ÿþ<html> <head> <meta http-equiv="content-type" content="text/html;charset=iso-8859-1"> <title>OnlineColumnist®.com: Duke's Damage Control</title> <meta name="generator" content="Adobe GoLive 4"> <style type="text/css"> .style1 { font-size: x-large; font-weight: bold; } </style> </head> <body bgcolor="white" vlink="black"> <center> <table cool width="624" height="2719" border="0" cellpadding="0" cellspacing="0" gridx="16" showgridx gridy="16" showgridy> <tr height="79"> <td width="116" height="118" rowspan="2" valign="top" align="left" xpos="0"> <a href="081609.html"><img height="110" width="62" src="images/discobolos.logo.transp.gif" border="0"></a></td> <td width="24" height="118" rowspan="2"></td> <td width="465" height="79" colspan="2" valign="top" align="left" xpos="140"><img height="75" width="450" src="images/banner.GIF"></td> <td width="18" height="118" rowspan="2"></td> <td width="1" height="79"><spacer type="block" width="1" height="79"></td> </tr> <tr height="39"> <td width="182" height="39"></td> <td width="283" height="39" valign="top" align="left" xpos="322"><a href="aboutdiscobolos.html"><img height="14" width="267" src="images/divisionofNEW.GIF" border="0"></a></td> <td width="1" height="39"><spacer type="block" width="1" height="39"></td> </tr> <tr height="26"> <td width="624" height="26" colspan="6" valign="top" align="left" xpos="0"> <table border="0" width="100%" bgcolor="black" cellspacing="0"> <tr> <td> <table border="0" width="100%" bgcolor="#99ffcc" cellspacing="0" cellpadding="4"> <tr> <td align="center"> <div align="left"> <a href="index.html"><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong> HOME</strong></font></a><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong> &#8226; <a href="articlesindex.html">ARTICLES</a> &#8226; <a href="books.html">BOOKS</a> &#8226; <a href="teflon.html"> THE </a><a href="teflon.html">TEFLON</a><a href="teflon.html"> REPORT</a> &#8226; <a href="mailto:letters@onlinecolumnist.com"> REACTIONS</a> &#8226; <a href="aboutdiscobolos.html">ABOUT DISCOBOLOS</a></strong></font></div> </td> </tr> </table> </td> </tr> </table> </td> </tr> <tr height="1"> <td width="116" height="2574" rowspan="2" valign="top" align="left" xpos="0"><img height="172" width="111" src="images/johninframe3.jpg"></td> <td width="489" height="1" colspan="3"></td> <td width="18" height="2574" rowspan="2"></td> <td width="1" height="1"><spacer type="block" width="1" height="1"></td> </tr> <tr height="2573"> <td width="489" height="2573" colspan="3" align="left" xpos="116" content valign="top" csheight="2573"> <font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="5"><b> <br /> <br /> Insurance Industry Squirms</b></font><p><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"><b> by John M. Curtis<br> (310) 204-8700</b><br> </font></p> <p><font size="2" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"><i>Copyright Oct. 12, 2009<br> All Rights Reserved.</i></font></p> <p><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span> <span class="style1">M</span>ounting frontal assault on the President Barack Obama s health care bill, the insurance industry warned about driving up premiums for those with private or employee-based health coverage.<span style="mso-spacerun: yes">&nbsp; </span>Insurance industry lobbyists, with their minions in Congress, oppose national health care, fearing that a qualified government plan would take money from the insurance industry.<span style="mso-spacerun: yes">&nbsp; </span>Warning about rising premiums, the insurance industry s top lobbyist Karen Ignagni, president of America s Health Insurance Plans, threatened to launch attack ads, the same approach that torpedoed former President Bill Clinton and First Lady Hillary Rodham Clinton s plan in 1993.<span style="mso-spacerun: yes">&nbsp; </span>Barack s health national reform hasn t taken into consideration the potential hit to insurance industry s earnings.<span style="mso-spacerun: yes">&nbsp; </span>Given the industry s relationship to Wall Street, the White House should have considered potential unrecoverable losses.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>White House officials, and those in Congress more closely tied to health reform, should try to reassure the insurance lobby that they won t let the health insurance industry hemorrhage without some type of compensation.<span style="mso-spacerun: yes">&nbsp; </span>If restructuring health care takes profits away from the insurance industry, then the White House and Congress need to address the inequity.<span style="mso-spacerun: yes">&nbsp; </span>It s not enough to blast the insurance industry for piracy when other profit-driven industries receive bailouts.<span style="mso-spacerun: yes">&nbsp; </span>If the government sees fit to bailout the banking industry or commercial lines brokers like AIG, they can do the same from the health insurance industry.<span style="mso-spacerun: yes">&nbsp; </span>While recognizing the necessity of insurance reform, no one industry should pay a heavier price to achieve the health care overhaul.<span style="mso-spacerun: yes">&nbsp; </span>On Tuesday Oct. 13, the Senate Finance Committee is scheduled to vote on Sen. Max Baucus (D-Mt.) $829 billion, 10-year heath care plan.<span style="mso-spacerun: yes">&nbsp;&nbsp;&nbsp; </span> </p> <p class="MsoNormal"> <span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span><span style="mso-spacerun: yes">&nbsp;</span>Baucus plan, which includes much of what President Barack Obma seeks in health care legislation, attempts to deal with runaway health care costs and growing numbers without insurance.<span style="mso-spacerun: yes">&nbsp; </span>Most Republicans oppose a so-called  public option, where the government, like Medicare, pays directly to reimburse providers.