Galesburgers for Health Care Reform Regular people working to make a reform a reality…

By Peter Dreier of The Nation
October 23, 2009

Social move­ments are messy, so it is often dif­fi­cult to know, in the midst of the battle, which side is win­ning. But in the past month, momentum on health­care reform has unmis­tak­ably shifted as lib­erals and pro­gres­sives have taken to the streets, the Internet, the air­waves and the halls of Con­gress to push for a bold public option, strong reg­u­la­tions on insur­ance abuses and a pro­gres­sive tax plan to finance reform.

The Obama admin­is­tra­tion and its allies in Con­gress now under­stand that per­mit­ting the unholy alliance of insur­ance industry muscle, con­ser­v­a­tive Demo­c­ratic obfus­ca­tion and right-wing mob tac­tics to defeat the president’s health­care pro­posal would write the con­ser­v­a­tive play­book for blocking other key com­po­nents of his agenda–including action on cli­mate change, immi­gra­tion reform and labor laws. So in just the past few weeks, we’ve seen a change in strategy, a strong grass­roots move­ment and markedly firmer resolve by the White House and lib­eral Democ­rats in Congress.

The Summer of Right-Wing Rage

At the end of the summer, pun­dits were already writing obit­u­aries for major health­care reform. Par­tic­u­larly during the August Con­gres­sional recess, an epi­demic of right-wing anger against Obama and his policy agenda–of which health­care reform was simply an imme­diate and con­ve­nient target–captivated the media, which reported dis­rup­tions at Con­gres­sional town hall meet­ings as though they were an accu­rate reflec­tion of public opinion rather than a pep rally for extrem­ists, encour­aged by Fox News and talk-show jocks. The right-wingers stoked fear and con­fu­sion by warning that Obama’s “social­ized med­i­cine” plan would create “death panels,” sub­si­dize illegal immi­grants, pay for abor­tions and force people to drop their cur­rent insurance.

Repub­lican offi­cials, including Sen­ator Charles Grassley, Sen­ator Jim Demint, Repub­lican National Com­mittee chair Michael Steele and con­ser­v­a­tive pun­dits Glenn Beck, Rush Lim­baugh, Sean Han­nity, Bill O’Reilly and Betsy McCaughey repeated these myths. And sup­port for the public option tum­bled over the summer in response. In June, 62 per­cent of Amer­i­cans told Wash­ington Post/ABC poll­sters that they favored a public option. By mid-August, sup­port had slipped to 52 per­cent. Obama’s pop­u­larly fell, too, as jobs con­tinued to dis­ap­pear and the administration’s pro­posals to bail out the banks and the auto industry met with right-wing attacks and public skepticism.

For months Obama had insisted that any sig­nif­i­cant reform of the health­care system include a “public option”–an expanded ver­sion of Medicare that would com­pete with pri­vate insur­ance com­pa­nies, pres­suring them to reduce costs and pro­viding Amer­i­cans with greater choice. Repub­li­cans made it clear that they wouldn’t sup­port any plan that com­petes with the insur­ance industry or chal­lenges its run­away costs and irre­spon­sible prac­tices. With huge majori­ties in both houses of Con­gress, Obama didn’t need to win Repub­lican votes, but he still held out hope for a bipar­tisan bill. More trou­bling, Obama dis­cov­ered that even he couldn’t charm the con­ser­v­a­tive Democ­rats in Con­gress into sup­porting his plan.

By the end of August the pres­i­dent, unsure of his polit­ical footing, was sending sig­nals that he might settle for reform without a public option, assuaging con­ser­v­a­tive Democ­rats and the insur­ance industry but angering many of his pro­gres­sive supporters.

The death in August of health­care reform stal­wart Sen­ator Ted Kennedy bol­stered the influ­ence of Sen­ator Max Baucus, chair of the Senate Finance Com­mittee, which was drafting its own health reform leg­is­la­tion. Baucus, a dar­ling of the health insur­ance and phar­ma­ceu­tical indus­tries, has been par­tic­u­larly opposed to Obama’s pro­posal for a public option.

In its August 17 cover story, Busi­ness Week reported that “The Health Insurers Have Already Won.” As if to con­firm Busi­ness Week’s analysis, in mid-September Steve Elmen­dorf, a lob­byist for Unit­ed­Health, sent out invi­ta­tions to a fundraiser at his home for House Speaker Nancy Pelosi. That same day, reports from CNN and the Asso­ci­ated Press sug­gested that Pelosi appeared to back off her non­nego­tiable sup­port for the public option.

