corporate lobbyists like John Feehery have been vocal in calling for the business community to do more to challenge the Tea Party.
But right now, it’s too early to say if 2014 will be any different than the last few congressional elections. The evidence suggests in fact that radicals are gaining ground within the GOP while facing little accountability. When it comes to taking on the Tea Party, business leaders have a lot of bark and no bite.
By: Lee Fang, The Nation, October 30, 2013
“A Demographic Death Spiral”: Immigration Reform Is Just One Of Many Reasons Why Hispanics Hate The GOP
In June, as the U.S. Senate debated comprehensive immigration reform, Senator Lindsey Graham (R-SC) voiced a commonly held theme among mainstream Republicans: After getting blown out among Hispanic and Latino voters in the 2012 elections, the GOP needed to get onboard with immigration reform, or face certain doom as America’s fastest growing minority continues to add more and more Democratic votes to the electorate.
“[I]f we don’t pass immigration reform, if we don’t get it off the table in a reasonable, practical way, it doesn’t matter who you run in 2016,” Graham told NBC’s David Gregory at the time. “We’re in a demographic death spiral as a party and the only way we can get back in good graces with the Hispanic community in my view is pass comprehensive immigration reform. If you don’t do that, it really doesn’t matter who we run in my view.”
At the time, I disputed Senator Graham’s claim that immigration reform could get the GOP “back in good graces with the Hispanic community,” arguing that it was just one of many issues on which Hispanic voters fundamentally disagree with the Republican Party:
According to a wide-ranging Pew Research study from April 2012, Hispanics are politically predisposed to the Democratic Party. The study found that 30 percent of Hispanics describe themselves as “liberal,” compared to just 21 percent of the general population. Only 32 percent describe themselves as “conservative,” compared to 34 percent of the population at large.
Furthermore, Hispanics clearly favor a Democratic vision of government. When asked whether they would prefer a bigger government providing more services or a smaller government providing fewer services, they chose big government by a staggering 75 to 19 percent margin. By contrast, the general population favors a smaller government by a 48 to 41 percent.
In short: Partnering with Democrats on comprehensive immigration reform certainly wouldn’t hurt the Republican Party among Hispanic voters, but it would fall far short of being the political game changer that Republicans like Graham hope. At the end of the day, there is just too much distance between the GOP’s priorities and those of the Hispanic community to imagine a major political shift.
Four months later, this divide is more clear than ever. Not only has the Republican Party failed to move the ball forward on immigration reform — allowing it to languish in the House as the latest victim of the fictional “Hastert Rule” — but it has continued to take positions on other issues that are certain to keep pushing Hispanic voters away from the GOP.
The Republican-driven government shutdown, for example, had a disproportionately negative impact on Hispanic and Latino families. According to Leticia Miranda, senior policy advisor for the National Council of La Raza, 37 percent of children in Head Start programs and 42 percent of Women, Infants and Children (WIC) program participants are Latino. Additionally, about 24 percent of the federal employees who faced furloughs during the crisis were Hispanic. A few positive gestures on immigration won’t erase the damage the Republican Party did to these families.
Additionally, the Affordable Care Act — which Republicans vainly hoped to kill by shutting down the government — is actually quite popular within the Hispanic community. In September, a Pew Research survey found that 61 percent of Hispanic-Americans support the health care law — well above the 42 percent approval rating that the law held in the poll among the general population. This makes sense, considering that Hispanics are the most underinsured demographic in the nation, and some 10 million Hispanics could gain coverage under the law. Don’t expect them to forget that the Republican Party shut down the government in an effort to stop that from happening.
These are just two of several issues — including education and gun reform – on which polls find Hispanics siding strongly with Democratic governing priorities over the GOP’s. Ultimately, even if Republicans do shift their position and sign on to a comprehensive immigration reform deal, they cannot expect to rapidly gain support among the Hispanic community. At least not unless they fundamentally change a platform that has been specifically tailored to attract voters with a completely different set of values.
By: Henry Decker, The National Memo, October 31, 2013
“Ricocheting Around The Conservative Media”: How A Wildly Misleading Obamacare Horror Story Is Born
Far too many breathless news stories about insurance plans being “canceled” or people facing “sticker shock” fail to convey even the most basic context: this is almost exclusively a phenomenon of the individual insurance market, which covers between 5 to 6 percent of the population.
Some of those people – mostly younger, healthier people who, because they’re in the top third of the income distribution aren’t eligible for subsidies – will have to pay higher premiums for more comprehensive coverage, even if they don’t want to. This can cause real economic hardship, and that’s a legitimate issue.
But it’s still an issue that will affect only a small slice of the population. Jonathan Gruber, a health care expert at MIT, estimates that around half of those six percent won’t experience any real change. “They have to buy new plans, but they will be pretty similar to what they had before,” he told Ryan Lizza. “It will essentially be relabeling.”
Gruber adds that most of those plans being canceled run afoul of a provision of the law banning any policy that requires people to pay more than $6,000 per year in health care expenses – plans that may lead to medical bankruptcies, the number one type of bankruptcy in the US.
That leaves about three percent of Americans who may face that tough situation where they have to pay more for coverage they may not want.
That’s not the impression you’d get from most media sources, and certainly not from the law’s ideological foes. Avik Roy, for example – a conservative columnist for Forbes who has not exactly distinguished himself for his honesty in the debates over Obamacare – has a piece today that’s remarkable both for its mendacity and its alarmism.
Roy’s headline is, “Obama Officials in 2010: 93 Million Americans Will be Unable to Keep Their Health Plans Under Obamacare.” And his claim rests on a very simple bait-and-switch…
“The [administration’s] mid-range estimate is that 66 percent of small employer plans and 45 percent of large employer plans will relinquish their grandfather status by the end of 2013,” wrote the administration on page 34,552 of the Register. All in all, more than half of employer-sponsored plans will lose their “grandfather status” and get canceled.
Note that “…and get canceled” are Roy’s words, not those of the Obama administration in 2010. And those words are completely misleading – falsely suggesting that tens of millions of people will feel a real impact like that three percent discussed above.
That an insurance plan is “grandfathered” only means that it has been in existence, with minimal changes in benefits or cost-sharing, since before the law was enacted. Roy would have his readers believe that all these plans will be “canceled,” but most group plans lose their grandfathered status by coming into compliance or through other changes that are routine in our insurance system and always have been. All grandfathered plans will lose their status over time, meaning for the most part that, as Gruber put it, they’ll be ‘relabelled.’ Nobody will notice these “cancellations.”
In fact, large-employer plans don’t even have to conform to those coverage requirements (they do have to follow certain other rules). And the share of workers in grandfathered plans has been shrinking for several years – from 56 percent in 2011 to 36 percent this year – yet we only started hearing about this as an issue in the past few weeks.
In the small-group market, some plans may need to add a missing benefit – maybe pediatric dental and vision care, for example – and premiums will rise accordingly, but that’s a far cry from Roy’s spin.
The reality, according to a 2012 study by the Urban Institute, is that “95 percent of those with some type of insurance coverage (employer, nongroup, public) without reform will have the same type of coverage under the ACA .” Maybe a different plan name, but the same type of coverage.
Yet one can be certain that Roy’s claim that 93 million Americans will be harmed when their insurance policies are “canceled,” while misleading on its face, will be ricocheting around the conservative media, taken as prime evidence that Obamacare is ruining millions of lives when, as Jonathan Gruber puts it, 97 percent of Americans are either untouched by the law or are clearly winners.
By: Joshua Holand, Moyers and Company, Bill Moyers Blog, October 31, 2013
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