Wendell Potter: Baucus' Health Care Bill Needs Urgent Care

There are so many problems with the health care reform bill proposed by Senator Max Baucus (D-MT), chair of the Senate Finance Committee, it is little wonder that members of his committee have proposed more than 500 amendments to fix it. Unfortunately, some of the worst amendments that would make the bill even more of a gift to the health insurance industry are being offered by Republicans. If there is a God in heaven, they will not be adopted. But many other amendments are vital, including those that will make this key bill more like the better bills that have been reported out of four other Congressional committees. All of those bills call for the creation of a public insurance option, which is an absolutely critical element of reform. Without it, all of us who are not eligible for an existing government-run program, like the Medicare and VA programs, will be forced to buy coverage from the private insurance industry, which is dominated by a cartel of huge for-profit companies.

The adoption of an amendment to create a strong public option, supported by Senator Jay Rockefeller (D-WV) and many others on the committee, is certainly job one. But there are many additional fixes that are necessary, including other amendments being offered by Senator Rockefeller. They are so important I have sent a letter to Senator Baucus and the other members of the committee urging them to adopt the Rockefeller amendments that will require private insurance companies to be more honest and transparent in their dealings with consumers and more accountable to federal and state governments that must regulate them. As I note in the letter, without those amendments, insurance companies will be able to continue their most discriminatory practices without either transparency or real accountability. Here is my letter:

September 23, 2009

The Honorable Max Baucus
Committee on Finance
United States Senate
219 Dirksen Senate Office Building
Washington, DC 20510-6200

Dear Chairman Baucus:

As a former health insurance company executive, I am very concerned about the lack of transparency and accountability in the health insurance industry. That is why I urge you to incorporate Senator Rockefeller's Amendments #C12 and #C13 into the America's Healthy Future Act (AHFA), in particular with regard to the need for airtight regulations to protect consumer interests.

As proposed, AHFA will allow insurers to continue many of their most discriminatory practices without either transparency or real accountability: cost-shifting to their most vulnerable members through benefit designs that serve the needs of Wall Street; and rationing of care based on arbitrary opinions about what care is needed. In addition, there is no accountability for insurance companies to provide affordable and comprehensive health care coverage. A requirement that everyone buy health insurance accompanied by subsidies for people with low incomes does not ensure that Americans will have affordable care. The explosive cost growth in Massachusetts after health care reform is a case in point. And, AHFA has no mechanisms to enforce the insurance regulations that are included.

In addition, AHFA designates the National Association of Insurance Commissioners (NAIC) to write key regulations. This is of great concern to me because this proposal delegates to the NAIC, a private organization, with rule-making authority that is generally reserved for an agency of the federal government. Any institution given the authority to define the rules that will determine health insurance coverage for millions of Americans must be completely independent of the insurance industry and have a demonstrated record of putting the concerns of consumers first. The institution must also have the will and the resources to carry out the rulemaking process in a transparent and unbiased manner, with opportunity for input from all interested parties at each stage of the process. Based on its traditional manner of conducting business, the NAIC fails to meet any of these standards. The NAIC does not operate independently of the insurance industry. In fact, the NAIC is a private corporation, funded, in large part, by the insurance industry itself. Without industry dollars, the NAIC would not operate as it does today. In addition, eight of the last 10 NAIC presidents, as well as numerous commissioners, have gone directly from their posts to industry positions, creating the distinct impression that leadership positions at NAIC are mere stepping stones to more lucrative careers in the insurance industry.

For all these reasons, as well as my inside knowledge of how easily insurance companies circumvent existing regulations, I support Senator Rockefeller's Amendments #C12 and #C13 to AHFA, which will:

  • Create a grant program for state insurance departments to help them better enforce market rules and protect consumers.
  • Establish a federal role for private health insurance oversight and provide resources for the Department of Health and Human Services to hire expert staff to carry out these functions and coordinate with state regulators.
  • Require health insurance plans to disclose clear, accurate, and timely information on their policies and practices to ensure that they do not circumvent new federal health insurance regulations.
  • Add needed transparency requirements such as: establishing fair grievance and appeals procedures by health insurers; clarifying information for health professionals and freeing up time for patients by establishing transparency standards relating to reimbursement arrangements between health plans and providers; and requiring advance notice of plan changes so consumers get what they pay.
  • Establish America's Health Insurance Trust, a nonprofit, independent, consumer-driven organization that will evaluate and give ratings to all health insurance products offered through the National Health Insurance Exchange. Annual insurance product ratings will be based on factors such as affordability, adequacy, transparency, consumer satisfaction, provider satisfaction, and quality.
  • Ensure that ombudsman offices in each state are open to consumers at all stages of the appeal process to allow for early intervention and increase the likelihood of successful appeals.

Health insurance reform requires that we not only create strong new consumer protections. It also requires that those rules be effectively enforced. American families and businesses must have health insurance that is accountable to them, not to Wall Street.

Thank you for your consideration.

