August 10, 2009: Former Health Insurance Executive: Opposition to Reform Driven by Insurance Industry Profit Motive

Former health insurance executive Wendell Potter (see July 10, 2009), who formerly headed the PR division at Cigna, says that the skyrocketing profits of health care corporations and their executives are directly driving the industry’s opposition to health care reform. According to filings with the Securities and Exchange Commission, the profits of the US’s 10 largest health insurance companies rose 428 percent between 2000 and 2007. In 2000, those 10 companies made a combined profit of $2.4 billion. In 2007, those numbers had risen to $12.9 billion. During that seven-year period, the number of Americans without health insurance rose 19 percent. The CEOs of those 10 firms made an average of $11.9 million in 2007 alone. MSNBC’s Rachel Maddow notes that the health insurance industry “bankrolled efforts to kill the last effort at health care reform” in 1994 (see Mid-January - February 4, 1994). In an interview with Maddow, Potter blames the insurance industry for much of the recent spate of “town hall” disruptions that have helped derail debate over health care reform (see June 30, 2009, July 6, 2009, July 25, 2009, July 27, 2009, July 27, 2009, July 31, 2009, August 1, 2009, August 1, 2009, August 2, 2009, August 3, 2009, August 3, 2009, August 3, 2009, August 3, 2009, August 4, 2009, August 4, 2009, August 5, 2009, August 5, 2009, August 6, 2009, August 6, 2009, August 6-8, 2009, August 8, 2009, and August 10, 2009) “and a lot of the deception that’s going on in terms of disinformation that many Americans apparently are believing.” Potter goes on to note that health insurance firms are making tremendous profits on the steady erosion of paid premiums going to fund medical claims. In 1993, the industry paid out roughly 95 percent of the premiums they took in to claims. In 2007, that number had dropped to 80 percent. Insurance firms also routinely “kick sick people off the rolls when they do get sick or when people get injured.… [A]nd also, they’re paying fewer claims.” The health insurance industry is dead set against the so-called “public option,” Potter says, for the simple reason that a publicly run alternative to private insurance would cost its members profits. [MSNBC, 8/11/2009]