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How health insurance industry allies are going to lie and attack Warren’s Medicare for All plan

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Now that we’ve seen Senator Elizabeth Warren’s plan to pay for Medicare for All without raising taxes on the middle class, let me tell you what is happening in Washington.Forbes Tate, the Washington-based PR firm hired by big insurance, drug and hospital companies to create and run a front group called the Partnership for America’s Health Care Future, will already have convened an urgent conference call with its clients to go over Warren’s plan and begin implementing a strategy to attack it. A big part of that strategy will be to reach out to reliable industry allies to do the dirty work.

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One of those allies is likely to be the Committee for a Responsible Federal Budget (CRFB), a supposedly nonpartisan organization that issued a widely publicized report on October 28 insisting that, as Axios reported in its analysis of the report, “the middle class would be forced to shoulder some of the burden” of financing Medicare for All.

The wisdom put forward by Washington pundits and think tanks like CRFB has been that improving and expanding Medicare to cover everybody, as both Warren and Senator Bernie Sanders advocate, can’t be done without a significant tax hike on middle-income earners.

CRFB senior vice president Marc Goldwein recently told The Hill: “There’s not enough money from the rich and corporations to finance [Medicare for All].” The Partnership made sure to highlight Goldwein telling Politico that “there is absolutely no way to pay for Medicare for All without tax increases… on the middle class.”

But much to the surprise of the insurance industry and its allies, Warren has just unveiled a plan that would not increase taxes on the middle class — in fact, it would slash what average Americans spend on health care and even reduce what the nation’s employers pay to subsidize health insurance for their workers. And Warren found that upon a closer look, there is enough money concentrated in the hands of the rich and corporations to finance a large chunk of Medicare for All.

The health insurance industry believed it was marching Warren into a trap, and now they’re scrambling to come up with a response to preserve their treasured but failing cash cow: the employer-based health insurance system.

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The advocates of preserving the U.S. employer-based system — most notably America’s Health Insurance Plans (AHIP) and Forbes Tate’s Partnership, of which AHIP is a member — will be forced to quickly come up with new talking points.

As the former head of corporate communications for Cigna, one of AHIP’s biggest members, and a former member of AHIP’s strategic communications committee, I can assure you that health insurers will find Warren’s plan terrifying because it will force their employer customers to question the need for, the “value proposition” of, private health insurers.

Even before Warren rolled out her plan, I had heard from employers all across the country that the current system no longer works for them, that it simply is no longer economically sustainable for either them or their employees.

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Employers of all sizes have woken up to the reality that private insurers cannot and do not want to control ever-escalating health care costs. They are fed up with being hit year after year with double-digit premium increases and having to push their workers into high-deductible plans.

Their fury has been building for years as they have seen bigger and bigger hits to their bottom lines because of an expense they have little control over — the cost of providing coverage to their workforce. As the Kaiser Family Foundation has documented, over the past two decades, the cost of an employer-sponsored family plan has soared from $5,791 (in 1999) to $20,576 (in 2019).

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As those premiums have gone up, employers have had to ask employees not only to pay an ever-increasing percentage of those premiums, but they have also reluctantly had to move more of them into high-deductible plans — to the point that, according to the Commonwealth Fund, “a quarter of working-age adults with job-based coverage had such high out-of-pocket costs and deductibles relative to their income that they were effectively underinsured.” That means that even though they and their employees are paying more for their coverage, the value of that coverage is decreasing.

Plus, workers are becoming increasingly aware that employer-sponsored coverage is anything but secure. They know that if they lose their jobs, they also lose their employer-sponsored health insurance. And they are also becoming increasingly aware that, unlike Medicare, private insurers are limiting their choice of doctors and hospitals.

Despite all that, we can expect the insurance industry to press its allies into service to attack Warren’s plan.

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In my old job at Cigna, I worked with many organizations that agreed to carry health insurers’ water whenever the status quo was under threat. Expect groups like the U.S. Chamber of Commerce (to which AHIP quietly funneled $100 million ten years ago in an effort to kill what became the Affordable Care Act), the National Federation of Independent Business (which I worked with in the late ’90s to kill the Patients’ Bill of Rights), and the National Association of Manufacturers (NAM), a longtime ally, to come out swinging against Warren’s plan.

It is especially notable that NAM is a member of the Partnership, and it also has a vested interest in protecting private insurers despite the challenges its members are facing with rising premiums and health care costs. NAM has recently jumped into the health insurance business with UnitedHealthcare, the nation’s biggest private health insurer. They have teamed up to sell association health plans to employers who want to offer coverage to workers that is exempt from the protections provided under the Affordable Care Act (and consequently less comprehensive and valuable).

We can also expect the Committee for a Responsible Federal Budget to weigh in again. That is another organization I worked with in my old job. That’s because the CRFP’s longtime president and CEO, Carol Cox Wait, was also a longtime member of the Cigna board of directors. Wait is still a CRFP director, as is my former colleague William Hoagland, who was Cigna’s chief lobbyist in Washington when I was head of corporate communications. We worked hand in glove.

Wait made millions of dollars during her 16 years on the Cigna board (1995-2011). Cigna pays its directors very well. In 2011 alone, according to Cigna’s annual report and proxy statement, the company paid her $256,884 for her board service. That’s a substantial amount of money, but Cigna also gave her thousands of shares of the company’s stock while she was a director. When she retired on December 31, 2011, she held 49,304 shares of Cigna stock, which at the time was valued at $2,070,768. Since then the share price has more than quadrupled. Those shares today would be worth more than $8 million.

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Being a peer of mine, Hoagland also undoubtedly was a highly compensated Cigna employee, and he likely would have received a significant part of his overall compensation in stock grants and stock options.

So the next time you hear the Committee for a Responsible Federal Budget blast Medicare for All, know that at least two of its board members most likely have a financial interest in keeping private insurance companies in control of our health care system.

And remember groups that are likely to come to the defense of the employer-based insurance system that Warren wants to dramatically reform, like the Chamber of Commerce, may (again) be receiving tens of millions of dollars from industry.

This article was produced by Economy for All, a project of the Independent Media Institute.
Wendell Potter is the former vice president for corporate communications at Cigna. He is now president of Business for Medicare for All and author of bestselling books “Deadly Spin” and “Nation on the Take.”

Report typos and corrections to: [email protected].
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