Tar­geting Insur­ance Industry Giants

Health Care for America Now (HCAN), a coali­tion of unions, com­mu­nity orga­ni­za­tions, con­sumer groups, envi­ron­men­tal­ists and net­roots groups such as MoveOn, has been spear­heading the reform cam­paign since the group was launched in July 2008. In Penn­syl­vania, a com­bi­na­tion of HCAN activism and Rep­re­sen­ta­tive Joe Sestak’s pri­mary chal­lenge to the newly Demo­c­ratic Sen­ator Arlen Specter pushed the incum­bent to become a reluc­tant reformer. (Specter first voiced sup­port for a public option at an HCAN rally in June.) During the summer, as health­care reform bills moved through Con­gress, HCAN, MoveOn, the Ser­vice Employees Inter­na­tional Union (SEIU) and the Amer­ican Fed­er­a­tion of State, County and Munic­ipal Employees (AFSCME) launched tele­vi­sion adver­tising cam­paigns, costing sev­eral mil­lion dol­lars, that asked Senate and House mem­bers in key states to sup­port bold leg­is­la­tion that included a public option.

But these efforts received little media atten­tion. And although most Democ­rats in the House and Senate were on board with the Obama plan, activists seemed unable to sway con­ser­v­a­tive Democ­rats needed to win sixty votes to thwart a Repub­lican filibuster.

In late August, seeing defeat on the horizon, HCAN and other reform activists regrouped. They decided to act more like a grass­roots move­ment and less like an interest group. That meant mobi­lizing voters, focusing atten­tion on the insur­ance industry, human­izing the battle by giving insur­ance com­pany vic­tims an oppor­tu­nity to tell their sto­ries and using cre­ative tac­tics to gen­erate media atten­tion. In the past month the grass­roots move­ment has focused on the insur­ance industry’s out­ra­geous profits, abuse of con­sumers and out­sized polit­ical influ­ence. And they’ve been warning Democ­rats not to get duped by the industry’s pledges of cooperation.

The deci­sion to target the insur­ance industry as the major cul­prit for the nation’s health­care crisis and as the major lob­bying force trying to thwart reform was crit­ical. Most Amer­i­cans don’t like their insur­ance com­pa­nies. But the industry had been vir­tu­ally invis­ible since Obama took office. For months the Obama admin­is­tra­tion and Senate Democ­rats cod­dled insur­ance industry giants, hoping to enlist their sup­port for insur­ance reform. Karen Ignagni, pres­i­dent of America’s Health Insur­ance Plans (AHIP), had orches­trated the industry’s apparent coop­er­a­tion with the Democ­rats drafting health­care leg­is­la­tion, par­tic­u­larly with Baucus. Glowing main­stream media pro­files of Ignagni admire her skill at coaxing the big insur­ance com­pa­nies to try to co-opt, rather than con­front, the Democ­rats, drawing a con­trast to the industry’s com­bative stance during the early 1990s.

Once HCAN decided to expose the insur­ance industry, the group has mounted more than 200 increas­ingly feisty protest events in forty-six states. On Sep­tember 22 HCAN spon­sored about 150 demon­stra­tions at var­ious insur­ance com­pany offices across the country. The Los Angeles Times did not bother to report about the sev­eral hun­dred demon­stra­tors at WellPoint’s Cal­i­fornia sub­sidiary office, a few blocks from the newspaper’s office; nor did the New York Times report on those out­side Unit­ed­Health in mid­town Man­hattan. HCAN ral­lies that did attract reporters were treated as iso­lated local events rather than com­po­nents of a nation­ally coor­di­nated protest and a bur­geoning grass­roots movement.

On October 1 a moving van pulled up in front of a large house in a neigh­bor­hood just out­side Philadel­phia, the home of Edward Hanway, CEO of CIGNA, and eight HCAN demon­stra­tors got out. One was Stacie Ritter, a former CIGNA cus­tomer whose twin girls were afflicted with cancer at age 4. Their treat­ment left per­ma­nent damage, and CIGNA refused to pay for the human growth hor­mones that her doctor pre­scribed to help her daugh­ters grow prop­erly. When Ritter’s hus­band was briefly unem­ployed, they were bank­rupted. No one was home at Hanway’s man­sion. Ritter left a note: “Can I stay in your car­riage house until we get back on our feet financially?”

