President Obama's speech on health care last night showed us the results of his secret, closed door meetings with insurance companies and Big Pharma. At the center of the Obama plan for "change" is his embrace of the insurance industry (which has been at the heart of the failure of the current system). Insurance will be MANDATED under his proposals. Note too that as a Presidential candidate, Obama OPPOSED mandates (which Hillary proposed) thus adding to Obama's impressive list of policy reversals since his election. "It's the wrong approach...insurance companies will get a windfall" Congressman Dennis Kucinich correctly noted. Speaking on a You Tube video (posted on a diary here at DailyKos) Kucinich called the Obama plan a "bailout" of insurance companies. "We're looking at the inevitable demise of the public interest" was Kucinich's overall assessment. In this diary, I'm going to present some facts about the insurance industry in America that Obama seems to be unaware of. They show that the insurance industry is the last group any public-minded person would put at the center of "health care reform." SEE UPDATE #3 below for Kucinich's call for grass roots change. He needs our help!
But first some more commentary on Obama's speech from Obama's former Doctor--who also treated Dr. Martin Luther King--Dr. Quentin Young who was interviewed over at Democracynow.org:
It has already been emphasized, the problem with the American health system is crystal clear: it’s the private insurance companies. And if the Obama proposal is as I heard it, actually enhances the insurance presence, all these 45 million uninsured will be held up, with the government and other kinds of subsidies, to go into the private insurance market and all that that implies, with denial of care, pre-existing disease exclusions. We know the terrible pitfall we’re in now. And the answer continues to be clear-cut, like Medicare is: single payer for all.
...He’s essentially proposing to put some 45 million people in play for the private insurance companies, and we’ve had fifty years’ experience with them. They’ve had their chance. And I find really discouraging his point that it would be disruptive to change the system to a single-payer arrangement. I think that that doesn’t jibe with anything we know about healthcare finance. And time is running out. I think our economy—he said this—can’t tolerate the excessive costs imposed by the private insurance schemes.
And finally, he came out for mandates, which he opposed during his election campaign. Mandates, in plain talk, is a nice word for compulsory insurance. People will be required, unless they’re very poor, to fork up the money to get insurance. The 45 million people
http://www.democracynow.org/...
Dr. Quentin Young--who treated Obama for many years--also had this to say about the way Obama gingerly approached the public option, like someone in the 17th century would have approached a leper. He was being questioned by Amy Goodman:
AMY GOODMAN: Dr. Young, President Obama mentioned the proposal to create a single-payer system only once during his speech. He dismissed it as a possible way to reform the healthcare system.
DR. QUENTIN YOUNG: Well, that’s why I give him a D-minus. This, you know—
AMY GOODMAN: Let’s take a listen to what Obama said first, and then we’ll get your comment.
PRESIDENT BARACK OBAMA: There are those on the left who believe that the only way to fix the system is through a single-payer system like Canada’s, where we would—where we would severely restrict the private insurance market and have the government provide coverage for everybody. On the right, there are those who argue that we should end employer-based systems and leave individuals to buy health insurance on their own.
I’ve said—I have to say that there are arguments to be made for both these approaches. But either one would represent a radical shift that would disrupt the healthcare most people currently have. Since healthcare represents one-sixth of our economy, I believe it makes more sense to build on what works and fix what doesn’t, rather than try to build an entirely new system from scratch.
AMY GOODMAN: Dr. Quentin Young?
DR. QUENTIN YOUNG: It’s a fallacious argument. We have Medicare, which is a highly prized benefit to seniors and people who are disabled. It was installed in one year without any problem at all, and it’s the most popular insurance program in the nation. And it has to be said, three or four years ago, Obama himself, on the record, said single payer is the best solution. He did qualify it by saying, if he were starting from scratch, he would go with single payer. Well, we’re worse than scratch, we’re minus-scratch. And the American people can’t tolerate, our economy can’t tolerate, the excesses going on now.
He’s essentially proposing to put some 45 million people in play for the private insurance companies...
And I painfully note that Obama has shifted away from public option, saying he’s for it, but he’s looking for other alternatives. That’s a very bad way to conduct a struggle of this magnitude. If you tried these kinds of models on, say, civil rights or slavery, you’d come up very sad, if you compromise all the way.
SOURCE: same as above (emphasis added)
The problem with Obama's approach to health care "reform" is that he is turning to the one group (insurance companies) that has done the most to frustrate and stymie low cost and effective health care treatment. Obama does not seem to understand that insurance companies operate on a profit motive: they must take in more money than they pay out in claims otherwise they go broke. So, to cover their profits and their administrative costs, insurance companies routinely deny claims. Most Americans know this and have been victims of such actions, and certainly all lawyers, at least ones who have practiced law, also know this. Indeed, in California, the State Attorney General, Jerry Brown, is probing insurance companies high rates of policy denial--45 million claim denials since 1992 (about 21% of all claims are being denied). Here's more information on this again from Amy Goodman but this time interviewing Charles Idelson, a spokesperson for the California Nurses Association:
AMY GOODMAN: Talk about this data that you’ve just released.
