On Tuesday, during an interview with AHIP’s Robert Zirkelbach, David Shuster suggested that private insurers opposed the public health insurance option because “the for profit insurance companies are terrified that if there is a public option that competes with what you do, people are going to leave the insurance companies and go to the government plan and people are going to lose profits.”

Without contesting Shuster’s characterization, Zirkelbach argued that a public option would underpay medical providers and put some doctors and hospitals out of business. “The way a government plan would save money,” Zirkelback explained, “is that they would simply dictate the prices that they pay for services. Right now, Medicare only reimburses hospitals about 85% of their cost. It’s employees and families that are paying $1500 a year to subsidize the Medicare program. ”

Watch it:

Most insurers, however, tee their payment rates for physicians off Medicare reimbursement rates. Medicare’s physician fee rates are based on the relative cost of providing services determined something called the Resource-Based Relative Value Scale (RBRVS). A panel of medical doctors, through the American Medical Association, updates the relative work values every five years based on: the time it takes to perform the service, the technical skill and physical effort, the required mental effort and judgment, stress due to the potential risk to the patient, malpractice rates in the area, and other geographic adjustments to reflect cost variation before coming up with a number. The process is also open to public comment and private health insurers — along with anyone else — have an opportunity to weigh in on the process and the rates

Zirkelbach’s explanation for why a new public option (which would pay Medicare-like rates) would shift costs to Americans with private insurance is similarly disingenuous. He assumes that private plans are always right in setting reimbursement rates. According to MedPAC, however, Medicare rates are adequate and consistent with the efficient delivery of services. In fact, over-payments by private insurers to health-care providers drives up overall costs. “Hospitals which didn’t rely on high payment rates from private insurers ‘are able, in fact, to control their costs and reduce their costs when they need to’ and ‘combine low costs with quality.’

Transcript: Read more

Our guest blogger is Emma Sandoe, Health Policy Intern at the Center for American Progress

In recent weeks, the Obama administration has refocused its campaign on current insurance market practices as the cause of rising costs.

Attempting to shift the blame to doctors’ fees, Karen Ignagni and America’s Health Insurance Plans (AHIP) released a report yesterday on out-of-network physician billing. “No politician has asked how much is being charged,” Ignagni said. HR 3200 requires disclosure on out-of-network costs, reduces overpayments, and changes Medicare payment rates to doctors and hospitals.

The study compared out-of-network billing rates to Medicare rates. Out-of-network physicians are free to charge non-negotiated, often times higher rates. The study attempts to show the arbitrary nature of procedure pricing or as Dr. Uwe Reinhardt calls it, “lunacy”:

“Some out-of-network providers are charging exorbitant prices – several hundred or even over a thousand percent of the Medicare reimbursement for the same service in the same area. Recent examples: … $40,000 for a total hip replacement when Medicare would have paid $1,558.”

While physician fees are a part of the cost problem, this study does not show the role of private insurers in the billing process and fails to address in-network private insurance billing rates, which make up over 90% of claims. Including these lower in-network rates would undoubtedly prove that a vast majority of billing rates are lower than the excessive out-of-network rates.

Moreover, the procedures by the insurance industry are not comparable across Medicare and private insurers. Procedures such as hip replacement, coronary bypass, and cataract surgery are more common in the +65 year old population and oftentimes involve more expensive conditions in younger patients.

Highlighting Medicare as a comparison is deliberative. Back on the offensive, AHIP is resorting to their previous cost shift argument that the government reimburses too low forcing insurers to pick up the cost.

The August Town Halls have buried any meaningful coverage of the health care debate. Groups like Freedomworks and Americans For Prosperity are generating wild rumors about the proposed health care reform and the overwhelming majority of media coverage has merely contrasted protesters’ claims with administration retorts, while failing to correct the record. The format creates the illusion of balance and, by giving equal time to a false claim, pads disingenuous arguments.

Fortunately, this report from NPR’s Sarah Varney is a respite from the norm. Rather than reprinting the claim that Canadian health care system indiscriminately rations care, Varney actually examines the Canadian health care system and concludes that it’s getting a “bum rap.” Just like Medicare beneficiaries who protest against “government health care,” protesters who use Canadian care as an example of “government interference” or rationing, will be surprised to learn that the Canadian health care system relies on both government and private insurers to provide Canadians with comprehensive coverage:

Canada has a universal health care system that’s paid for through income taxes and sales tax. All Canadians are covered, and they can see any doctor they want anywhere in the country with no copays or deductibles….And while the individual provinces and territories set their overall health budgets and administer the health plans, the delivery of medical care is private. Doctors run their own businesses and then bill the government.

