The Struggle Behind the Scenes Over Health Care Reform

CMD's Senior Fellow on Health Care, Wendell Potter, spoke at the Armand Hammer Museum in Los Angeles about the ongoing struggle over the implementation of the new health care legislation. Coverage of the new law has been minimal lately, pushed off the front pages by the oil disaster in the Gulf of Mexico, but a lot has been going on behind the scenes. Even though Congress passed, and the president signed the new healthcare legislation, we still don't know how it's going to be implemented, because the legislation only lays out Congressional intent. Numerous regulations must now be written to govern the business of healthcare in America. Parts of the new law could still be invalidated by the courts, or repealed by future members of Congress. So what is going on behind the scenes, anyway? Big insurers are quietly working very hard to preserve the status quo, just as the big banks are doing with financial reform.

To do that, they are trying to influence regulatory processes at the federal level, including heavily lobbying the organization charged with writing most of the regulations, the National Association of Insurance Commissioners (NAIC). Big insurers are struggling for the freedom to keep spending less and less on medical care, because every dollar they don't spend on medical claims means more dollars paid to shareholders and CEOs. Insurance companies are pulling out all the stops, Wendell says, including trying to manipulate the very definition of the term "medical care." They are pressuring the NAIC to let them shift a lot of what the companies now count as administrative expenses into their "medical expense" category. If that happens, the insurance companies will look like they're spending more on medical care, without really changing any thing at all, and that meets their goal of assuring no real change occurs at all.