CHARLES IDELSON: Well, this is data that the insurance companies have always wanted to hide, and it’s just now become available. It documents that the insurance companies have denied, in California alone, 45 million claims since 2002, and in the first half of this year alone, their rates continue to skyrocket. Some of these rates ranged as high as 40 percent for UnitedHealthcare’s PacifiCare. And other large, giant insurers like Blue Cross, Health Net, CIGNA, Kaiser were all in the range of 30 percent. So it shows a clear pattern of very high denials by the very insurance companies that people depend upon to assure that they get care they need when they need it.
AMY GOODMAN: Wait. I want to go through these figures again of the denial rates, of—let’s start with PacifiCare, which is here in California.
CHARLES IDELSON: PacifiCare is a subsidiary of UnitedHealthcare, one of the biggest insurance companies in the United States. Its denial rates are 39 or 40 percent, 39.6 percent.
AMY GOODMAN: Almost 40 percent.
CHARLES IDELSON: First half of this year, almost 40 percent. And then you have CIGNA, which is one-third of all claims, 33 percent. You have Health Net, 30 percent; Kaiser Permanente, 28 percent; and Blue Cross, 28 percent. So those are four of the biggest insurance companies in California. And it’s clear that a substantial percentage of their—of the claims that are submitted to them are rejected.
AMY GOODMAN: What do you feel needs to be done about this?
CHARLES IDELSON: Well, there’s been a lot of discussion about the public option in the healthcare reform debate. Our concern is that the problem is not the public option; it’s the private option. The insurance companies aren’t in business to provide care; they’re in business to make profits for their shareholders. One of the ways in which they make profits, the main way they make profits, is by collecting money from patients and from families and not paying money back in claims. They call it a medical loss ratio, every time they make a payment on a claim. So they’re in business to do that. They have warehouses full of bean counters and claims adjusters, whose sole purpose is to find reasons to not make payments.
And there are a variety of reasons they claim why they make these denials, having to do with—whether it’s paperwork, a war that goes on between the insurance companies and the doctors and the hospitals. They also say that some of the denials are because patients were seeking treatment for care that was not covered by the plan or that they were not eligible for or that were duplicate or were experimental or investigational. What’s been very interesting is that they’ve come up with a variety of reasons; the only they’ve left out is "the dog ate my homework." But the issue is serious enough that the Attorney General of California, Jerry Brown, has announced he’s going to conduct an investigation into the business practices of these companies and why these denial rates are so high.
SOURCE: http://www.democracynow.org/...
One might ask why this is important in light of the Obama speech? Here is the explanation again from the spokesperson for the California Nurses Association:
But it’s extremely important that this data has finally come to light, because it reflects one of the key issues that has not been discussed in the national healthcare debate, which is the denial of care by the insurance companies, which is so fundamental to the basic problem with the collapse of our healthcare system in this country. And one of the great tragedies is that issue has not come up in the national healthcare debate, that those practices by the insurance companies go unchecked, that there’s nothing in the national legislation that would change this behavior. And that’s why so many organizations like ours have been advocates of a Medicare for All, single-payer healthcare reform that would take these private insurance companies out of the business of denying care and gouging people for payments.
SOURCE: same as above (emphasis added)
It is true that President Obama in his speech mentioned that he envisioned a board of doctors and experts to oversee his "insurance exchange" but he provided little, in fact, NO details on this. What powers would they have? Would there be fees or penalties for abusive insurance practices? And who would appoint people to these boards? One can imagine that someone like Tom Daschle would serve on such a board or have major input as to who would. The trouble with such oversight boards is that they usually end up in bed with the people they are supposed to be regulating. That just happened with Mike Duvall, a California Assemblyman who was having an affair with a lobbyist from the same group that Duvall's energy committee was supposed to be overseeing. His oversight largely was from mirrors in his tryst's ceiling. More details here: http://features.csmonitor.com/...
