Breaking News: Insurance Industry Launders $10M to $20M in Attack Ads

This is a special alert about breaking news showing that health insurance companies secretly gave the Chamber of Commerce millions of dollars to run third-party attack ads at the same time they were telling Congress they continued to "strongly support reform." On the one hand, we're not surprised, but on the other hand, we're outraged by the lies and deception that have been documented.

The new story in the National Journal proves what I have been talking about, since I switched from being a spokesman for the health insurance industry to being a vocal critic of it. The industry is laundering millions of dollars through third parties to influence health care reform legislation and kill provisions that might hinder insurers' profits.

The revelations are so significant that Congress should launch an immediate investigation and hold public hearings before the House and Senate schedule final votes on health care reform. Please sign our petition demanding an investigation now.

This breaking story shows that just as dealings with the Obama administration and congressional Democrats soured last summer, six of the nation's biggest health insurers began quietly pumping big money into third-party television ads aimed at significantly modifying, or killing, the major health reform bills moving through Congress. That money, between $10 million and $20 million, came from Aetna, CIGNA, Humana, Kaiser Foundation Health Plans, UnitedHealth Group and WellPoint, according to two health care lobbyists familiar with the transactions. The companies are all members of the powerful trade group "America's Health Insurance Plans."

Over the past several months -- including during my Congressional testimony in both the House and Senate -- I have talked about how health insurance companies and America's Health Insurance Plans cannot be trusted, how they never intended to be the good-faith "partners" with President Obama and congressional leaders to enact reform, despite their public assurances that they would be. I have disclosed how the industry has long conducted duplicitous public relations campaigns -- one it wants the public to know about, the other that it goes to great lengths to hide from public view.

And, I have explained how the insurers work with its big business and political allies to disseminate lies and misleading information. One of the industry's biggest shills has long been the U.S. Chamber of Commerce, which has funneled money through many other allies, including the Federation of Independent Business, which assisted the industry in killing the "Patient's Bill of Rights" reform legislation in the 1990s. Congress owes it to the American public to investigate the insurance industry's involvement in this deception, to determine if laws have been broken and to consider legislation to close loopholes that allow powerful special interests to engage in this kind of activity.

So, I am making two urgent requests. First, I am asking you to please sign our petition to Congress demanding an immediate investigation of how much the insurance companies have spent trying to undermine reform and mislead the American people in the process. Simply sign up here to lend your voice.

Second, I am asking you to please donate to the Center for Media and Democracy. In the past six months, we've been at the front lines of this fight and our funding to continue this work has literally run out. Please donate now, as much as you can spare, to help us continue to take on the insurance companies in the coming months. We have a crucial role to play in spotlighting key issues in any investigation and in the national reform fight as well as in the next phase of this battle, in the states, once a bill passes. I will be discussing this issue on Wednesday night when I return as a guest on Countdown with Keith Olbermann on MSNBC. Only with your generous support will the Center's work be able to survive and thrive.

Despite our small size compared to our opponents, together we are making a big difference in this debate and on other key issues. Just this week, CMD's new leader, Lisa Graves, launched a drive to fight the Washington Post's decision to outsource reporting to a group funded by an anti-Social Security billionaire. Her immediate effort to get citizens to sign on to a petition demanding that the Post end its partnership with this supposedly "independent" media group -- whose formal advisers include CIGNA's lobbyist -- helped ignite other petition drives. You can help tell the Post "no more fake news" by clicking here. Imagine if the National Journal had outsourced its health reform reporting to such a group; there'd be no investigative report like the one on this insurance industry scandal that just broke.

Just as we cannot let the health insurance companies pretend they are "for reform" while secretly buying millions of dollars worth of attack ads against reform, we also cannot stand silent when newspapers outsource the writing of the "news" to groups advised by health insurance companies. CMD is the only public interest group whose core mission is to stand up to both these kinds of efforts. That's one of the reasons why I have been proud to be part of CMD, and one of the reasons I implore you to please donate to CMD today.

Tonight's breaking news was just too important to not reach out to you right away to ask you to join our call for a full investigation. Thank you for all you have done and are doing to support our work!


I used to work in the insurance industry in Australia and New Zealand. There's an internal war being waged with insurance companies and the banks. It's all part of the plan.

