As someone who worked nearly two decades as a health insurance executive, I know that Mitt Romney’s selection of Rep. Paul Ryan as his running-mate is a dream come true for my former colleagues—and a potential nightmare for just about everyone else in America under the age of 55.
For years, the insurance industry has contributed generously to candidates who want to hand over the Medicare program to private insurance companies. That’s exactly what Ryan’s so-called “Path to Prosperity” would do. It would end the Medicare program as it has existed for almost half a century—a program that guarantees access to affordable care for senior citizens—and replace it with a scheme in which beneficiaries would be given “premium support” to help them buy coverage on the private market. Yes, the traditional Medicare program would continue to be a choice under the 2012 version of Ryan’s plan, but it would have to compete with private insurance companies. And because, under Ryan's plan, insurers would be able to cherry-pick the healthiest seniors, the traditional Medicare program would likely be unable to survive over the long haul. Perhaps it should come as no surprise that Ryan's wife is a former lobbyist for the health insurance industry.
As the head of corporate communications for Cigna—charged, among other tasks, with disseminating financial information to the news media—I came to understand the lengths insurers routinely go to to satisfy shareholders and analysts. During congressional testimony in 2009, I explained how they make promises they have no intention of keeping, how they flout regulations designed to protect consumers, and how they make it nearly impossible to understand—or even obtain—information consumers need. I described how the big for-profit insurance corporations, in their quest to meet Wall Street’s profit expectations, often cancel the coverage of policyholders who get sick and how they implement “medical management” practices that often result in policyholders being denied coverage for care their doctors recommend.
The Affordable Care Act outlaws many of the most egregious practices of the insurance industry, such as refusing to sell coverage to people with preexisting conditions and charging older people many times more than what they charge younger people for the same coverage. Ryan proposes not only to privatize Medicare but also to scrap those consumer protections, by repealing the reform law.
Of course, Mitt Romney is trying to muddy the issue. On the day he announced Ryan as his running mate, Romney accused President Obama of using the reform law to cut $700 billion from the Medicare program. That’s not true. In reality, that figure is what the Congressional Budget Office estimates will be saved over the next several years as a result of changes in the way Medicare pays doctors, hospitals and drug companies—changes that doctors, hospitals and drug companies endorsed.
They endorsed it because they understand the importance of providing coverage to the millions of people who are currently uninsured. The uninsured all too often show up at the emergency room to get care when they get sick or injured, and all too often they can’t pay their bills. Hospitals call this uncompensated care, but somebody has to pay for it, and that somebody is everybody with private insurance. Family premiums now cost more than $1,000 extra to help cover that uncompensated care. That’s what cost shifting is all about.
Romney’s misleading talking point about that $700 billion reminded me of the work my former colleagues in the insurance industry and I used to do to scare people into believing things that were not true, such as calling the Affordable Care Act a “government takeover of health care.” It wasn't hard to get our friends in politics and the media to take our spin and run with it.
And given what a boon Ryan's plan would be for the industry, it looks like health insurers just got a very well-placed friend indeed.
Wendell Potter, a former head of communications for one of the nation’s largest health insurers, is a senior analyst at The Center for Public Integrity. He is the author of Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR is Killing Health Care and Deceiving Americans