Why Do Insurance Companies Get a Free Pass on Monopolies? Public Plan Is Only Shot at Real Competition

A BUZZFLASH NEWS ANALYSIS
by Christine Bowman

President Obama and His Allies Are Stumping for Healthcare Reform -- In Which the Public Plan is Key. Push-Back From Vested Interests Intensifies.

It's crunch time for comprehensive healthcare reform, with President Obama now engaging in a full-court press to push his party's top domestic priority. Obama's Sunday weekly address this week was on healthcare's devastating impact on the economy. Next week the President will answer questions in a televised ABC-moderated townhall forum. Today the President delivered his message to the American Medical Association meeting in Chicago.

Dovetailing with the President, Congresswoman Jan Schakowsky (D/9th Dist. of IL) took questions and heard the concerns of Chicago-area constituents on Sunday at a townhall style meeting held at a senior center in suburban Niles. Schakowsky, a strong progressive who serves on several healthcare-related congressional committees, laid out the timetable for enactment, compared competing proposals and called for energetic support from activists.

Schakowsky made clear where the political battle lines of the healthcare reform debate have been drawn. She urged a "robust" public option as an essential path to reducing costs and providing an incentive for the US insurance industry private sector to become more competitive.

Sparks flew when a hostile adversary, who seemed eager to provide a fiery clip for the Fox News camera crew that was on hand, accused her of seeking to put the health insurance industry out of business.

"The private insurance companies are going to have to follow new rules," Schakowsky said. She also made clear that the goal of reform is not to protect the private health insurance industry, but to "guarantee access" and "make healthcare affordable for every single person."

She cited polling that shows 73% of Americans want a choice between enrolling in a public plan or going with a private insurer. She also vowed, "This moment is one I've been waiting for all of my adult life. ... We need to do a bill that can pass -- if necessary, without the GOP." She said the House will have a bill drafted next week, and the Senate has two competing versions ready. Both chambers "plan to act" in July, then send their versions into conference committee for reconciliation. The President wants a bill to sign by October 1.

Schakowsky noted that reform opponents are using talking points from conservative strategist Frank Luntz -- "whiz kid of the right," as she described him -- to defend vested interests and raise fears of reduced choice for consumers. Schakowsky suggested that the actors from the 1990s "Harry and Louise" commercials, which helped kill the Clinton health plan proposal, should be brought back now so they could say, "We really made a mistake." Schakowsky called those commercials "bogus" and added, "none of that was true." She also mentioned that progressive radio host Bill Press knows the actors and may enlist them on the side of reform.

Schakowsky and other reform advocates in the room shed useful light on the political strategy that is playing out. Whereas the right seeks to portray the status quo as a system full of "choice," reformers are framing the debate in terms of adding a robust public choice so as to inject real competition into the system.

No longer arguing for "single payer" (although Schakowsky had done so as recently as April), they instead argue for the creation of a healthcare "Health Insurance Exchange" that allows consumers to compare and choose from among public and private plans. Without a robust public plan in the mix, "there really isn't any competition," Schakowsky said.

Citing the McCarran-Ferguson Act (well-explained at DailyKos), Schakowsky said, "The insurance industry by law is allowed to collude ... they are exempt from anti-trust laws. ... there really isn't any competition." That fact was driven home by a study of the insurance industry just released in April that found, "Consolidation among health insurers is creating near-monopolies in virtually all reaches of the U.S. - with the most dominant firms grabbing more market share by several percentage points a year." In other words, the status quo consists of near monopolies within most major markets, in which marketplace incentives have not come into play and insurers have felt no pressure to improve quality or lower costs. The result, cited by Schakowsky, is that Americans spend 40% more for healthcare than do the Swiss, who come in as spending the next highest amount per capita.

"Without the public option, we won't be able to have any cost savings," an advocate explained during the townhall discussion. "Sick people are looked at as profit centers," another said. And a lawyer who formerly worked for insurance companies pointed out that, once a person submits a claim, they become a "claimant" -- in the profit-driven corporation's eyes, their adversary.

Schakowsky discussed cost containment in considerable depth, concluding, "We want more bang for our buck." The new public plan, she said, "will be better than the federal employee benefit plan." She also recommended reading "The Cost Conundrum," published by The New Yorker June 1, which compares Mayo Clinic costs for healthcare to those of McAllen, Texas. She also criticised players who have tried to "game the system."

The congresswoman stressed that activists need to make themselves heard now, while the bill is being negotiated and drafted and the opposition is digging in. Legislators need stacks of constituency mail to take to the floor when arguing to their colleagues. Letters to the editor are needed to inform and sway other voters. She suggested going to the activist group HCAN's website to see their "action plan" ("Health Care for America Now") and to Organizing for America (the Obama campaign reincarnation). The two are working together to help achieve comprehensive reform.

Schakowsky dismissed the recently touted back-up "regional coop idea" as "ridiculous."

For another analysis of the political strategizing on achieving quality healthcare for all without "single payer," see Dr. Lora Chamberlain's commentary at OpEd News. As she writes, "We MUST have a fall back position." The time is now for progressives and all friends of healthcare consumers to unite and mobilize against the entrenched and moneyed powers that are erecting roadblocks at every turn. Let the conservatives argue against the increased competition that a public plan can introduce -- if they dare.

A BUZZFLASH NEWS ANALYSIS

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