Warning: Co-op Kool Aid Is Bad for Your Health
by Wendell Potter
I’m beginning to think that the Kool-Aid being served at meetings of the Senate Finance Committee’s soon-to-be infamous Gang of Six is coming from either fantasy land or the health insurance industry.
For those of you who might not be following the sorry machinations of health care reform in the Senate Finance Committee, the Gang of Six is a group of three Democrats and three Republicans hand-picked by Committee Chair Max Baucus, who is one of the three Democrats. The gang meets often, supposedly drafting a bipartisan bill. In reality, if such a bill emerges, it will be a gift to the insurance industry because the gang includes some of the industry’s best friends on Capitol Hill.
Thanks to gang member Kent Conrad, a Democrat from North Dakota, the gang reportedly is giving serious consideration to replacing the good idea of a public insurance option with an idea that is sheer fantasy: a few nonprofit co-operatives that would be expected to compete with the cartel of giant for-profit insurance companies and “win in the marketplace,” to use a favorite term of my former CEO and cartel heavyweight, H. Edward Hanway.
If you don’t believe anything else I have said or written, please believe this: nonprofit co-operatives don’t stand a snowball’s chance of competing with those big companies and making a whit of a difference in the lives of the 75 million Americans who either have no insurance or have such marginal insurance they might as well have no insurance.
Kool-Aid came to mind as I was reading a story in the Wall Street Journal this week about Conrad’s continuing and naive insistence that co-ops could work. I remembered sitting in a meeting of other insurance company executives a few years ago. A leading advocate of the high-deductible plans the industry is trying to force us all into these days (and out of the plans insurance industry pollsters and politicians say we are all happy with and can stay in–if we wish upon a star), grew so exasperated after failing to convince us that these plans would be good for most Americans, he finally said, “Look, you’re just going to have to drink the Kool-Aid.”
It looks as if the Gang of Six is about to offer its co-op Kool-Aid to the other members of the Senate Finance and to tell them to drink up.
The reality is there has been a tremendous consolidation in the health insurance industry over the past 15 years. A cartel of very large for-profit insurance companies now dominates the industry. One out of every three Americans is enrolled in some kind of plan offered by just seven of those large companies. Almost all metropolitan areas in the country—and states that are more rural than urban— are now dominated by just two or three insurers. It is impossible for even one of the other large insurers to break into a market dominated by its competitors.
Take Philadelphia, where I live and where CIGNA, my former employer is based, as an example. The lion’s share of the insurance market in Philly is controlled by Independence Blue Cross and Aetna. CIGNA would love to be a big player in its own hometown but has never been able to scale up to be a serious competitor. It has some business there but not much compared to Independence and Aetna. If CIGNA can’t overcome the huge barriers to entering that market, a nonprofit co-op wouldn’t have a chance.
Advocates of co-ops point out that they work in a few other segments of the economy, and primarily in a few rural parts of the country, such as in the cranberry and raisin businesses.
Growing cranberries and raisins is a heck of a lot different from providing health care coverage to 50 million Americans who don’t have it because they can’t afford the overpriced policies from Big Insurance—or because they can’t buy coverage at any price because of a “pre-existing condition.”
To be sure, health insurers take every opportunity to badmouth co-ops, saying they are a backdoor to socialized medicine. Their criticism is disingenuous. Secretly, they would love to have a bill that creates co-ops that won’t work instead of a single-payer or public option that has proven successful in other western countries.
Wendell Potter is the Senior Fellow on Health Care for the Center for Media and Democracy in Madison, Wisconsin.
About 346 people die every week from lack of health care (health insurance). Thousands of people are losing their health insurance every day because they lost their job, couldn’t (or can’t afford to) pay their premiums, or were kicked out by their health insurance company.
These events/occurrences are happening every day while our federal workers and Senators and members of Congress enjoy excellent health care benefits and other benefits at tax payer expense. We’re entering flu season, and how many more uninsured people will die from the H1N1 virus and other viruses.
It is shameful, morally reprehensible, and outrageous; but the tax payer (especially ignorant town hall protesters) seems not to care. They rail at government, but have not the guts to stand up and ask for equal treatment.
Members of Congress and the Senate play down this offense by stating they have employer sponsored health insurance. They seem oblivious to the fact or just don’t care that their employer is the tax-payer (Americans).
We pay about 72% of federal employees (and that includes members of Congress and the Senate) health insurance premium. Yep, that’s right, the tax payer pays about 72% or slightly less of federal employees health insurance premium; and if you think about it, we really pay the entire premium because we pay federal employee’s wages and salary (which from that, they pay their share of the balance of that premium).
Why don’t you visit the Federal Employees Health and Benefit website and pay attention to what the entire premium is, and what portion we (tax payer) pay and what portion the federal employee pays.
Are you looking? My, what a large number of (tax payer subsidized) insurance companies and plans these federal employees have to choose from. Sort of like a health insurance exchange … don’t you think?
What really irks me and is the most reprehensible, is that we (the tax payer) is making the corrupt health insurance companies richer and richer while they turn around and deny you and me (the tax payer) coverage/insurance or they won’t pay for certain treatments/tests or they kick us out after they’ve paid an expensive claim or series of claims (which by the way, they’ve reported to the medical information bureau [MIB] for other health insurance and life insurance company members to see … so those other companies can deny you coverage if they so choose).
So again, hundreds of people are dying every day and others losing their health insurance (health care) while the corrupt health insurance companies (that Wendell Potter talks about) get richer and richer; all the while the tax payer pays Congress and Senate member’s health insurance premiums, wages, salary and other benefits.
Do you want this to continue? … Or are you going to tell your Congressman/woman or Senator that you want equal treatment (quality, affordable, comprehensive single payer or public option universal health care), or you’ll simply not support or vote for them ever again? It’s up to you. Make your choice.