Former Insurance Exec Says Industry Behind Town Hall Disruptions

Wendell Potter on Rachel Maddow Show

Whistleblower: Insurance firms ‘very much’ behind town hall disruptions

The health insurance companies ‘are very much behind the town hall disruptions that you see and a lot of the deception that’s going on in terms of disinformation that many Americans, apparently, are believing.’ — Wendell Potter, former insurance executive.

By David Edwards and Daniel Tencer / August 11, 2009

Health insurance companies deserve “a great deal of the blame” for the sometimes violent disruptions to town hall meetings on health care, says a former health insurance company executive turned whistleblower.

Wendell Potter, a former executive with health insurer Cigna who now works as the senior fellow on health care at the Center for Media and Democracy, told MSNBC’s Rachel Maddow that health insurance companies “are very much behind the town hall disruptions that you see and a lot of the deception that’s going on in terms of disinformation that many Americans, apparently, are believing.”

On her show Monday night, Maddow cited statistics from the Securities and Exchange Commission showing that profits at the U.S.’s ten largest health insurance companies skyrocketed more than 400 percent between 2000 and 2007, from $2.4 billion in 2000 to $12.7 billion in 2007.

“Apparently while they quadrupled their profits, the number of Americans without health insurance grew by 19 percent,” Maddow said.

And she also pointed out that the average total take-home pay for the CEOs of those health insurance companies was $11.9 million each, per year, “while the number of Americans without health insurance, for whom a burst appendix can mean bankruptcy, has gone through the roof.”

Asked why health care costs are going up, Potter told Maddow: “Since 1983… the amount of money that insurance companies take in in premiums — less and less of that is going to pay medical claims.”

Potter said that the money health insurers spend on health care for their policy-holders has dropped from 95 percent of revenue to around 80 percent. Although Potter did not elaborate on why that is, presumably it has to do with higher bureaucratic costs, increased advertising budgets, other tangential activities not directly related to health care — and higher profit margins.

“Another thing is they kick people off the rolls when they do get sick or injured,” Potter said. “Also, they’re paying fewer claims.”

Potter suggested that health insurers’ fears of a public health alternative are unfounded, because they can still make money with a public plan in place.

“They could [turn a profit], absolutely. I’ve seen the health insurance industry change its business models many times. The insurance companies who operate now are very different from the companies that operated a few years ago and the one thing they know how to do is make money.”

Source / the raw story

The Rag Blog

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6 Responses to Former Insurance Exec Says Industry Behind Town Hall Disruptions

  1. masterspork says:

    Or it could be this;

    Democrats have a senior citizen problem.

    Frustrated older Americans are packing the town halls on health care. They are incredibly passionate about their Medicare benefits. Polls show senior citizens largely disapprove of health care reform ideas so far.

    And of course, they vote — in larger numbers than any other demographic.


  2. Again, a good article. It’s too bad they call it the health-care INDUSTRY, and not a health-care SERVICE – one that’s not for profit, and if the top CEO at ANY INSURANCE COMPANY makes MORE THAN THE PRESIDENT OF THE UNITED STATES, it should be immediately put to an end.

    One should NEVER TRUST ANY INSURANCE COMPANY – health-care; home, car, life, disability.

    It took me over a year to get my claim settled from a car accident and my ATTORNEY got 33% of that claim for doing little but passing on information that I GOT FROM MY DOCTOR, and passed to him. In fact, he said I did such a good job, that when I had recovered he wanted me to come work for his firm. How about that; nearly get myself killed – handle 70% of the paperwork, and wind up with a job offer…….

    The Mafia learned how to get ‘paid for protection’; it just became legal when they turned it into an industry, and made it ‘legal’!!!

  3. Anonymous says:

    Maddow, now there’s a good source. She’s a really unbiased party – very, very credible. Perhaps she should research those evil CEO salaries she quotes. Even the AFL-CIO’s CEO salary database disagrees with her. Oh, and those huge profits, go to Yahoo finance and run the income reports – seems Maddow is spinning (dare I say lie?) like a top. WHY? Because Axelrod sent out a memo to the ‘trusted’ ones that said to change the focus to attack the insurance industry. It goes on to say: “be sure to make claims that they pull the plug on their insured when they get sick”. Perhaps before sending this out, he should read some actual health insurance contracts. Every one I have seen has a no cancellation clause that prohibits that.

    And we are supposed to believe this turncoat ‘informant’? Yes, I’m sure all his old buddies on the inside are giving him the dirt to use against them. His credibility is less than zero. Unfortunate for him several real news services (not FOX) have looked into these ‘insurance minion’ charges and found them false. What is true however, is that they found the unions and ACORN have been bussing in ‘pro’ people from the inner cities into the bedroom communities. They have also been cranking out ‘pro’ healthcare signs (with the proud Union label). These pawns don’t even know what it is they are supporting. What a bunch of sheep.

    Obaaaaama Obaaaaama

  4. dospesentas says:

    Happy; let’s break it down: There’s a difference between the CEO and President. One is paid with taxes. This is an analogy of the value (or detrement) of a “profit driven” system vs. one “by the people”.