As it turns out, the system works fairly well:

- Physicians in Canada earn a good living and aren’t faced with the same administrative hassles that American doctors gripe about.

- The Commonwealth Fund looked at deaths that could have been prevented with access to quality medical care in the leading 19 industrialized countries. In the latest survey, the United States ranked last and Canada came in sixth.

- When federal spending on Canadian health care declined during a recession in the 1990s, lines for non-urgent procedures — and some urgent ones — grew. In response, Canada’s government poured billions of dollars into reducing wait times in the five medical areas deemed most troublesome, including cancer care, cardiac care and joint replacement surgery. And wait times for these services has dropped: Most provinces now report those times on publicly available Web sites.

- Few Canadians go south for medical care. Canadian researchers say it’s a bit like getting struck by lighting — it’s extremely rare, but when it happens, everyone talks about it.

- Public opinion polls continue to show strong support for publicly financed, universal health care in Canada.

Varney contradicts the oft-repeated claim that Canadians can’t purchase health insurance coverage by writing that many Canadians purchase private coverage for “optometry, dentistry and outpatient prescription drugs” — services the public plan does not cover. Yet at the end of the piece, she quotes a pollster who notes that the Canadian health care system “‘is not something that everybody is completely satisfied with or complacent about.’ About half of Canadians say they would like the option to buy a private health insurance plan. Currently, that’s not allowed.”

Canadians can purchase supplemental private coverage for services that are not covered by the public plan, but cannot purchase private insurance for basic services. As CBC News points out, private health insurance is “a crucial part of the system,” and Canadians spent about $43.2 billion on private coverage in 2005. Private insurance covers “anything beyond what the public system will pay for. For instance, should you have to spend some time in the hospital, the public system will cover the cost of your bed in a ward, which usually has three other patients. If you want a private room, the extra charge will come out of your pocket, unless you have extended health coverage either through your employer or through a policy you have bought yourself.”

Basic services are covered by the government precisely because the large risk pools allow the government to negotiate cheaper rates with providers and control health care costs. The government fears, with good reason, that if Canadians can leave the purchasing pools, the government’s market power would diminish.

In a self-congratulatory “EXCLUSIVE,” the Washington Times reports that a letter from the United States Commission on Civil Rights “says some little-noticed provisions in the House health care bill are racially discriminatory, and it intends to ask President Obama and Congress to rewrite sections that factor in race when awarding billions in contracts, scholarships and grants,”  but this “exclusive” buries the lede.  In truth, the only real news in the Washington Times story is hidden in just one paragraph:

The commission approved the draft language by a vote of 4-2, with two abstentions. Two Republicans and two independents voted for it, two Democrats voted against it, and two Republicans abstained. The letter needs to be approved again before being sent.

Once upon a time, the Commission played an essential role in enacting landmark civil rights legislation, visiting communities ravaged by segregation and Jim Crow to document widespread discrimination.  Today, however, it is little more than a dumping ground for opponents of civil rights from right-wing policy shops.

Although only four of the Commission’s eight members are presidential appointees chosen by George W. Bush, three quarters of its membership is controlled by the far right.  Indeed, the Commission’s two “independent” members–both chosen by Republicans in Congress–may be its most ideologically conservative.  They include Todd Gaziano, director of the right-wing Heritage Foundation’s legal policy shop, and Gail Hariot, who co-chairs one of the right-wing Federalist Society’s practice groups and who spearheaded the effort to pass California’s Proposition 209, a far-reaching ban on race-conscious laws in California.

And Gaziano and Hariot are hardly the only representatives from the right-wing policy community.  The Commission’s Bush-appointed Vice-Chair is Abigail Thernstrom, a leading opponent of civil rights laws who is a “scholar” with the American Enterprise Institute, a former Senior Fellow with the Manhattan Institute, and who serves on the board of the Institute for Justice, a radical libertarian law firm.  The Commission’s Staff Director, it’s most senior full-time staffer, is Martin Dannenfelser, a former vice-president with the Family Research Council–a virulently anti-gay organization which once claimed that gay men and lesbians view “pedophiles as the ‘prophets’ of a new sexual order.”

