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2009-09-30

Insurance Industry Whistleblower Wendell Potter Blasts Senate Panel Rejection of Public Insurance Option

Guests

Wendell Potter, For twenty years he was a former executive at CIGNA and Humana corporations, among the nation’s largest health insurers. Last year he left his job as head of communications for CIGNA. He is now Senior Fellow on Health Care for the Center for Media and Democracy. Potter testified last month on the health insurance industry at a Senate committee hearing.

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Efforts to create a government-run health insurance plan were dealt a setback Tuesday after the Senate Finance Committee rejected a pair of amendments to create a public option. Both amendments were defeated when a group of Democrats, including Senate Finance Committee Chair Max Baucus, joined with Republicans to oppose the public option. We speak with Wendell Potter, the former chief spokesperson at CIGNA, one of the nation’s largest private insurers, and now one of the health insurance industry’s most prominent whistleblowers. [includes rush transcript]

Transcript

This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: Efforts to create a government-run health insurance plan were dealt a setback Tuesday after the Senate Finance Committee rejected a pair of amendments to create a public option. Both amendments were defeated when a group of Democrats, including Senate Finance Committee Chair Max Baucus, joined with Republicans to oppose the public option. Supporters of the public option say a government plan is needed to help keep private insurance plans honest.

Baucus voted against both amendments, as did Democrats Blanche Lincoln of Arkansas and Kent Conrad of North Dakota. Democratic Senators Bill Nelson of Florida and Tom Carper of Delaware voted against one of the public option amendments but supported the other.

During Tuesday’s debate, committee chair Max Baucus of Montana defended his vote.

    SEN. MAX BAUCUS: As I’ve said before, I see a lot to like in a public option. There’s a lot here. I included, for example, a public option in the white paper that I released last year. And the public option would help to hold insurance companies’ feet to the fire. I don’t think there’s much doubt about that.

    But my first job is to get this bill across the finish line. There’s a lot in this bill that will reform the insurance market. There’s a lot in this bill that will control costs. And there’s a lot in this bill that would expand coverage to millions of Americans. Those things have to be my priority, and thus I’ll have to vote no today on this amendment.

AMY GOODMAN: Senator Max Baucus has been widely criticized for his close ties to the healthcare and insurance industry. The Montana Democrat has collected over $4 million from the healthcare industry throughout his career. His chief health adviser, Elizabeth Fowler, is a former executive for the insurance giant WellPoint. His previous chief health adviser, Michelle Easton, now lobbies for WellPoint.

To talk more about the Senate Finance Committee vote, we’re joined by Wendell Potter, former top executive at CIGNA, one of the nation’s largest for-profit health insurance companies. Up until last year, Wendell Potter served as head of corporate communications at CIGNA and as CIGNA’s chief corporate spokesperson. He also once headed communications at Humana, another large for-profit health insurer. Wendell Potter is now a fellow at the Center for Media and Democracy and has become one of the industry’s most prominent whistleblowers.

Wendell Potter, welcome again to Democracy Now! Your reaction to the Senate Finance Committee vote?

WENDELL POTTER: Well, thank you, Amy.

It was expected. I don’t think many people really expected that the Senate Finance Committee, led by Senator Max Baucus, would report out a bill that included the public option.

But I think the important thing to remember is that this is one of a number of committees that is working on this and reporting out bills and that, by no means, is the final answer on this. I’m very optimistic that the final bill that reaches the President’s desk will include a public option.

AMY GOODMAN: And what exactly do you think is going to accomplish this?

WENDELL POTTER: You know, I think it could happen in a number of different ways. The House legislation, I think, that is ultimately passed by the House will include a strong public option. And I know from talking to many members of Congress that there is very strong support in both the House and the Senate. And the bill that came out of the Senate Health, Education, Labor and Pensions Committee, which had been led by Senator Kennedy and now is being led by Senator Tom Harkin of Iowa, has a very strong public option.

This is the only committee, the Senate Finance Committee, that has rejected it at this point, and it’s the most conservative of the committees. I hope that Senator Baucus will come to realize that he is one of sixty Democrats who can get this bill through Congress and get it through the Senate and that he understands that his responsibility should be to persuade those other members of his party in the Senate that they should vote for this and the reasons why he gave, himself, why it’s important.

AMY GOODMAN: A new poll has come out by NPR, the Kaiser Family Foundation, the Harvard School of Public Health, that finds that, so far, the public feels profoundly shut out of the current overhaul debate. In fact, 71 percent told the Kaiser Family Foundation that Congress is paying too little attention to what people are saying. Relate that, people feeling shut out, with the Finance Committee vote against a public option.