The same day, in Indi­anapolis, HCAN orga­nized a house call on Angela Braly, CEO of Well­Point, the nation’s largest health insur­ance com­pany. And in Wayzata, Min­nesota, fifty pro­testers, holding umbrellas and can­dles, stood out­side the lake­side man­sion of Unit­ed­Health CEO Stephen Hem­sley, in the rain, and screened a video unkind to the com­pany. (HCAN had tried to buy time to broad­cast the video on CNN, but the net­work refused to air it.)

Two weeks later, on October 5 and 6, HCAN returned to the scenes of the “crime”–insurance com­pany head­quar­ters in more than fifty cities–armed with signs, per­sonal sto­ries, crime-scene tape and chalk to tell the CEOs, “It’s a crime to deny our care.” Pro­testers in Boston, Min­neapolis and Philadel­phia engaged in non­vi­o­lent civil dis­obe­di­ence and were arrested. In addi­tion to HCAN, a number of inde­pen­dent health reform groups–including advo­cates for a single-payer system–waged protests of their own in sev­eral cities.

In mid-October, on the day cam­paign con­tri­bu­tion fil­ings were due, MoveOn mem­bers vis­ited sen­a­tors’ offices in Wash­ington and on their home turf. In Salt Lake City, activists that stood out­side Sen­ator Orrin Hatch’s office holding signs pointed out that Hatch has taken $913,000 in con­tri­bu­tions from health insur­ance com­pa­nies. The protest led Hatch to tell a national TV audi­ence that MoveOn is “not going to smear me without get­ting kicked in the teeth by me.”

On October 22 HCAN activists sur­rounded the hotel hosting AHIP’s annual con­ven­tion at the Cap­ital Hilton in Wash­ington, DC, with signs that read, “It’s a crime to deny care.” HCAN brought seven fam­i­lies from across the country to tell their sto­ries of denied care and egre­gious mis­treat­ment by the pri­vate health insur­ance industry. The fam­i­lies sent a letter to Karen Ignagni chal­lenging her to face them in person and hear what they’ve endured.

Reform advo­cates have not only high­lighted the plight of insur­ance industry vic­tims but also iden­ti­fied former industry employees, like former CIGNA exec­u­tive Wen­dell Potter and former Humana physi­cian Linda Peeno, to blow the whistle on the industry’s abuse of its cus­tomers. Doc­u­men­tary film­maker Robert Greenwald’s Brave New Films has cre­ated a series of short videos doc­u­menting the out­ra­geous com­pen­sa­tion and lavish lifestyles of industry CEOs (UnitedHealth’s Hem­sley made $57,000 per day last year) while mil­lions of Amer­i­cans go without insur­ance or bank­rupt them­selves with med­ical bills.

America’s Health­care Crisis

The focus on the insur­ance industry has brought into relief the tragic real­i­ties of America’s health­care crisis. In the past decade, the number of Amer­i­cans without any health insur­ance and the number who face bank­ruptcy due to insur­ance bills have both increased sig­nif­i­cantly. And over the past decade, pre­miums have gone up 138 per­cent, 3.5 times the growth in family incomes. In addi­tion, insur­ance deductibles, co-pays and co-insurance have been sky­rock­eting, to thou­sands of dol­lars a year for fam­i­lies, espe­cially for those with the cheaper insur­ance plans. Despite rising pre­miums, insur­ance com­pa­nies con­tinue to refuse to pay claims or delay pay­ments, both of which result in increased rev­enues for them. Last year, even in the midst of a reces­sion, Unit­ed­Health raked in $2.9 bil­lion in profits; Well­Point, $2.5 bil­lion; Aetna, $1.4 bil­lion; Humana, $647 mil­lion; and Cigna, $292 million.

Mean­while, the number of unin­sured Amer­i­cans is up to 46 mil­lion. Mil­lions more are underinsured–they pay for plans that leave them vul­ner­able in the event of unex­pected health emer­gen­cies. More employers are shifting costs to employees or drop­ping cov­erage entirely. Med­ical bills are now the prin­ciple factor in 62 per­cent of per­sonal bank­rupt­cies. More than half of Amer­i­cans, the majority of them people with insur­ance, are skip­ping needed care due to high out-of-pocket costs.