So the Washington Times’ big “exclusive” is that senior staffers at right-wing think tanks oppose health care reform.  Maybe next week, they’ll notice that the sky is blue.

Last Thursday, Mike Sola, whose son has cerebral palsy, disrupted a town hall meeting with Rep. John Dingell (D-MI) by wheeling his son up to Dingell and verbally attacking the Congressman for supporting a bill that would give “no care whatsoever” to Americans with “cerebral palsy.” This morning on Fox News Channel’s America’s Newsroom, Sola suggested that he became concerned about how health care reform would affect his son after reading a New York Post article by Betsy McCaughey — a fiction writer with a knack for passing up her work as truth:

This is a free country. I’m a parent of a handicapped American citizen and the reason I”m so concerned is this. Every American should pull this up on their computer. It’s the New York Post. July 24th edition. ‘Dangerous Doctors’ every American needs to read this and you’ll understand that this ground swell of America’s people has occurred…What you are doing is sentencing our families to death. We lose the right to life. The old people are discarded. Those who cannot fend for themselves are discarded. There is no liberty under you plan, and that’s the problem. The people have seen it, the people know it, you can’t hind it from the American people anymore.

Watch it:

McCaughey’s article argues that health care reform would empower political appointees to deny care to “a grandmother with Parkinson’s or a child with cerebral palsy.” And while anchor Megyn Kelly tried to claim that many of McCaughey’s predictions have “come true,” this latest claim is as false as the rest of McCaughey’s charges.

In reality, rather than empowering political appointees with the ability to make medical decisions, all of the health bills improve care for Americans with disabilities. The legislation in the House, expands Medicaid — the government program designed to meet the unique health care needs of Americans with disabilities — creates an insurance program for long-term care, provides affordability credits to help all Americans purchase health insurance coverage, outlaws the common insurance practice of denying coverage to Americans with chronic conditions and caps the amount Americans have to spend on care. During mark-up of the bill in House Energy and Commerce, the Committee also added provisions to prohibit the secretary of Health and Human Services from reducing adult day care funding and funded a pilot program for home health care specifically for individuals with chronic conditions.

Sola’s use of McCaughey’s article, however, suggests that fact checks do little to blunt the emotional impact of sensationalistic charges. Corporate funded groups like Freedomworks and Americans for Prosperity, along with Betsy McCaughey, Sally Pipes, Rick Scott, Sarah Palin, and Newt Gingrich distort and lie about reform in order to manufacture outrage among Americans. That effort is scaring some and stymieing legitimate efforts for constituents to have real conversations about how best to reform the health care system.

Yesterday, the Washington Post reported that the Senate Finance Committee was considering replacing the public health insurance option with “a network of co-ops.” Proponents believe that a truly consumer-drive health plan that elects a board of directors and hires a CEO could reduce costs for its members and champion delivery system innovations that improve care quality and efficiency.

But experience tells a different story. In reality, co-ops have a hard time attracting enrollees. Small businesses or individuals enroll in co-ops because they “offer substantial choice among well-known health plans,” or allow for greater control over the kind of insurance available, or provide cheaper coverage. To attract a wide array of health plans and secure bargain rates, co-ops must enroll a large pool of healthy individuals to cover the costs of sicker applicants. To attract these applicants, a co-op has to “offer substantial choice among well-known health plans” and lower premiums. In other words, it’s the classic “chicken-or-egg” dilemma: without enough applicants, co-ops can’t offer affordable coverage and without affordable rates, co-ops can’t attract enrollees.

The co-ops that do survive, like the Group Health Cooperative in Washington State, lack the inherent advantages of a real public option, and operate like just another health insurer. It’s unlikely that state-based or regional co-op health plans would have the market clout or purchasing power to lower costs or improve the delivery of care. Without the advantage of size, the different state co-ops would not be able to negotiate significantly lower prices with providers (they would have to compete with private insurers) or change reimbursement practices. In sum, they would act like private insurers. (Conversely, a national public option that has access to Medicare’s provider base, can achieve greater efficiencies.)