This diary is getting long but let me share with you a personal experience that I have had that shows the folly of putting insurance companies at the heart of health care "reform". As a lawyer, I once represented an elderly man (in his 60's) who had a heart attack. He was taken to the emergency room of an excellent hospital, operated on for major surgery, and was in a coma for 10 days in an expensive intensive care unit. He had a comprehensive and expensive health care policy with CIGNA but once he woke from the coma and from near death and once he notified CIGNA of what happened, CIGNA refused coverage. They said he failed to give them timely notice of his hospitalization (even though he was in a coma in an intensive care unit for 10 days) within 7 days of "the event" as stipulated by the express, written terms of his policy. Indeed, his policy had that language (but most courts have thrown out such provisions because, among other things, there is unequal bargaining power between the company and the insured). Before he saw me, his doctors appealed to CIGNA to reconsider since their patient could not medically notify anyone. He was unmarried and had no family members who could help out. CIGNA adamantly refused to pay the bills which added up to over $300,000. After the patient retained me, I personally contacted CIGNA (by telephone and registered letter) and once again gave them the details (including sworn affadavits from highly respected doctors) and the status of the law (including a legal brief): it was medically IMPOSSIBLE for my client to inform CIGNA within the policy's stipulated 7 days and umpteen, highly esteemed, board-certified surgeons would testify to that fact. CIGNA didn't care. It is a general rule in their business to delay and put off payment. They forced my client and me to go to the trouble and expense of a jury trial that was not resolved for another five years. My client won at trial. But he died soon thereafter as a broken man from the terrible experiences he had to go through. CIGNA is in the BUSINESS of providing health care coverage. It will be a major beneficiary of Obama's health care "reform". (Note: Update #4 shows their market shares went up over 4% after Obama's speech).
If you agree with my sentiments and concerns, I would appreciate your recommending this diary. Whatever your position, for or against, I invite you to take part in a discussion below by posting your comments. But please, let us refrain from personal attacks. The issues before us are too serious to be drawn into a mudwrestling match.
UPDATE #1: Dennis Kucinich Video analyzing Obama Speech.
Yesterday, diarist Rjones2818 posted a video clip (about 4 1/2 minutes long) with the Congressman discussing the Obama speech. There were also many excellent comments in Rjone's diary which can be found here:
http://www.dailykos.com/...
UPDATE #2: Line-by-line Analysis of Obama Speech.
I posted yesterday a diary analyzing President Obama's speech line-by-line. The diary also has a helpful link to the New York Times which has a complete transcript of the President's speech. There were many excellent comments, pro and con, in the diary. It can be found here:
http://www.dailykos.com/...
UPDATE #3: NEWSFLASH! Kucinich calls for grass roots reform & needs our help!
I want to thank BigAlinWashSt who in a comment below provided a link to this. Dennis K has today endorsed the House Bill for single payer brought by Congressman Conyers and issued this plea for help:
There is only one true health care public option: Single payer. It covers everyone, all basic health care needs, with doctor of choice. No more premiums, co-pays or deductibles. All health care assets in America would become not-for-profit. The bill already exists. It is HR 676. Congressman John Conyers and I wrote the bill. Our bill has the support of 85 co-sponsors in the House. And it is backed by a growing national movement of labor, doctors, and nurses. The movement needs you. Please join me for tomorrow’s national conference call at 10:00pm EDT. Please call toll-free 1-800-230-1096.
The hour has arrived to begin anew the Civil Rights Movement, this time for Health Care for All. I am calling upon you to become a force in this movement. Go to Health Care as A Civil Right at Kucinich.us to learn how you can circulate a single-payer petition and organize in your community. Please help fund this effort. Go to Kucinich.us now, contribute.
The Preamble to the United States Constitution and Article One, Section 8 of the U.S. Constitution both describe an originating purpose of our United States: to promote the general welfare. Health care is a legitimate function of our government. Health care is a basic right in a Democratic society. It is no more a privilege based on ability to pay than is the right to vote, which was once accorded only to property owners.
Health care is also a moral imperative. Forty seven million Americans are uninsured. Fifty million Americans are underinsured. People are losing their homes, their jobs, their life’s savings, their retirement security and their financial health because they cannot pay medical bills, and despite this calamity Washington looks another way. We must not avert our eyes to this human suffering and this economic injustice.
Let’s prepare a response which Washington will long remember as the time when the people reclaimed their government from the insurance and pharmaceutical companies. Join us. Contribute . Together, we can initiate an action plan to intervene and provide health care for all.
A National Health Care for All Conference Call from Washington, DC, at 10 pm EDT, Thursday, September 10th at 1-800-230-1096. Join us, so that we can discuss our new beginning and ways in which we can all help. When you call in and the operator asks, "what conference call?" tell the operator, "Health Care for All."
On-line petition. Please contact your lists, your family and friends. Please sign the petition for a single payer system. I will deliver the petitions directly to your Congressperson.
Petition to download, print and circulate among friends and neighbors - including an instruction sheet.
Health Care Meet-Ups. Coming Thursday September 10 2009.
