Obama Proposal to Regulate Premiums of Insurance Companies Is a Game Changer

Obama's proposal to regulate health care premiums forcefully reframes the public dialogue in exactly the right terms -- a battle between insurance industry profits and the welfare of average Americans.
This post was published on the now-closed HuffPost Contributor platform. Contributors control their own work and posted freely to our site. If you need to flag this entry as abusive, send us an email.

President Obama's proposal to regulate the premiums charged by health insurance companies is a game changer. And this week's health care summit will almost certainly serve as a tipping point in the year-long health care debate. The President's proposal to regulate health care premiums forcefully reframes the public dialogue in exactly the right terms -- a battle between insurance industry profits and the welfare of average Americans.

At the same time, President Obama has set up a forum that will turn a spotlight directly on Republican intransigence. He and Democrats have offered a thoroughly debated package of health insurance reforms. On Thursday -- right in the glare of the TV lights -- Republicans will be forced to make good on their claims to have solutions to fix our broken health care system as well. Most likely their answers will once again turn out to be nothing more than maneuvers aimed at helping shore up the profits of the health insurance industry and block meaningful reform.

In that case, it will be time for the voters, the President, the Congressional Leadership, Members of Congress, the editorial writers and pundits to tell the Republicans in no uncertain terms that if they are unwilling to lead or follow -- the time has come for them get out of the way.

After more than a year of debate, Congress must listen to everyday Americans, not to the insurance lobbyists who are spending millions to block health care reform so they can continue to gorge themselves on profits by raising premiums and actually reducing the number of American families to which they provide coverage.

Congress needs to act now and get it done right -- before other insurance companies start demanding huge rate increases like the 39% increase recently announced by Anthem Blue Cross. We've got to rein in the insurance companies right now.

The plain fact is that insurance companies, and their Republican defenders, don't want to pass any health care reform at all. The insurance companies simply don't want to insure people who might get sick. They want to continue to be free to find any excuse not to pay out on policies when people become ill. They want to be able to deny coverage to people with pre-existing conditions, because that's how they make the most money.

And the last thing they want is to have their premiums regulated or comply with the health care reform bill's requirement that they spend a minimum percentage of their revenue on actual health care -- instead of the armies of bureaucrats who do nothing but deny claims, battalions of lobbyists to keep things just as they are, and CEO remuneration -- like the $73 million golden parachute that went to Cigna's CEO, Ed Hanway. They want to be free to skim off as many dollars as possible in profits from every American health care dollar.

Thursday's televised summit should force the Republicans to defend their bogus claims that health care reform will cut Medicare when in fact the AARP says it will strengthen Medicare and actually eliminate the infamous "donut hole" gap in coverage that currently exists in the Medicare prescription drug program.

It will force them to face the fact that -- far from hurting small businesses as their scare tactics suggest - health care reform will make affordable health insurance available to small businesses and their employees for the first time -- and provide federal support that helps small employers pay for health insurance for their employees.

Finally, the summit will allow the American people to see firsthand, that while health care reform will make health insurance affordable to most Americans, the Republicans are offering nothing to provide Americans with affordable health insurance -- either by providing real competition, controlling premiums, or subsidizing the cost of those premiums to average families.

Of course, most importantly, the Health Care Summit will allow the President to make the case -- to key Members of Congress and the public -- that we simply cannot wait any longer to pass health care reform. After all, the longer we wait, the more insurance companies will be free to follow Anthem Blue Cross with draconian rate increases.

Those increases are caused, in part, because the recession has forced many Americans to drop their health insurance and instead bet that they will not get sick. As a result, a higher percentage of those remaining keep their insurance because they already have substantial health care costs. But to keep their profits high, insurance companies then raise their rates to account for this "adverse selection" among their customers. Of course that, in turn, forces more and more people who don't have current health care costs to drop coverage -- and the resulting spiral will leave fewer and fewer people covered with health insurance and skyrocketing premiums for those who are covered.