At a recent Alliance for Health Care Reform event, health care economist Uwe Reinhardt facetiously recalled a “nightmare” in which member-owned and operated co-ops became for-profit companies. As he reminded his audience, “you are all too young, but I’m old enough to remember, there were such co-ops once, they were called Blue Cross. They were owned by the members and so on and so forth and most of them went for-profit.” Watch it:

Indeed, as Jonathan Cohn recalls in SICK: The Until Story of America’s Health Care Crisis And The People Who Pay The Price, the early Blue Cross co-op-like plans of the 1930s “pledged themselves to a public purpose: bringing health insurance to large numbers of people.” They based their premiums on “a community rate: every subscriber, regardless of age, sex, or medical condition, paid the same monthly amount…Many insurers also practiced some form of ‘guaranteed issue,’ giving coverage to anybody who agreed to pay their premiums.” This community model worked, as long as the insurer covered large groups of people, in which the healthy subsidized the costs of the sick.

By the 1950s, commercial insurers arrived on the scene. But unlike the Blues, “commercial insurers don’t have a mandate to serve the public good — or to fill hospital bends. Their goal was to make money. And the most obvious way to do that was to target groups of relatively healthy subscribers.” Rather than charging everyone the same premiums, private insurers “offered to insure these people at rates that more closely reflected their own health status, then adjusted rates year after year according to how that status changed. This method of pricing insurance, known as experience rating, allowed commercial insurers to undercut the prices the Blues were offering.”

Ultimately, as private insurers began to attract more and more healthy Americans and “enrollment in commercial insurance surged past enrollment in Blue Cross during the 1950s, the Blues finally began a slow retreat from their founding principles…By 1968, Odin Anderson, one of the country’s leading experts on health insurance, declared that “the community rate concept is, for all practical purposes, dead.”

As Cohn concludes, “except for the name and the logo, Blue Cross is a wholly different enterprise from what it was in the 1930s and the 1940s. In 1986, Congress took away the tax breaks for Blue Cross, following a finding by the IRS that the plans were no longer very different form their commercial counterparts. This prompted many of the plans to convert to for-profit status outright.”

Transcript: Read more

Yesterday, during an appearance on MSNBC’s The Ed Show, Sen. Sherrod Brown (D-OH) suggested that if the Senate Finance Committee fails to pass a bipartisan health care bill by the September 15th deadline, Democrats should begin moving the Health, Education, Labor, Pensions (HELP) Committee’s bill through the Senate.

Describing that the HELP bill — which passed committee after 11 days of mark-up and 160 Republican amendments — as a “bipartisan, American bill,” Brown warned that if Baucus tries to satisfy “conservative lawmakers” from small states, “it means a lot of others aren’t [satisfied], including, I think, the majority of the country.” The HELP bill isn’t “bipartisan on the big fundamental issues,” like the public option and the employer mandate, Brown said, “but neither was Medicare. We would have never gotten Medicare 40 years ago if everyone had waited for the conservative Republicans to join on board”:

We had 11 days of mark up, 11 days of considering amendments in the HELP Committee. I’ve been in the House and Senate for a total of 16, 17 years now, and I have never seen a bill, in all this time that had that much attention paid to it, that many amendments, that long a period of mark up. We accepted 160 Republican amendments, this is a bipartisan bill. It’s just not bipartisan on the big fundamental issues, but neither was Medicare. We would have never gotten Medicare 40 years ago if everyone had waited for the conservative Republicans to join on board. It’s a difference in views….There is a deadline of September 15th. We need to enforce it. If Senator Baucus can’t get a deal by then we need to move forward and pass this bill. And we should use the HELP Committee bill, which is mainstream Democratic bill, mainstream American bill, and begin to move it through the Senate.

Watch it:

Passing the HELP bill through the Senate may present some difficulty. Since the HELP committee doesn’t have jursidiction over Medicare, Medicaid, or financing, lawmakers would have to add the necessary provisions in conference or on the floor, in the form of amendments. Circumventing the Senate Finance Committee, while rewarding the hard work of the HELP Committee, would certainly outrage the defenders of ‘bipartisanship’ and it’s unclear how many senators would be willing to outsource key decisions to a conference committee.

Still, the President is determined to pass a health care bill this year and yesterday, during an interview with MSNBC, he left the door open to Brown’s approach. “You know, I am glad that in the Senate Finance Committee, there have been a couple of Republicans…who have been willing to negotiate with Democrats to try and produce a bill,” Obama said, “but they haven’t yet and I think at some point, some time in September, we are just going to have to make an assessment.” “I would prefer Republicans working with us on that because I think it’s the interest of everybody. That shouldn’t be a partisan issue.”