Tell A Friend.
I need your help to initiate this action. If you believe, as I do, that we can and must begin a new long-term state-by-state grassroots effort to create a single-payer, not-for-profit health care system, please contribute now at Kucinich.us
Dennis Kucinich is a frequent contributor to Global Research. Global Research Articles by Dennis Kucinich
SOURCE: http://www.globalresearch.ca/...
Those of us who are fed-up with the "no change" = "change we can believe in" coming from entenched interests in DC, now have a movement (and a person) we can believe in.
UPDATE #4: Health insurer shares jump after Obama Speech.
Wall St. correctly analyzed that the Obama "plan" is a bailout for insurance companies as their shares jumped after his speech:
Shares of UnitedHealth Group (UNH.N) and WellPoint Inc (WLP.N), the two largest health insurers, rose about 1 percent and 2 percent, respectively. Aetna Inc (AET.N) rose more than 2 percent and Cigna Corp (CI.N) jumped more than 4 percent.
http://www.reuters.com/...
UPDATE #5: NewYorkTimes article says insurance companies not only delighted with Obama speech they were also source for many of its ideas.
An excellent article up at the NYTimes web site on September 10 by Reed Abelson indicates that insurance carriers are delighted with the Obama speech and were also the source for many of its ideas:
"...as the specifics of Washington’s proposed overhaul have emerged in recent days — from Senator Max Baucus and in President Obama’s speech on Wednesday night — some industry analysts say insurers may not have much to fear.
"The outlook is moving away from the worst case," said Les Funtleyder, who follows the industry for the investment firm Miller Tabak & Company in New York.
Even Mr. Obama, who had recently stepped up his criticism of the industry, seemed to soften his stance on Wednesday. He recounted a few insurance horror stories — as might be politically necessary when arguing the need for a system makeover. But as he outlined his plans for health care, which focused mainly on a revamping of the nation’s insurance system, he was careful to point out that the executives who run those companies were not "bad people."
Mr. Obama also made clear that the industry’s biggest worry — the specter of a government-run health plan competing with commercial insurance plans — was not a necessary ingredient to the legislation he seeks. Additionally, he emphasized that he did not want a drastic move away from the current system, under which private companies provide coverage to the bulk of working Americans who are insured.
"I have no interest in putting insurance companies out of business," he said.
Some industry executives on Thursday acknowledged the president’s shift in tone. "The rhetoric seemed to be much more positive," said Ronald A. Williams, the chief executive of Aetna, one of the nation’s largest health insurers.
The reality may also be much more favorable to insurers, industry analysts said. Mr. Obama has already agreed to grant one of the industry’s dearest wishes: a requirement that everyone have coverage, which is reflected in the proposals in Congress.
"Under my plan," said Mr. Obama in a departure from his position during the campaign, "individuals will be required to carry basic health insurance — just as most states require you to carry auto insurance."
The requirement, which would be coupled with subsidies to help those who could not otherwise afford coverage, is likely to result in tens of millions of new customers for the industry. ...
"From the insurers’ standpoint, that was a very positive turn of events," said Rick Weissenstein, a health care policy analyst in the Washington Research Group at Concept Capital, which follows developments for investors.
Many of the changes to the insurance system now under discussion are the ones that have been advocated this year by the insurance companies themselves, said Karen M. Ignagni, the chief executive of America’s Health Insurance Plans, the industry trade group. "The industry has been the leader in creating the proposals everyone is about to endorse," she said.
She also praised Mr. Obama’s talking points, stressing the changes on which there was already general consensus. ...
Of course, there is still a possibility that Congress will back the creation of some sort of government-run plan, which is what insurers fear most. Because they say they cannot compete with the government’s ability to demand low prices from doctors and hospitals, insurers contend that it would ultimately push them out of the market, as they would not be able to offer coverage at competitive rates.
The president said Wednesday that he still favored the concept of a government-run plan, but he said that few Americans were likely to sign up, given the choice. He also said he would consider alternatives like one endorsed by Mr. Baucus, the Montana Democrat who is chairman of the powerful Senate Finance Committee.
Mr. Baucus has called for nonprofit insurance cooperatives as a competitor to private insurers....
The insurers "would prefer to have absolutely no public plan on the table," said Ana Gupte, an analyst with Sanford C. Bernstein & Company. Still, Ms. Gupte said, the insurers should benefit from the expansion in coverage — especially under Mr. Baucus’s proposed rules limiting the premiums that insurers would be able to charge from one person to the next. Under his proposal, premiums could vary by 7.5 times from the least expensive policy for the same benefits to the most expensive policy, based on age and other factors like use of tobacco."
...
(emphasis added)
http://www.nytimes.com/...