This is exactly the situation that health insurance reform addresses -- by providing coverage to everyone, regulating premium levels, subsidizing premiums for those who can't afford it, ending discrimination based on pre-existing conditions, and setting minimum "loss ratios" for insurance companies (the amount they pay for actual health care).

The Anthem Blue Cross rate increases put into high relief the absolute urgency of passing health insurance reform.

That urgency hits home in very personal terms for many American families. We can't wait for health care reform because every day more and more families go into bankruptcy because of catastrophic health care costs. We can't wait, since more and more people die every month because they didn't have the money for a checkup that would have caught their cancer or heart disease. We can't wait, because millions of Americans have been laid off from jobs that provided health insurance -- and now find it impossible to get insurance they can afford because they or their spouse have had a serious illness -- or because premiums are simply too high for them to afford.

From the standpoint of Democrats, let's hope that the summit will help make it crystal clear that passing health care reform is good politics. If, after this massive health care debate, we come up empty once again, Democrats will get all of the blame for passing bills in both houses that can be totally mischaracterized by the other side -- but we will have none of the benefits of passing landmark legislation. Nor will we have the benefit of allowing people to see for themselves, that once the bill is passed, the sky doesn't fall and that the fears so carefully sown by the insurance industry are completely unfounded.

If it is possible for the Senate to use the reconciliation process to include a public option as part of the bargain, as many leading Senators have suggested -- so much the better. The public option remains one of the most important and popular aspects of reform. But regardless, Congress must take action to create a framework for a new health insurance system built upon the premise that everyone can and must have health insurance they can afford.

The deep pockets of the insurance industry have allowed them to use misleading television advertising to reduce the popularity of the concept of health care reform. But they have not dented the popularity of the individual components of reform, like regulating premiums; eliminating denial of insurance based on pre-existing conditions; requiring insurance companies to spend a minimum amount of their revenue on actual health care instead of lobbyists, insurance bureaucrats, CEO salaries and profits; offering a choice of a public option; and -- most important -- assuring that everyone has access to affordable health insurance.

Democratic Members of Congress have to realize that the voters will only have the opportunity to get past the fog of misleading scare tactics and focus on these real elements of reform -- if the bill is actually passed. Republicans understand that completely. That's why they will do everything in their power to stop reform. Democrats must do everything we can to assure success.

Conventional Wisdom is ready and waiting to brand President Obama's signature legislative goal as a failure. And Republicans would like nothing better than to argue that the bright hopes of November 2008 have been doused by a grassroots conservative counter attack.

In fact, of course, changing America -- and defeating the insurance industry -- is very hard. They don't surrender quietly. They have not shrunk from using monstrous levels of misrepresentation and fear to prevent passage of health care reform.

But when we actually pass health insurance reform, there will be another, giant, less-discussed benefit for Democrats and Progressives -- a new narrative about overcoming enormous odds -- and winning. If we raise health care reform like a phoenix from the dead, we will reignite the entire progressive agenda and, just as important, the faith of the millions of activists who propelled Barack Obama and Democrats into power a year and a half ago. Faith that we can win -- that change is possible.

The signature incantation of the Obama campaign was not born out of the heady successes of the Iowa caucuses. It took hold on a rainy day in South Carolina, when things looked pretty bleak and a not-so-young African American woman interrupted a not-so-exciting rally with the old civil rights call and response. "Fired Up!" she shouted. And the audience responded: "Ready to Go!" And again: "Fired Up!"... "Ready to Go!"...and again. Each time with more enthusiasm, and more belief in the campaign's slogan: "Yes We Can!"

If we win health care reform, the Conventional Wisdom will collapse and "Yes We Can!" will once again be on the lips of millions of Americans. But to make it so, in the last crucial, decisive weeks of the battle for health care reform, all of us must once again get "Fired Up and Ready to Go!"

Robert Creamer is a long-time political organizer and strategist, and author of the recent book: Stand Up Straight: How Progressives Can Win, available on Amazon.com.

Popular in the Community