WENDELL POTTER: You know, I think there’s a great correlation. I have been frustrated myself that there’s been very little attention, clearly, paid by Senator Baucus and other members of the committee to what the public really wants. There’s been a consistently strong support for the public option in every single poll that I’ve seen.

And you were mentioning earlier about the people on the senator’s staff who have either worked for previously, or currently, for WellPoint — speaks volumes, I think. I’ve been contacted by a lot of members of Congress, senators and members of the House, and I’ve had a chance to sit down and talk with them about some of the things that I know as a former insider, someone who’s worked twenty years in the industry. Not once have I heard from anyone on Senator Baucus’s team.

AMY GOODMAN: We’re talking to Wendell Potter. For twenty years he was an executive at CIGNA and Humana. Most importantly, in the years at CIGNA, he was their chief corporate spokesperson, but has left to blow the whistle on insurance companies. What about the role, Wendell Potter, of the National Association of Insurance Commissioners playing in the Baucus legislation?

WENDELL POTTER: Well, it’s an inappropriate role. I mean, the NAIC does good work. It comprises state insurance commissioners around the country, and it helps in setting rules. But it is proposing rules. State legislatures have to adopt the regulations that they follow. Giving them the inordinate authority that they have in the Baucus bill is just not appropriate. There needs to be much stronger state and federal regulation.

AMY GOODMAN: Talk about the role of these insurance companies in determining the legislation. You allude to the WellPoint execs working with Max Baucus, he himself getting millions of dollars from the health insurance industry. But exactly how it works? You were at CIGNA. What kind of control do these companies have over these men and women in Congress that they subsidize, that they bankroll?

WENDELL POTTER: You know, in many different ways. Through political action committees, part of my responsibilities — a person on my staff was responsible for administering the public — the political action committee, which doles out money that employees of companies contribute to be used by the company at its discretion to give to candidates and often to incumbents and candidates who have a history or promise to vote the way the company would want it to vote.

Through fundraisers, I, during my time in the industry, participated and paid for some of the members, actually, at luncheons, who are on the Senate Finance Committee, including some of the Democrats. That happens.

Relationships — hiring people who used to work for the senator as lobbyist or having people who have other close ties, including former members of the Congress, the Senate and the House, to do lobbying. It happens in many different ways.

AMY GOODMAN: I want to go back to yesterday’s debate in the Senate Finance Committee. Democratic Senator Charles Schumer, who introduced one of the public option amendments, questioned Republican Senator Chuck Grassley of Iowa over his rejection of government-run health insurance option.

    SEN. CHARLES SCHUMER: I’d just like to know what you think of Medicare, a government-run program that’s far more government-run than what Senator Rockefeller has proposed? Do you think Medicare is a good program? Because most of the amendments on the other side have been aimed at preserving Medicare, a government-run program.

    SEN. CHUCK GRASSLEY: I think that Medicare is part of the social fabric of America, after forty years, just like Social Security is. And I don’t say that because it’s perfect. There’s a lot of things that need to be changed, and a lot of the things in this legislation are changing a lot of things that’s wrong with Medicare. And to say that I support it is not to say that it’s the best system that it can be.

    SEN. CHARLES SCHUMER: But it is a government-run plan, isn’t that right?

    SEN. CHUCK GRASSLEY: It is a government-run plan.

    SEN. CHARLES SCHUMER: Thank you.

    SEN. CHUCK GRASSLEY: And not — and the reason I say it’s part of the social fabric of America is there are private health insurance plans and retirement plans that are connected with Medicare and Social Security, and it’s not easy to undo a Medicare plan without also hurting a lot of private initiatives that are coupled with it. But that does not make it perfect. And I’ll bet, based upon fifty years of experience, if we had to do it over again, we’d do it other ways, even if it were a government-run plan.

AMY GOODMAN: That was Chuck Grassley. Wendell Potter, your response?

WENDELL POTTER: Well, clearly, this senator has the insurance industry’s best interests at heart, not the American public and not his constituents. The Medicare program is, as he said, part of the social fabric of this country and has been for many years. And it is a government-run plan that has meant a great deal of difference to a lot of people in this country, including certainly his constituents.

He has said that he didn’t think a public plan would be fair, compete fairly with insurance companies who — the private insurance industry. I’d like to ask him what is fair about the way that the insurance industries operate today, the companies that dump sick people when they need insurance most. What is fair about the way the insurance industry operates, Senator Grassley?