Transcript: Read more

This morning, the Washington Post offers fresh details about the Senate Finance Committee’s behind-the-scenes health care negotiations. Previous reports have indicated that the committee was replacing the employer mandate with a free rider provision, establishing a cooperative in place of the public option, and financing reform by taxing ‘Cadillac’ health care benefits.

In today’s Post, Baucus said preliminary estimates from the CBO show that the committee’s plan would cover 94% of all Americans, cost some $900 billion and would “not only pay for itself but would begin to reduce projected budget deficits by 2019.” Below are some more details:

Expanding coverage:

- Insurance market reforms: Prohibits insurance companies from denying coverage for pre-existing conditions. Everyone would be guaranteed coverage at a modified community rating.

- Expanding Medicaid: While eligibility rules are still unclear, an earlier version of of the compromise opened Medicaid to children and pregnant women below 133% of the poverty level ($28,200 for a family of four) and parents and childless adults at or below 100% of the poverty level ($10,800 per year).

- A network of cooperatives in place of a public option: The committee has long abandoned the President’s call for a “robust” public option. According to the Post, Americans will have the option of enrolling in “a network of member-owned cooperatives.”

Financing reform:

- $70 billion — Taxing Cadillac health care plans:The legislation levies an excise tax of “up to 35 percent” on insurance companies and businesses that sell/offer “extremely generous policies worth at least $21,000 a year for family coverage or $8,000 a year for individuals.” About 7 percent of taxpayers hold such polices.

- $180 billion — Increased income tax collections:“With employers paying less for insurance, tax analysts predict, they would pay workers more in wages, increasing income tax collections by as much as $180 billion over the next decade.”

- $500 billion — Savings from Medicare and Medicaid: The legislation identifies $500 billion in savings from Medicare and Medicaid. For example, wealthier seniors would “pay more for prescription drug coverage under Medicare, and they would charge co-payments for clinical lab procedures.” The lab co-pays are potentially lucrative, raising about $20 billion over 10 years.

- $43 billion — Revenue from individual mandate and free rider penalties: Penalties from individuals who fail to obtain coverage and companies that “reimburse the federal government for workers who switch to subsidized coverage through an insurance exchange” could yield “about $43 billion over 10 years.” (By comparison, the CBO estimated that the employer mandate in the House bill would bring in $163 billion.)

Bending the curve of long-term spending:

- Encourage Americans to use less care: Proponents believe that the tax on “Cadillac health care plans” would lead insurers to pass the costs to policy holders and discourage the use of unnecessary services, thus driving down overall health-care costs.

- MedPAC trigger: If reform does not meet a certain target for savings, a new MedPAC-like panel, called the Medicare Preservation Commission, would recommend ways to obtain additional savings. The recommendations would go into affect unless Congress votes down the entire package.

According to negotiators, the committee is still considering how to structure a Medicaid expansion to make it fair to individual states, establish subsidy levels to maximize assistance to the uninsured, squeeze savings from Medicare without imposing an undue burden on seniors or compromising the quality of care and maintain coverage for abortion services.

Given the outstanding issues and the reluctance of Republicans to support a popular Democratic initiate, an agreement is far from certain. On Wednesday, Sen. Chuck Grassley (R-IA) said the talks may still fall apart. “Who knows, we may not have a product,” he said. “But sometimes that’s the result of negotiations.”

This afternoon, during an interview with Bloomberg Radio, Karen Ignagni — the President and CEO of America’s Health Insurance Plans (AHIP) — criticized lawmakers for vilifying the insurance industry and reiterated insurers’ commitment to reforming the health insurance marketplace. “Our members have worked now for three years to contribute to the debate, to put insurance market reform squarely on the table…We’re for it. We understand how to do it, and we’ve been leading the charge and urging members of Congress to move forward,” Ignagni, the industry’s top lobbyist, stressed:

That’s what people want. They want to be in. They don’t want to be rejected because of preexisting conditions, and they want to make sure they have continuity of care. We’ve committed to that. That’s what our industry is doing. We are one of the first to step up and offer real change that affected our industry. And we’re still committed to that.

While the insurance industry has publicly supported regulations that would guarantee everyone coverage and outlaw pre-exising condition exclusions, Ignagni may be overstating the industry’s commitment to so-called “market reform.” On June 16th, despite Ignagni pledges of commitment, insurance executives from UnitedHealth Group, Assurant, and WellPoint specifically refused to “commit” to ending the controversial practice of rescinding coverage after an applicant files a medical claim.