Wendell Potter, Senior Fellow on Health Care, Center for Media and Democracy

Cc: All Members of the Senate Finance Committee

I would also like to acknowledge the thoughtful work of 14 current and former members of the NAIC consumer liaison program who have expressed similar concerns to the Senate Finance Committee about giving rule-making authority to the NAIC. I was inspired by their letter, which is available here, and used some of their points in my own letter to Chairman Baucus. I'm grateful for their input.

Wendell Potter is a Senior Fellow at the Center for Media and Democracy based in Madison, Wisconsin.


How funny, Mr. Potter had no problem padding his pocket for 20 years with that evil insurance company money. Now he readily attacks this industry. Wonder how much money you are being paid here on the light side (since supposedly insurance companies are the dark side). Anyone who advocates government run healthcare, obviously has never lived under it. I wonder what kind of healthcare insurance Mr. Potter has now and if he would give that up for the public option. I would bet not.

My late father was before a death panel at a leading Boston hospital. He was on a government plan and I and my sister, a nurse, were not able get a feeding tube for him after a stroke as the doctor decided it was time to die. My sister, a nursing home nurse, said at the panel and the me that he could live one to two years. The doctor lied about his condition. These panels are already in place and wait for the codification from Washington Ralph briggs @ralphebriggs@yahoo "e' me for more details. thnk you

I suggest we need to redefine the common notions associated with healthcare. Obviously, healthcare is not just being treated by a doctor. Good nutrition and physical exercise are forms of healthcare. National defense is also a form of healthcare. We need to protect our bodies from harmful bacteria, viruses, terrorists, and invading armies. If we, as a nation, are willing to fund national defense initiatives to protect American lives than we should also be willing to federally fund decent healthcare for all Americans to protect their lives. As a nation, we are obviously willing to spend tremendous human and monetary resources to defend us from external forces. Just considering the ongoing wars in Iraq and Afghanistan -- we have lost many lives; many more have been physically and mentally injured; we have spent billions of dollars on waging the wars; and we have diverted precious human and physical resources away from more economically productive endeavors. In the Iraq war alone, over 4,000 soldiers have died and over 30,000 American soldiers have been injured. The military expenditure of human resources and monetary capital has been terribly expensive. By a conservative estimate, the United States military operations in Iraq and Afghanistan have cost our nation well over $900 billion and the cost is steadily increasing. However, the actual cost is largely a secondary consideration mainly because our nation has been galvanized to defend ourselves from terrorist attacks. We are very motivated in our battle to save American lives from external forces. And because lives are at stake, our national defense has been performed without any notion of budget deficit neutrality. National defense is a form of national healthcare. We are quite willing to spend whatever is needed to protect us from external threats. Unfortunately, as a nation, we’re unwilling to protect all of our citizens by providing healthcare for them. Each year many people in this country die because they don’t have healthcare coverage at all or because they don’t have adequate healthcare coverage. Two reputable studies report we currently have either 20,000 or 45,000 people in the US dying each year because of a lack of healthcare coverage (Institute of Medicine study – “Analysis on the Impact of Uninsurance on Mortality” at http://www.urban.org/UploadedPDF/411588_uninsured_dying.pdf and Harvard study - “Health Insurance and Mortality in U.S. Adults” at http://www.ncpa.org/pdfs/2009_harvard_health_study.pdf). If we average the total deaths per year from the 2 studies, that’s 32,500 people dying each year just because they don’t have healthcare coverage. To many of us, the fact that 32,500 people needlessly die each year is a flat statistic. Please allow me to animate it. The number of people in the US dying each year for lack of healthcare coverage is approximately the same as the number of students enrolled at one of our large universities. If this degree of mortality occurred at universities over 8 years, it’s like all University of Iowa students died one year; all University of Utah students died the next year; all Boston University students died the next year; all University of Tennessee students died the next year; all George Mason University students died the next year; all Colorado State University students died the next year; all University of Kansas students died the next year; and all San Diego State University students died the next year. This represents more than 230,000 people dying in 8 years simply because they didn’t have healthcare coverage. This is a disaster and it is preventable! President Obama and many other elected representatives have stated they want a healthcare reform bill that will not increase the federal deficit. Given the annual death toll from insufficient healthcare coverage, how can we ever begin to consider that this problem should only be solved in a manner that doesn’t increase government spending?!? Have we as a people and our democratically-elected representatives lost our minds? I’m outraged at this type of mean-spirited solution. We need to stop the needless suffering and dying in this country by supporting decent healthcare coverage for all – even if we have to spend some money to do it. It’s worth it.

With a rate of 15.3% of Americans still without insurance that is a very solid signifier that the system has not improved in 15 years. It is also very likely the demographic that needs the most assistance, but time and again is gravely overlooked. Our nation needs a change but many are afraid, be it personal investment at stake or simply fear of something different, to look at possibilities outside of what they already know works "just well enough." Just well enough however, isn't good enough for everyone. Not at a time when we are slipping down the world charts. There was an article I found written by several doctors and medical professionals and in the article there was a statistic that the World Health Organization has ranked the US as the 37th best country in health care, http://www.ourblook.com/component/option,com_sectionex/Itemid,200076/id,8/view,category/#catid107 this is very unacceptable considering at this point in time.