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Former Insurance Exec Speaks Out on Health Reform

August 20, 2009 at 12:00 AM EDT
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Until last year, Wendell Potter worked for both Cigna and Humana health care for two decades. He's now a senior fellow on health care with the Center for Media and Democracy, a liberal research group. He speaks to Gwen Ifill as part of an ongoing series of conversations on health care reform.

JIM LEHRER: The debate over the public plan as part of health care reform is next. A leading Republican who has been part of Senate negotiations, Chuck Grassley of Iowa, said he believes the scope of a health care bill should be scaled back.

But during today’s radio interview, President Obama said he still supports a public plan. He also said that prior comments by Health Secretary Kathleen Sebelius did not mean he had a change of heart. Here’s some of what he said about the public plan.

U.S. PRESIDENT BARACK OBAMA: What we’ve said is we think that’s a good idea, but we haven’t said that that’s the only aspect of health insurance. And what she essentially said was, is that all these other insurance reforms are just as important as the public option.

The press got a little excited, and some folks on the left got a little excited about this. Our position hasn’t changed. We think that the key is cost control, competition, making sure that people have good, quality options. If we’re able to achieve that, that’s the end that we’re seeking. And the means, you know, we can have some good arguments about what the best way to achieve it is, but we’ve got to change, because the status quo is unsustainable.

JIM LEHRER: The president later said he would pass a bill without Republican support in the Senate, if it becomes necessary.

And that brings us to the latest in our series of conversations about players and thinkers about health care reform. Gwen Ifill has tonight’s, which also looks at the public plan. It was taped before the president’s latest comments.

GWEN IFILL: In our last conversation, we heard from the CEO of the Aetna insurance company. Tonight we get a very different perspective from a former health insurance executive.

Until last year, Wendell Potter worked for both Cigna and Humana health care for two decades, most recently as Cigna’s chief spokesman. He’s now a senior fellow on health care with the Center for Media and Democracy, a liberal research group.

Welcome, Mr. Potter.

WENDELL POTTER, Center for Media and Democracy: Thank you very much.

GWEN IFILL: When it comes to this debate we’re having in Washington about the public option, the so-called publicly backed insurance option, how essential or negotiable do you think that option is?

Comprehensive reform is essential

WENDELL POTTER: I think it's very, very essential. I don't think that reform will be as comprehensive as the president promised during the campaign and as most members of Congress and I think the American public would want it to be. It's a vital part of health care reform, and I trust it will be a part of the legislation that finally reaches the president's desk.

GWEN IFILL: But you heard what the secretary of health and human services said and even what the president has said, which it is essential, but only a sliver of the idea.

WENDELL POTTER: Well, it's essential. And they are right, obviously, that there is much more to reform than just the public option. There needs to be an effort to address health care costs. There's no doubt that's true. And, also, a lot of insurance market reform is necessary, as well. There are a lot of practices in the industry that should be made illegal.

GWEN IFILL: Ron Williams of Aetna told us on the program that there are already changes being proposed in the individual market that will solve a lot of problems that we see in the health insurance industry. Do you agree with that?

WENDELL POTTER: I don't really agree, because, as you noted, I've been with the industry for almost 20 years, and I saw Mr. Williams, and I noted he said that he and the industry are in favor of doing away with the pre-existing condition clauses as a condition of insurance, and also the effort, the practice of cherry-picking only the healthy members for their health plans or healthy people.

They were saying the same thing in 1993, the last time we had this debate. So what they said then is almost precisely what they're saying now, almost verbatim.

And when health care reform failed in '94 -- for a large reason because of the opposition from the health insurance industry -- the industry made no effort to try to get Congress to pass the legislation that would do the things they said back then and they're saying now that should be done to regulate the marketplace more.

Insurance industry has bad a record

GWEN IFILL: So you don't see any difference between their role in 1993 and 1994 than you see now?

WENDELL POTTER: I don't, because some of the same people who are in the industry now, where they're now testifying before Congress, and, again, saying largely the same thing.

So I don't think that the industry has a good track record at all of living up to the commitments it says it is making, and I think over the course of the last 16 years, we've seen that. They have focused on things that would help them improve their profitability, not for the benefit of consumers.

GWEN IFILL: When it comes to the public option, how does the government -- how can the government be a player, that is to say, part of the choices that are offered, many of the choices offered to consumers, and also a referee, a regulator?

WENDELL POTTER: Well, the legislation would have to make it clear that they're not the same, and you can have them separated. In fact, the president has said that that would be the case. The industry is trying to confuse the issue by saying that it wouldn't be, but you definitely can have a public option that would be operated separately from a regulatory agency.

GWEN IFILL: What about their argument that it would drive insurers out of business or at the very least put them at a competitive disadvantage?

WENDELL POTTER: Well, you know, as the president said, they're trying to have it both ways. They're saying, on the one hand, that the government could not be an efficient and good competitor, and on the other that it would force them out of business. It makes no sense.

It would not force them out of business. What it might do is provide some kind of a counter to the Wall Street investors and the constant pressure from Wall Street for them to increase their profitability, but it wouldn't put them out of business.

Over the two decades that I was in the industry, I saw the companies change their business models and the kinds of policies they're offering many, many times. Cigna and Aetna both, as a matter of fact, when I joined Cigna in 1993, were both multi-line insurance companies, with a lot of different kinds of businesses, like property and casualty, and a financial services division. Both of them had those businesses.

They've sold both of those to focus on health care, so they've adapted to market circumstances very, very quickly, and the one thing they know how to do is to make money and to satisfy Wall Street investors.

GWEN IFILL: When you were in the industry, did you speak up about these deficiencies which you're now out talking about?

High-deductible plans in the future

WENDELL POTTER: Not as much as I wish I could say right now that I did. When you're working within an organization like that, it's very important to support the leadership and to support what the companies' objectives are.

Now, as part of the public policy team at Cigna, I was often a voice that was different from the others on the team, because I have long felt that there needs to be more attention paid to making sure that people who don't have coverage do have coverage.

And I became increasingly concerned about the kinds of policies that more recently the insurance industry is moving toward and moving more of us into, by the way, away from the plans that we have been enrolled in for the last several years into plans that some of us have never heard of, but that's the future.

These high-deductible plans that the industry calls "consumer-directed plans" are what the industry has in store for us, and that means that more and more of us will have to pay a lot more out of our own pockets before any insurance that we have kicks in to cover our medical expenses.

GWEN IFILL: as you know, the Obama administration has now fallen back on a mantra which they use to say they had not ruled out the public option, but that they are in favor of choice and competition. What's wrong with that? Would you prefer to see them just say, "I want universal, mandated health insurance," or would you prefer for them to -- or is it wise for them to keep all of these possible doors open?

WENDELL POTTER: Well, it's very important that we have universal coverage, number one. A public option is one of the best ways, probably the best thing that's on the table, the best means on the table to help assure that.

Just mandating that we all have coverage is not good policy. In fact, during the campaign, candidate Obama said that he very much was supporting a public insurance option and was not in favor of an individual mandate or requiring that all of us get insurance, for the reason -- and the reason he cited is a very good one, that a lot of people who are not insured, most of them, as a matter of fact, are not insured because they can't afford the premiums that private insurers are charging.

And to implement a mandate that would require all of us to get insurance from the private market doesn't make any sense. The only way it would work would be for taxpayers to subsidize, to provide subsidies to people who can't afford those premiums. So what you would have would be my tax dollars and yours going to these private health insurers and ultimately to shareholders.

GWEN IFILL: Wendell Potter of the Center for Media and Democracy, thank you very much for giving us your side.


JIM LEHRER: We'll have more health care conversations next week.