    Let’s keep in mind there’s an agenda by both camps. In a true free market economy, goods and services are subject to supply and demand. It’s possible to skew these relationships to some degree, however the act is usually detremental. Look at SUPPLY- there’s a finite amount of healthcare capacity. Then DEMAND- there’s virtually an infinite amount of demand for that capacity driven by the human condition. That means rationing, by: 1) ability to pay or 2) bureacratic rule. This is a fact.

    I guess my personal belief, having worked with small business, large corporations and all three branches of government is: If you want to get things done; GREED trumps the typical mediocre bureacracy. But we distain greed even though it has benefit, don’t we? But then let’s not forget the quest for influence, power, votes, etc. Perhaps there lies the true debate. People are human, they do human things, they have done these same things for a long time: war, love, murder, honor, theft, trust, envy, etc. etc. We can’t change that, but perhaps we can understand it and use it to make better decisions.

    You had a bad experience that eroded your trust, but I like the end of your story best.

  5. Anonymous says:

    I just noticed something funny.

    Maddow claims: “profits at the U.S.’s ten largest health insurance companies skyrocketed more than 400 percent between 2000 and 2007, from $2.4 billion in 2000 to $12.7 billion in 2007.”

    But in another article on this blog: ‘Barack, Health Insurance, and Your Best Interests’ by Bruce Dixon he says: “With the revenues of insurance companies on the decline, individual mandate programs are a welcome bailout for the private insurance industry.”

    Which is it?

    This makes my case: Don’t buy into any of the propaganda. Find out the facts and use your common sense.

  6. I’ve also pondered that ‘individual MANDATE’ – when there are religious groups who do NOT beieve in modern medicine; when there are many who chose ALTERNATIVE MEDICINES/HERBS/HEALTH-CARE, and wouldn’t take a pill if you gave it to them for free, I find that a MANDATE does infringe upon the rights of people to actually CHOOSE their course of treatment for an illness or injury, and it’s not always going to be abiding by the recommendations of a doctor; a hospital – or any type of medical facility that is largely accepted by the masses.

    My grandmother was a believer in ‘heal thyself’ – yes, she suffered terrible pain and illness, because she simply would not consider anything but what she felt was HER RIGHT to deal with her illnesses ‘her way’.

    While I’m not like my grandmother, I do refrain from seeking medical help for every little ‘ping or pang’, because a measure of what I see to be true about the healing powers of the body; healing powers of proper diet – certain herbs, and a sound MIND that can truly demonstrate the ‘mind over matter’, when allowed to do so (and I have my own personal experiences to verify it for myself), then I really do NOT TRUST A MANDATE.

    Yes, I think there’s $$$$ to be had by doing so – it will SERVE THE HEALT-CARE INDUSTRY in the LONGER TERM, but then there are way too many who would have to sacrifice their personal beliefs; their religious beliefs, and I don’t want to personally see that happen.

    I’ve had excellent health EXCEPT for direct INJURY to my body; this has caused me to use the services of a doctor; a nurse – go through tests, and enjoy the wonderful care that a number of hospitals have given me.

    I’m forever grateful for the CHOICE; for the SERVICE, but I still want to be able to CHOOSE what is right for me.

    We can find historical evidence of how ‘man’ has used a variety of potions; herbs, foods, meditation, to aid in their comfort and well-being.

    I’m not advocating going back to the ‘cave-man’ condition, but likewise, I do not want my body to become the property of a MANDATE, that sets a course of treatment I don’t fully understand or agree with.

    I have chosen my health-care up until now; I think that should be the right of everyone who lives on this planet.

    I will chose NEVER TO HAVE FLU SHOTS (as an example), and I will avoid any attempts for any organization/entity/government, who decides they know what is best for me.

    In 2002 when I nearly died in a car accident, I had my seat belt ON because my insurance MANDATES that for coverage; as a result, I suffered from painful abrasions when the belt restrained me.

    I also had air bags that were part of the ‘safety features’ of my car, and the air bag FAILED as it burst – it actually created the BRAIN AND HEAD INJURY when the metal mesh smashed into my head and chest.

    The lap safety belt, caused PELVIC AND BLADDER INJURY – all of this in the name of ‘safety and mandates/laws’.

    I’ll never be sure if all these mandates are really to help and aid the ‘victim’, or whether it’s just another aspect of laws that in the process of interfering, create a NEW INDUSTRY that generates REVENUE, and PENALTIES if you don’t abide by those those laws.

    Somehow, I simply will never TRUST that the human being in the USA is being given the best care; the best chance to recover and return to the quality of life they had before accident or illness, and I’ve seen enough proof, that it’s REVENUE/PROFIT-BASED.

    I believe in the ‘right to live’, and also in the ‘right to die’ – it is my body; it doesn’t belong to the state or country in which I live.

    Common sense tells me to remain isolated if I’m sick; not to expose others, and to take all precautions not to inflict any illness I have on others.

    Common sense tells me to operate my vehicle with care; to never endanger another by being careless.

    Strangely, what is called ‘common sense’ is becoming less and less ‘common’……..

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