<span style="mso-spacerun: yes">&nbsp; </span>Baucus plan falls short of public financing, instead funding nonprofit insurance coops to pay health care benefits.<span style="mso-spacerun: yes">&nbsp; </span> We ve got ourselves a real health care shooting war now, said Robert Leszwski, a former health insurance executive turned consultant.<span style="mso-spacerun: yes">&nbsp; </span>Leszewski worries that the train may leave the station before the health insurance industry accepts expected changes to health care reform.<span style="mso-spacerun: yes">&nbsp; </span> The industry has come to the conclusion that the way things are going in Congress, we ll have a . . . formula that will be disastrous for their business, so they can t stand on the sidelines any longer. </p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Insurance industry executives worry that proposed changes banning the industry from excluding  preexisting conditions or altogether blackballing patients with certain costly diagnoses will erode industry profits.<span style="mso-spacerun: yes">&nbsp; </span> The misleading and harmful claims made by the profit-driven insurance companies are politicking for corporate gain at its worst, said Sen. Jay Rockefeller (D-W.Va.), rejecting industry objections to health reform<span style="mso-spacerun: yes">&nbsp;&nbsp; </span>Whether admitted to or not, Rockefeller must acknowledge that if Congress dictates terms-and-conditions to the insurance industry, they won t preserve profit-margins.<span style="mso-spacerun: yes">&nbsp; </span>Many industry practices are designed to reduce risk to insurers.<span style="mso-spacerun: yes">&nbsp; </span> Premiums, exclusions, ratings, deductibles, co-payments and waiting periods are all designed to lessen industry exposure to taking on health insurance contracts.<span style="mso-spacerun: yes">&nbsp; </span>Governmnet restrictions or limitations on any or all of those parameters reduce profits.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Industry lobbyists worry that Congress will exclude insurers from jacking-up premiums, increases reduce insurers corporate liability.<span style="mso-spacerun: yes">&nbsp;&nbsp; </span>An insurance industry-commissioned study by PricewaterhouseCoopers warns about rising heath care costs stemming from health care reform.<span style="mso-spacerun: yes">&nbsp; </span>Given changes to existing insurance laws, Congressionally-approved changes would affect the industry s bottom line.<span style="mso-spacerun: yes">&nbsp; </span>What the industry really fears are Congressionally mandated restriction on increasing premiums on existing insurance contracts beyond expected cost-of-living adjustments.<span style="mso-spacerun: yes">&nbsp; </span>PricewaterhouseCoopers estimates that family premiums could go up by $1,700 or individuals by $600 by 2013.<span style="mso-spacerun: yes">&nbsp; </span>Industry spokeswoman Ignagni warns that without nearly 100% participation in the new health plan, the plan won t generate enough premiums to pay for admittedly hefty benefits.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Whether or not the Finance Committee passes the Baucus plan tomorrow, the Congress will have to address potential devastating losses to insurance industry profits.<span style="mso-spacerun: yes">&nbsp; </span>Allowing the insurance industry to market government plans or providing insurers some type of bailout for expected losses, the Congress has more work to do to satisfy the insurance industry.<span style="mso-spacerun: yes">&nbsp; </span>Given that Wall Street calls the shots, the Congress can t expect one industry to bear the brunt of health care reform.<span style="mso-spacerun: yes">&nbsp; </span>Whether popular or not, the insurance industry must have a way of assuring profits or face a meltdown in share prices.<span style="mso-spacerun: yes">&nbsp; </span>There s no point to passing any health care reform if it harms one industry at the expense of the overall economy.<span style="mso-spacerun: yes">&nbsp; </span> Whether or not PricewaterhouseCoopers exaggerated problems with health care reform, the Congress must do what s necessary to reassure the insurance industry. </p> <p><span style="mso-tab-count:1">&nbsp;&nbsp;</span><b>John M. Curtis</b> writes politically neutral commentary analyzing spin in national and global news.&nbsp; He's editor of OnlineColumnist.com and author of <a href="books.html">Dodging The Bullet </a>and <a href="books.html">Operation Charisma.</a></p> </td> <td width="1" height="2573"><spacer type="block" width="1" height="2573"></td> </tr> <tr height="1" cntrlrow> <td width="116" height="1"><spacer type="block" width="116" height="1"></td> <td width="24" height="1"><spacer type="block" width="24" height="1"></td> <td width="182" height="1"><spacer type="block" width="182" height="1"></td> <td width="283" height="1"><spacer type="block" width="283" height="1"></td> <td width="18" height="1"><spacer type="block" width="18" height="1"></td> <td width="1" height="1"></td> </tr> </table> <table border="0" cellpadding="0" cellspacing="2" width="597"> <tr> <td><font size="1" face="Arial,Geneva,Helvetica"> <hr noshade size="1"> </font><a href="index.html"><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong> Homene.net" target="_blank">img height="30" width="138" src="images/cmelogoANIM.gif" border="0" align="absmiddle"></a></font></p> </div> <p><font size="2" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular">&copy;1999-2002 <a href="aboutdiscobolos.html">Discobolos Consulting Services, Inc.</a><br> (310) 204-8300<br> All Rights Reserved. </font></td> </tr> </table> </center> </body> </html>