The history of health insurance in the U.S. and my experience in this industry (CIGNA) explains why I believe health care reform with a public option would benefit our economy and all Americans. In 1925 doctors and hospitals had learned enough about disease in the preceding decade to be reliably helpful treating sick people. Soon they had to charge more for their services than most people could easily afford. By the time of the Great Depression the affordability problem so worsened that the administrator of Baylor Hospital in Dallas created a payment system that evolved into Blue Cross. In exchange for a tax break, and by charging everyone the same premium regardless of age, gender, or pre-existing conditions, the Blues made quality health insurance available to a great number of people. Observing the success of the Blues and putting aside earlier doubt about the viability of health insurance, Commercial insurers entered the market. Their sales efforts accelerated in the 1940s as businesses sought to skirt wartime wage controls by offering insurance to compete for labor. (President G. W. Bush’s proposal to alter health insurance tax exemption policy to benefit the self-employed may have hastened what is likely to be businesses’ inevitable withdraw from health insurance. Bush’s failure to put forward a viable alternative to the workplace as an insurance supplier doomed his proposal). To compete with the Blues and to skim off the best risks commercial insurers configured their rating systems to exclude potential high risk policyholders entirely. To survive the Blues followed suite. Without a tax advantage they became virtually indistinguishable from other health insurers. Then large corporations employing a great number of younger people began to self-insure, relying on insurance companies for claims processing only. Rising concern about medical care costs and its fair distribution prompted an increasingly greater number of Americans to call for a government funded universal health care system as has been adopted successfully in every industrialized nation. Most conservatives oppose this solution claiming, often incorrectly, it's “socialistic and detrimental to quality care.” Nonetheless, driven by widespread public recognition that private insurance underserved the needs of seniors and our poorest citizens, Medicare and Medicaid came to be in 1966. Forty years later in a Republican Congress Medicare Part D, a tax-payer subsidized prescription drug plan promoted by drug and insurance company lobbyist, went into effect. To obtain coverage. it required seniors to enroll in private insurance. In some respects, Part D worsened problems in our health system, It enlarged unfunded entitlements and presented a confusing array of prescription drug plans with high marketing and administrative costs. In Hartford County, CT, 48 plans are offered. With annual open enrollments, covered drugs and premium costs are altered annually. As the private market progressed the cost of illness increasingly shifted to the sickest people undermining the very idea such costs should be spread out among the general population. Today 30% of Americans are covered by one or another kind of government funded health insurance. Collectively these plans account for 45% of U.S. expenditures for health care. Viewed in a broad perspective, these plans function to provide affordable, quality insurance coverage. Medical services are delivered by mostly private sector physicians and hospitals. Is this socialism? To sustain revenue growth and profits in markets remaining open to them, private insurers prospered by making corporate acquisitions, selling new products such as dental insurance and, prompted by improving medical technology and growing inefficiencies in the U.S. health-care-delivery system, health maintenance organization (HMO) programs. Still, consumers in the broad market for health insurance remained under-served. Costs for health services and insurance continued to rise at a rate exceeding general inflation. Health Savings Accounts, intended to foster consumer choice and price competition, only led to more confusing insurance alternatives that concealed the continuing rise in Americans without private insurance. Cost went on shifting from the young and healthy to the old and sick. Markets became dominated by a handful of insurers. Employers outright reduced or eliminated employee health-care benefits. Hospitals merged and became less willing to help low-income patients. Ruinously expensive, discriminatory, and unethical private health care products are an affront to anyone with a capacity for moral outrage or a sense of social responsibility. The U.S., a self-proclaimed champion of capitalism and innovation, is observing the private sector in other countries outperform us. Last year in India, relying on economy of scale, cardiac surgeons at a 1,000 bed hospital (the average U.S. hospital has 160 beds) performed 3,174 by-pass surgeries, more than double the 1,367 at Cleveland Clinic, a U.S. leader. India's entrepreneurs plan to build a 2,000-bed hospital in the Cayman Islands to deliver elective and necessary services 50% below the costs in the U.S. In 2007 Americans seeking medical care in other countries numbered 750,000; in 2010 that number is projected to rise to 1 million. So, what is the best means to secure the obviously need for U.S. health-care reform? According to the non-partisan Congressional Budget Office (CBO), Democrat legislation passed in the House and a parallel bill before the Senate would extend protection to 36 million uninsured Americans, save thousands of lives every year, and reduce the deficit by $100+ billion over 10 years. Moreover, the bills would increase choices for everyone, disallow medical underwriting, pre-existing condition exclusions and, subject to approval in Congress, implement structural and provider reimbursement changes to curtail run-away health care costs devastating our economy. House Republicans filed health reform bills but the GOP seems reluctant to talk about them, even at town hall meetings. Best known is the Boehner bill. According to the COB, it would extend coverage to 3 million Americans meaning the proportion of non-elderly with insurance would remain about where it is today. It shaves $68 billion off the deficit in 10 years. The Boehner bill shies away from politically challenging but common sense provisions benefiting individuals purchasing health insurance coverage. Examples are funding subsidies for lower-income people, abolishing the tax exclusion for employer coverage, and health insurance exchanges where people unable to get coverage through work can shop for competitive insurance plans. Can Americans hurt by our progressively failing health system expect effective reform will finally occur? Radio and TV talk-show hosts have so politicized reform that enactment is at risk. Some in Congress wish to kill reform only to destroy Obama, Others push for tort reform and other solutions that haven't demonstrated effectiveness as an agent for for reducing consumer health care costs. Then there are politicians who place self interests and ego ahead of public needs. Connecticut’s Senator Lieberman, former Democrat who turned Independent, comes to mind. As Gore’s running mate, he supported a Medicare buy-in plan and continued to do so as recently as September. Now he’s opposed to it, bowing to an insurance industry that under-serves Americans. There’s a lot of history that isn’t fit to repeat itself. Hopefully, this Congress will overcome decade’s of resistance by opponents of reform to end America’s status as the only developed country that places so many of its citizens at risk for medical bankruptcy. If Congress fails us again I’m going to be very ill.

Just as we saw Americans lose their retirement accounts and life savings in the Wall Street financial debacle, the baby boomer generation (which Wall Street simply sees as a big ball of cash coming down the pike) is about to get rolled a second time by the Wall Street insurance companies. As a healthcare professional working in home health, I see it already---and this is just the beginning of something that is going to be horrible and devastating beyond anything we've seen in the financial meltdown. My mom commented the other day, "Why doesn't Obama stop them?---if the President can't stop them, who can?" I said, "He's trying, but the truth is he can't. The President and the Congress don't control the country anymore----Wall Street runs this country." It's far gone. It's going to take a huge movement and, unfortunately, not enough people are in a position to see what is coming----if they were, we'd have that movement now.

The insurance industry denies (and their interest group) that payments to providers for treatments are purposefully delayed. Ask any doctor, hospital, dentist, lab and they will share the truth. Companies continually owe these providers 30 to 35% of the submitted claims. Add this to the quick rejection of procedures generally by non professionals.