AMY GOODMAN: Forty-five million new customers, that’s what the private insurance companies can now look forward to, if a bill like what came out of the Senate Finance Committee moves forward with the mandate. Explain how they will make out and how important, how significant, how profitable this is for the for-profit companies.

WENDELL POTTER: Yeah, this is the first time that the insurance industry has really seen great opportunity in healthcare reform, with an individual mandate, which would require all of us to buy insurance if we are not eligible for a public, government-run program, which, fortunately, many people are. We would have to buy it in the private market from insurance companies, many of whom — many of which are for-profit companies. We would not have the option of buying or getting insurance through a government-run program like the public option would create.

So, not only would our premium dollars go into this — into the private insurance industry, but a lot of tax dollars would. Most people who don’t have insurance can’t afford it, and they wouldn’t be able to afford it after healthcare reform is passed without the government subsidizing their premiums. So billions and billions of taxpayers’ dollars will flow right into the treasuries of these big for-profit insurance companies. So we will be essentially paying a tax that will help support these insurance companies. It will be an enormous bailout of the health insurance industry.

AMY GOODMAN: Robert Reich, former secretary under Clinton, wrote, “The White House made a Faustian bargain with Big Pharma and Big Insurance, essentially scuttling both of these profit-squeezing mechanisms in return for [these] industries’ agreement not to oppose healthcare legislation with platoons of lobbyists and millions of dollars [of] TV ads, and Pharma’s willingness to cut drug prices by some $80 billion over the next ten years.” He says, “The White House promised these industries they’d come out way ahead — getting tens of millions of new customers who’d be buying private health insurance policies and thereby paying [for] an almost endless supply of new drugs. Healthcare reform would be, in short, a bonanza.”

Is that why, for example, your companies, Wendell Potter, and the other insurance companies have not launched the kind of massive campaign that they did against the ’93 and ’94 Clinton healthcare reform?

WENDELL POTTER: That’s right. And they have worked very closely with the White House. Some of the executives I know have been to the White House multiple times from the insurance industry. So they’ve been cutting their own deals, undoubtedly, or making their own assurances to the White House.

But the thing that the White House must not be taking into consideration is that while they will say things publicly, that they’re working as good faith partners for the — with the President and with Congress, behind the scenes they’re doing all that they can to cut the heart out of legislation, including the public option, and to preserve what would benefit them. That’s the way they operate. That’s what’s going on here.

AMY GOODMAN: The importance of protest, Wendell Potter? You, as a former spokesperson for CIGNA, you working for the insurance companies — how they feel about folks who go out in the streets, like yesterday here in New York, seventeen people arrested at the New York offices of Aetna, the activists linking arms, chanting “people not profits, Medicare for all”? It’s the group Mobilization for Health Care. Let me play one of the clips from this protest. It’s Mark Milano, who spoke out after the seventeen arrests.

    MARK MILANO: We’re just here because of the many people we know who die because insurance companies put profits before people’s care. The myths about government death panels are a lie. The reality is that the deaths panels are the people who are paid every day to deny care to people. That’s their job. The more people they deny care to, the bigger bonuses they get. We are here to say that we will not rest until every person who needs care in America gets it, and the way to get that care for everyone is Medicare for all.

AMY GOODMAN: Medicare for all, Wendell Potter. Finally, lay out the course you see, after the Senate Finance Committee has just said no to a public option, of a public option, or perhaps — and I’d like your view on this — how you feel about single payer, Medicare for all?

WENDELL POTTER: I think next steps. It is necessary to get a bill out of the Senate Finance Committee, so that the Senate can ultimately vote on a bill. So will the House. And eventually there will be a bill that will go to a conference committee made up of Senate and House members, and they will come up with a bill that I hope will contain a public option, that will be approved by both the House and the Senate and on its way to the President, that will be a strong public option.

With regards to single payer, I think the President made a big blunder. I think he should have said, when he was inaugurated or soon — as soon as this debate began, that — you know, let’s look at what would be the best solution for this country. And why not consider a single-payer system? Let’s have that debate in Congress. It may not wind up that that is what this Congress enacts, but that debate should have happened. It will happen ultimately. And I think these protests are an important thing in our country. I think it will eventually take a social movement to get the kind of healthcare that we need in this country — healthcare reform.

AMY GOODMAN: Wendell Potter, thank you very much for being with us, former executive at CIGNA and Humana corporations. He was the chief corporate spokesperson for CIGNA. Now he’s a senior fellow on healthcare for the Center for Media and Democracy, joining us from Philadelphia. Thanks so much.

WENDELL POTTER: Thank you.

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