The Senate health care reform bill looks to be even better than a free ride
for the health insurance industry until 2014, the earliest date it will be
effective. It provides no expanded health coverage and only a very
watered-down public option, if any -- but not now, not until four years from
now. The health networks where companies will compete to attract new
enrollees will not actually be up and running until 2014, compared to 2013
in the House bill.
This means that outfits like CIGNA, Humana, Aetna, UnitedHealth Group and Wellpoint will enjoy four more annual enrollment periods to sign up the 31 million people who are not
covered by any insurance.
That's not all. The delay means four more years in which the giants can
raise their premiums before reform takes place. Already in 2009, there have
been premium hikes of 8% to 10% from some companies. A troubling 238-page
study by Wellpoint shows that premiums could triple for small businesses and
individuals under ObamaCare in some states. Average middle class buyers will
pay more for health insurance as well.
"It is unfortunate that the expanded coverage won't take place until 2014,"
says Oliver Henkel, director of government relations at the Cleveland
Clinic. "The American people expect reform before that. By 2014 there will
be two more elections and an awful lot can happen to reverse this bill."
Sen. Jay Rockefeller, D-W.V., the great-grandson of the founder of Standard
Oil, has thrown down the gauntlet at the giant health insurance industry for
its unwillingness to spend consumers' insurance premiums to make people
Rockefeller's charge against the insurers is comparable to the righteous
criticism of Wall Street banks that were bailed out with $700 billion in
taxpayer TARP money but refuse to lend the money to small and medium-sized
business. The health care reform bill under debate in the Senate would give
the insurance industry a $500 billion taxpayer subsidy that Rockefeller
insists be used for patient care, not corporate profits.
"The insurance industry gets to walk away with nearly half a trillion
dollars in federal subsidies -- without any requirement that they spend those
federal dollars on medical care," charges Rockefeller.
In a recent letter to CIGNA Chairman H. Edward Hanway, Rockefeller charges
that insurance companies are hiding the amounts used to help consumers and
small business owners "behind a wall of corporate secrecy." One smarmy
reason is that the insurers are under pressure from Wall Street to reduce
medical costs to pump up their stock price.
Blame the AFL-CIO as well for behind-the scenes weakening of the
controversial public option of the bill, which was meant to create
competition for the private profit-making insurers. Forbes has been given a
letter sent by the AFL-CIO to members of the Senate Finance Committee that
implores them not to allow union members with employer-based coverage to
"buy coverage in the newly created health insurance exchanges with a voucher
from their employer.".
The so-called "public option" to insure less healthy patients will cost
"typically higher premiums than the average plan," figures the Congressional
Budget Office, which estimates that only 3 million to 4 million people will
be covered by the public option. That's only about one out of every 10
uninsured people. That's scandalous and reveals the influence of the
powerful insurance and pharmaceutical industries. This is not anything
approaching socialism, but it is the thumb in the eye of the people that
were supposed to be helped.
Cleveland Clinic's Henkel does not believe that there are even 60 votes for
the watered down public option proposal. If indeed there is no reform bill
at all, Wall Street is licking its chops. Goldman Sachs reckons that the five giant health insurers will increase their profits 10% a year from 2010 to 2019, while their stocks rise on average 59%.
Rockefeller insists that the insurers use 85% of the $500 billion subsidy
for medical costs and not give in to pressure from Wall Street analysts to
reduce the amount of the premium going for medical care so as to increase
their profits and support their stock price.
Some sources tell Forbes that the White House has put out word that,
essentially, victory is needed at any cost, at any level of mediocrity. Even
Sen. Rockefeller, whose office is overwhelmed with phone calls from his West
Virginia constituents about the bill, has not promised to vote for the final
version. Good for him if he doesn't.