Watch a compilation of Ignagni’s claim and insurers’ refusal to end rescission:

In its investigation of insurer practices, the Energy and Commerce Subcommittee on Oversight and Investigations concluded that far from “leading the charge” on reform, Assurant Health, UnitedHealth Group, and WellPoint have rescinded policies for almost 20,000 individual insurance policyholders” and avoided paying more than $300 million in medical claims” over the last five years. From its review of case files, the Committee identified “a variety of abuses by insurance companies, including”:

- Conducting investigations with an eye toward rescission in every case in which a policyholder submits a claim relating to leukemia, breast cancer, or any of a list of 1,400 serious or costly medical conditions;

- Rescinding policies based on an alleged failure to disclose a health condition entirely unrelated to the policyholder’s current medical problem;

- Rescinding policies based on policyholders’ failure to disclose a medical condition that their doctors never told them about;

- Rescinding policies based on innocent mistakes by policyholders in their applications; and

- Rescinding coverage for all members of a family based on a failure to disclose a medical condition of one family member.

As former health insurance executive Wendell Potter argues, insurers seek to “drive down” costs by refusing to insure “unhealthy people,” a tactic borne out by the fact that 47 million Americans currently lack health insurance. The “insurance industry has been one of the most successful, in beating back any kinds of legislation that would hinder or affect the profitability of the companies,” said Potter, the former head of Corporate Communications at health insurance giant CIGNA.

America’s Health Insurance Plans (AHIP) — the lobbying arm of the insurance industry — maintains that “for every dollar spent on health care in America, approximately 1 penny goes to health plans’ profits.” The group’s health care reform website offers the helpful visual of a subdivided dollar bill: “Fact Check: Setting the Record Straight on Health Plans’ Profits,” one blog post exclaims. Only one one-hundredth of the premium dollar is pocketed by the insurer, the rest is spent on providing medical care.

But as NPR’s All Things Considered points out the group’s “fact check” is itself misleading, since insurers are measuring their profits against total health care spending, not company revenues. “All that statement says is, if you eliminated all our [insurance company] profits, national health spending in America would be 1 percent lower. It has meaning only in that context,” health care economist Uwe Reinhardt explains. Within the context of companies’ revenues, insurers skim off 15-20 percent of premium dollars for administrative costs and profits. In fact, an examination of insurers’ medical loss ratio — the fraction of revenue from a plan’s premiums that goes to pay for medical services– suggests that within the last 10 years, insurers have been spending less on medical care and more on administrative costs or profits:

Moreover, a report by Families USA found that “insurers in the individual market sometimes maintain medical loss ratios of only 60%, retaining 40% of premium dollars for administration, marketing and profit.” “For the 10 biggest insurers in the year 2006 (the year the insurers used for the 1 cent out of every dollar depiction above), profits were anywhere from 2 to 10 percent, or two to 10 pennies on the dollar. That’s two to 10 times as much as what the insurance industry group suggests in its illustrations.”

The top five earning insurance companies averaged profits of $1.56 billion in 2008 and reported spending an average of “more than 18 percent of their revenues on marketing, administration, and profits.” That year, CEO compensation for these companies ranged from $3 million to $24 million.” Below is a partial list of insurer/CEO profits:

Insurer:	Company Profits:	CEO Total Compensation:	CEO 5 Year Compensation:
UnitedHealth Group	$2,977,000,000	$5,030,000	–
WellPoint	$2,490,700,000	$4,070,000	–
Atena	$1,384,100,000	$38,860,000	$77,860,000
Humana	$647,000,000	$2,390,000	$56,910,000
Cigna	$292,000,000	$30,016,000	$120,510,000

CEO compensation seems to be decreasing, if ever so slightly. A survey by Modern Healthcare “of compensation for the health care CEOs” failed — for the first time in seven years — to turn up a healthcare CEO who raked in more than $15 million in compensation last year.” The performance of the stock market in 2008 was a big reason that the compensation of the 30 CEOs covered by the survey was relatively low, Kaiser Health News noted. But the “relative down year” for these executives “probably won’t generate much empathy” for them because “the median compensation… was still a bit more than $4 million. Moreover, as the detailed disclosures on executive pay required by the U.S. Securities and Exchange Commission show, every CEO has stock options that could be worth millions as the equity markets recover.”

