The Wonk Room v. AHIP on Insurer Profits

Sheet Music, Photo of Al Bernard, Singer and Vaudeville Star (1920)

Very interesting article by Igor Volsky over at The Wonk Room on Health Insurer profits and the recent campaign by AHIP to “contextualize” those numbers. I highly recommend you take a look, as Volsky puts Insurer profit, medical loss ratios and CEO compensation in a readily digestible (even if sickening) format while taking AHIP’s “Fact Check” to task.

I do, however, have a contention: for CEO compensation, the source relied upon–Modern Health Care– failed to include “Options Granted” during the course of the year. Not merely a matter of accounting,  for someone like Ronald A. Williams of Aetna, that number added $13,537,365 to his Compensation of “10.8 million.” Add in the $101,487 for “personal use of a corporate aircraft and vehicle, as well as financial planning and 401(k) company matches” and we then have Total Compensation in 2008 for Mr. Williams of $24,300,112 — or, as we’ve posted before, $467,309.85 Per Week.

You can read The Wonk Room article here:

Health Insurance Industry Fudges Data To Downplay Its Astronomical Profits

Health Care Reform and the Public Insurance Plan: “Framing the Debate,” and Fording the Corporate Dam of Shareholder Wealth Maximization

Photo by WyrdLight via Wikimedia Commons

Kaiser.org has recently noted that “Liberal and conservative interest groups ‘have begun a fierce ideological battle, with each side trying to shape the public’s perception of a public insurance plan,’ the Christian Science Monitor reports.”

Kaiser states:

The Health Policy Consensus Group, a coalition of conservative interest groups spearheaded by the Heritage Foundation, listed the creation of a public insurance option as the No. 1 “deal killer” for health care reform. The group argues that the government would use its “regulatory, pricing, and taxing authority” to make it nearly impossible for private insurers to compete, leaving U.S. residents without a private alternative.”

Let’s attempt to understand the argument against a public insurance plan. To do so, I would suggest that it will be of some help to understand the nature of a “public plan,” and, perhaps just as importantly, where the interests lie.

When we speak of “a public insurance plan,” we speak essentially of expansion, not creation: Medicare, Medicaid and SCHIP are “public plans,” as are those administered by the Veterans Administration and the Indian Health Service.  At present, however, these plans are tailored to bring medical care to people who meet certain criteria. At present, this country is estimated to have close to 50 million people who are uninsured: primarily people who either lack the money or employment requisite to obtain private health insurance or who fail to meet the criteria requisite for enrollment in any of the public plans as they are presently configured.

The “public plan” proposal would expand the criteria for enrollment in extant “public plans” and perhaps constitute other service providers to administer to the need.   So…the argument against a public plan is essentially an argument against making these plans (or very similar plans) available to a greater number of people. Why? Simply put, those who would be serviced by an expanded “public plan” would thereby be rendered unavailable to Private Insurers as customers and generally speaking, less customers = less profit.

Understandably, those who oppose a “public plan,” such as America’s Health Insurance Plans (AHIP), have proposed that as a means of achieving universal coverage, all Americans should be forced (”mandated”) to purchase health insurance from, well, Private Insurers. The plan calls for the Government to subsidize this purchase of private insurance. Given that there are close to 50 million uninsured, this would result in an increase of tens of millions of paying customers for Private Insurers.  This proposal has been rather aptly compared by Jeff Emanuel of The American Spectator to an automaker bailout which would require each American to buy a car.

The Heritage Foundation’s Health Policy Consensus Group, opposed to a public plan, is said to argue that with the advent of an expanded public plan

“the government would use its “regulatory, pricing, and taxing authority” to make it nearly impossible for private insurers to compete….”

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The Health Reform Dialogue Group Recommends Health Care Overhaul

Photo by Jeffrey Beall via Flickr

Throughout the country, newspapers are reporting on the meeting of the Health Reform Dialogue Group (the “Group”).  The diverse group has been meeting to discuss the overhaul of the current national health care system.

The Associated Press reports:

Eighteen groups representing consumers, business, insurers, doctors and hospitals say they have reached agreement on how they would like to see the nation’s health care system overhauled.

The groups, calling themselves the Health Reform Dialogue, say the uninsured should be covered through a combination of expanded government programs and subsidies to purchase private health coverage.

The 18 organizations in the group have been meeting for six months. While they failed to resolve several major issues, their agreement could serve as a starting point for lawmakers trying to craft a plan this year that can win broad support.

Some of the major health care players within this 18-organization group includes: AARP, American’s Health Insurance Plans, American Hospital Association, American Medical Association, Blue Cross and Blue Shield Association, and U.S. Chamber of Commerce.  This group represents both private and public interest groups.

As a result of the Group’s meetings, the Group issued a Report (PDF) containing multiple recommendations.  The Report states that the meetings have been productive: Read more

Poll Shows Americns Not in Favor of Mandatory Health Insurance, But Do Want a Return on Taxpayer Funded Medical Innovation

Marketwatch reports that a recent poll conducted by Consumer Watchdog shows that”Less than 15% of U.S. voters support, and 53% oppose, a proposal pushed by health insurers requiring every American to provide proof of private health insurance or face tax penalties or other fines.” A mandatory individual health insurance requirement is one of the provisions included in the recently unveiled AHIP health care reform proposal. Earlier in the week, in The American Spectator, Jeff Emanuel likened AHIP’s Proposal to an automobile manufacturer bailout which required every American to buy a car. See Health Reform Watch post here.

Marketwatch reports that the poll also found that “by just under a two-to-one margin voters favor requiring a return on taxpayer-funded research that leads to new medical treatments or prescription drugs.”

Marketwatch noted that “The issue is particularly important as President-elect Obama is proposing doubling research funding from the National Institutes of Health. He is also expected to end the Bush Administration’s ban on federal fund of most embryonic stem cell research.” Read full article here.

AHIP Plan Criticized in American Spectator

In a “Special Report,” Mandate Nation, Jeff Emanuel roundly criticized the AHIP Health Reform Plan released last week. Mr. Emanuel likened AHIP’s plan to an automobile manufacturer bailout which required every American to buy a car. He noted that the AHIP proposal includes “an enforceable individual coverage mandate,” and provision which calls for Congress “to legislate the cost of health care down by 30% over the next five years.”

Emanuel chided: “Imagine that: a “reform” plan, released by a service provider, that proposes that the government (a) require every American (all 300 million plus of them) to purchase what they’re selling, often with taxpayer dollars, and (b) declare by law that those insurers must be charged less by providers and hospitals for the services their policyholders require.” Read the full article here.