Tuesday, November 10, 2009

How the Blue Dogs Raised My Insurance Premium by 14%

health insurance

Late Saturday night, the House narrowly passed a massive health care reform package. The President called the vote courageous and historic.

And Anthem, the giant insurance company, told us that the expected premium increase for my company's health insurance (we provide insurance for everybody) will be 14%. We got no additional coverage, just higher rates.

This is profound evidence that the insurance industry won the health care debate. The public and taxpayers lost big. There is little chance that something better will come out of the Senate.

The real fight happened a week earlier as the House Democratic caucus counted votes on whether the poorly named "public option" would pay doctors and hospitals the Medicare rate plus 5% or instead would negotiate with providers. With 218 votes required to pass something in the House, the progressive advocates of "Medicare plus" only got to around 180 votes and stalled. So Speaker Pelosi only put up for a vote legislation that simply called for negotiated rates.

Negotiated is code word for higher. Much higher.

So all across the country, insurance companies are raising their rates NOW. If they are going to negotiate, why not negotiate from a higher base?

I suspect that a poll of companies and those who have to buy insurance on their own would find similar rate increases as the insurance industry once again games a system that it bought in Congress.

The mass media, as usual, did a terrible job explaining why it was that a strong public option - one that reimbursed at Medicare plus 5% - saved money and lowered the deficit when most health care reform opponents were screaming about exploding fiscal deficits. The reason is pretty simple - covering millions of people with a low cost plan is far less expensive than reimbursing private health insurance companies at rates sufficient to cover their bureaucracy, profits, and skyrocketing executive compensation.

Why is it that the supposedly fiscally conservative Blue Dogs successful fought against Medicare plus when it would save huge amounts of public money? Because that money would expose the raw deal we get from private health insurance companies, and nobody has bought the Blue Dogs more times than the insurance industry.

At this stage of the health reform battle, I feel that we won a vote but are losing the war. Opponents of reproductive choice got to leverage a pro-choice President and Speaker into allowing them to hijack health reform. Access to abortion will fall dramatically if this legislation is enacted, and we heard not a single word of opposition from Mr. Obama. The insurance industry will get literally tens of millions of new customers who will be forced to purchase their overpriced product or pay a fine, and they can raise their rates with impunity in the meantime.

Given the rules, we were counting on the House to set a progressive standard on insurance reform. If what passed is the progressive standard, the Senate will be emboldened to make change far worse.

Our notice of a 14% higher premium is just one of many canaries in this collapsing coal mine.