Despite lower than expected profits, insurers are not holding back. The industry already set records from January to March, “when health-care firms and their lobbyists spent money at the rate of $1.4 million a day” on campaigns designed to influence the health care reform legislation now moving through Congress.

Over at ThinkProgress, Lee Fang has detailed how corporate and GOP funded right-wing extremists are orchestrating an astro-turf campaign to disrupt Democratic town halls and derail comprehensive health care reform. This past weekend, Rep. Lloyd Doggett (D-TX) fell victim to the right’s strategy, where protesters followed him and chanted “just say no” to health care.

During an appearance on CNN, Doggett revealed that the Republican party filled the event with “volunteers” who shouted scripted bumper sticker slogans that were “totally as phony as the grassroots nature of this organization.” “There was never any willingness any give and take,” Doggett said, “we could write that bill any way one would want to write it nothing would satisfy them.” Some protesters even advocated overturning Medicare and Social Security:

Well, I know in reference to the Republican Party because its on the website of the local party chair, both urging them to come and thanking them for coming. It’s interesting that they decided to set all this up as a video opportunity. So that what you just showed was film taken by the Republican Party of Texas….They were waving the 10th amendment, the rights reserved to the states, and actually admitted to me, several of them, in the discussion, that they didn’t only want to stop health care reform, they wanted to repeal Medicare and social security.

Watch it:

Indeed, Republicans have a long history of opposing Medicare and demonizing health care reform as a socialistic government-takeover of health care — regardless of the actual proposal. As GOP wordsmith Frank Luntz admitted in an interview with the New York Times magazine, “we don’t know what he is proposing. We want to avoid “a Washington takeover.”

The overwhelming majority of Americans, however, support the tenets of comprehensive health care reform:

As CAP’s Ruy Tiexiera points out, “Health care reform is still quite popular, contrary to what you may have heard. What’s taking a hit is the multiple reform plans being batted around in Congress, which have confused the public and given conservatives a terrific opportunity to road test every antireform argument they can think of. After all, with so many plans floating around, how can the public be sure that these arguments don’t apply to at least one plan or provision of a plan that might possibly become law?”

Transcript: Read more

On Friday, after days of contentious negotiations between “Democratic House leaders and an influential group of fiscal conservatives in the party,” the House Energy and Commerce Committee passed a health care bill by a vote of 31-28. The committee’s bill “will now be merged with two separate versions passed by other House panels before being considered by the full chamber in September.”

The vote in Energy and Commerce followed tense negotiations between the committee chairman, Rep. Henry Waxman (D-CA) and liberal and conservative wings of the Democratic Party. The conservative Blue Dog caucus secured concessions that decoupled the public health insurance option from Medicare (rather than piggybacking off of Medicare rates, the program would have to negotiate its own reimbursements with providers) exempt more businesses from providing coverage, and lowered affordability measures. In protest, 57 members of the Progressive Caucus sent a letter to House Speaker Nancy Pelosi (D-CA) arguing that the “agreement is not a step forward toward a good health care bill, but a large step backwards” since it does not provide “at a minimum, for a public option with reimbursement rates based on Medicare rates.”

On Friday morning, the two sides reached a deal. According to the amendments passed in committee, the progressives cushioned the Blue Dogs’ affordability cuts by placing a lid on the rise of premiums (premiums cannot increase faster than 150% of medical inflation) and re-investing system savings into affordability measures — thus complimenting the Dogs’ desire to find more savings within the system with the need to improve affordability measures. Moreover, Health and Human Services Secretary Kathleen Sebelius told House members that since she would be negotiating the rate for the public option, in some regions of the country, she might be able to negotiate provider payments even lower than Medicare plus 5 percent.

On the affordability front, the final legislation still increases the premium caps for Americans making more than 150% above the federal poverty line (FPL), but progressives negotiated an agreement to reinvest expected savings from administrative simplifications, the accountable care organizations (models) in Medicaid, and the Medicare’s new-found ability to negotiate drug prices, into premium assistance.

Below is a table of the new affordability standards (before any savings are re-invested):

Family income within the following income tier:	Premium range BEFORE agreement (pay this % of income before assistance kicks in):	Premium range AFTER agreement (pay this % of income before assistance kicks in):	Percent of cost covered by plan (an actuarial percentage):
133% – 150% FPL	1.5-3%	1.5-3%	97%
150% – 200% FPL	3-5%	3-5.5%	93%
200% – 250% FPL	5-7%	5.5-8%	85%
250% – 300% FPL	7-9%	8-10%	78%
300% – 350% FPL	9-10%	10-11%	72%
350% – 400% FPL	10-11%	11-12%	70%

For individuals between 133% and 150% of the federal poverty line, nothing would change. However starting at 150 through 200%, Americans would have to spend a higher percentage of income on premiums before receiving subsidy assistance.

This morning, Pat Garofalo interviewed Sen. Dick Durbin (D-IL) about the lobbyist-sponsored defeat of cram-downs, responding to “crazies” at town halls, and, of course health care reform. To Durbin’s surprise, Garofalo asked a question submitted by Twitter follower @skyecoleman — “will you support a health bill without a public option like what Sen. Baucus is working on?”

Initially perplexed about “these people who tweeted” on “the @wonkroom twitter feed,” Durbin quickly recovered and said that he would “reluctantly” support a bill that did not include a public health insurance option. “We have the reality of 60 votes in the Senate and two Senators who are sick,” Durbin explained. “Senator Byrd, who may be able to return. We hope he can. Senator Kennedy, we hope he can return. Without them, we need at least two, maybe three Republicans to support our effort and there seems to be universal opposition to a public option among all Republican Senators.”

Watch it:

Byrd was released from the hospital in June, after suffering from a staph infection and recurring fevers, and is recuperating at home. Kennedy, who last appeared in Congress in April is still undergoing treatment for a brain tumor. Meanwhile at least four Democratic senators — Sens. Joe Lieberman (I-CT), Ben Nelson (D-NE), Mary Landrieu (D-LA), and Dianne Feinstein (D-CA) — have hinted that they won’t support a public option.

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In anticipation of the August recess, the health insurance industry is gearing up to oppose the four health care bills out of committee — and the GOP is cheering it on. “GOP aides on the Hill and Republicans on K Street” are urging America’s Health Insurance Plans (AHIP) — the insurers’ lobbying arm — “to get tougher,” Politico reports. “Hopefully, these guys will realize their approach hasn’t been working and will get into the game,” said a senior Republican aide on the Hill.

Answering the GOP’s call, AHIP’s director of strategic communications, Robert Zirkelbach, promised that the trade group is “going to be very active,” implying that the lobby is urging industry employees to “go to town meetings with members of Congress in August to confront them”:

We have people on the ground in more than 30 states. There are thousands of industry employees who have now had their integrity called into question. They want to have their voices heard as part of this.

Insurers are willing to accept limited government regulations (modified community rating, guarantee issue) — as long as all Americans under the age of 65 are required to purchase private coverage. In an interview with the New York Times, AHIP President and CEO Karen Ignagni “noted that the industry had endorsed many of the administration’s proposed changes, including ending the practice of refusing coverage for pre-existing conditions, and said it would work with lawmakers to develop a bill that did not include a public plan.” “The rhetoric that we are hearing is reminiscent of ’93, ’94, but we’re on the 2009 playbook,” she said, adding, “The inconvenient fact is that we support those reforms.”

Ignagni’s conciliatory tone obscures the lobbyist’s efforts to derail the public option and certain industry regulations. In her view, no entity — certainly not the government — should compete for the business of the uninsured; they are the private industry’s entitlement. Insurers spent “about $40 million on an army of lobbyists and lavishing campaign contributions on Democrats and Republicans to kill the public option. In all, the health industry spent $133 million in the second quarter alone, more than a million bucks a day.” According to the Wall Street Journal, insurers are also “pushing back against several proposals that lawmakers see as favorable to consumers. One proposal would prevent insurers from charging older Americans more than twice the rates charged to younger people. Insurers want to be able to charge older people as much as five times more.” WellPoint Inc., the nation’s largest insurance company, has set up an “online network where it makes the case against the public health insurance plan and urges consumers to contact their elected officials.”

The industry may not be re-playing the old ‘Harry and Louise ads,’ but it’s certainly twisting the legislation in its favor. If reports about the Senate Finance Committee’s bill are accurate — the bill will not contain a public option and would allow insurers to charge older Americans more than 7.5 times the rates charged to younger Americans — then the $173 billion the industry has spent on lobbying Congress was certainly a smart investment.