In its annual survey of the nation’s health insur­ance industry, released in Jan­uary, the Amer­ican Med­ical Asso­ci­a­tion found that just one or two com­pa­nies dom­i­nate in 94 per­cent of 314 met­ro­pol­itan mar­kets. “Without rivals to com­pete against,” said AMA President-elect James Rohack, “a large health insur­ance com­pany can take advan­tage of patients by raising pre­miums and dic­tating impor­tant aspects of patient care without fear of losing business.”

To pre­pare for the battle over reform, health industry lobby groups had hired more than 350 former gov­ern­ment staff mem­bers and retired mem­bers of Con­gress to lobby for them; two of them are Baucus’s former chiefs of staff. Since 2007 the insur­ance industry and HMOs have spent $51 mil­lion in cam­paign con­tri­bu­tions, tar­geted dis­pro­por­tion­ately to key mem­bers of the Con­gres­sional com­mit­tees drafting health reform bills. They have also spent at least $191 mil­lion on lob­by­ists, according to the non­par­tisan Center for Respon­sive Pol­i­tics. During the first half of this year, the insur­ance and HMO industry increased its lob­bying expen­di­tures and cam­paign con­tri­bu­tions to some $700,000 a day.

Pres­i­dent Obama hasn’t shied away from crit­i­cizing insur­ance com­pa­nies, either. In his Sep­tember 9 speech to Con­gress about health reform, Obama turned a corner: he gave health­care reform activists the signal to accel­erate their grass­roots push for a bold plan that includes a public option and requires insur­ance com­pa­nies to act more respon­sibly. Obama took aim at the right wing, calling its claims “a lie, plain and simple.”

Equally impor­tant, Obama finally took off the gloves and came out swinging against the insur­ance industry as the major obstacle to sig­nif­i­cant reform. “As soon as I sign this bill, it will be against the law for insur­ance com­pa­nies to drop your cov­erage when you get sick or water it down when you need it the most,” Obama declared.

Obama’s speech, and HCAN’s bur­geoning protest move­ment, embold­ened Orga­nizing for America (OFA), the group cre­ated to orga­nize Obama’s former cam­paign vol­un­teers. Once in office, Obama moved quickly, announcing one ambi­tious leg­isla­tive objec­tive after another. But instead of launching a par­allel strategy to mobi­lize Obama’s cam­paign sup­porters, OFA failed to keep up. Some critics argued that Obama had put OFA in a polit­ical straight­jacket by folding it within the Demo­c­ratic National Com­mittee, making it dif­fi­cult to con­front con­ser­v­a­tive Democ­rats. Many Obama cam­paign activists grew rest­less, hoping to par­tic­i­pate in orga­nizing efforts to push a pro­gres­sive policy agenda.

In Sep­tember a number of OFA staffers and key vol­un­teer leaders threat­ened to quit if OFA didn’t use its poten­tial influ­ence by encour­aging mem­bers to chal­lenge Democ­rats who refused to sup­port Obama’s health­care plan. In response, OFA directed its mem­bers to par­tic­i­pate in the protest ral­lies across the country, and it began tar­geting con­ser­v­a­tive and mod­erate Democ­rats. On October 20, local OFA groups gen­er­ated 315,023 calls to Con­gress pushing health­care over­haul, tripling the orig­inal goal of 100,000.

The Insur­ance Lobby Miscalculates 

In response to esca­lating crit­i­cism, the insur­ance industry mis­cal­cu­lated. After pre­tending to coop­erate with the Obama admin­is­tra­tion and Democ­rats, the industry’s CEOs and lob­by­ists double-crossed their one­time polit­ical allies by pub­licly attacking a com­pro­mise bill crafted by Baucus.

What trig­gered the industry’s about-face was a Con­gres­sional Budget Office report scoring the Senate Finance Com­mittee pro­posal. The CBO esti­mated that it would cost $829 bil­lion over the next ten years–less than the $900 bil­lion Pres­i­dent Obama had suggested–and would reduce the deficit by $81 bil­lion. The industry wasn’t happy with even the weak pro­vi­sions in the pro­posal that would “con­tain costs”–which the insur­ance com­pa­nies trans­late into “reduce profits.” Nor did it like that the Senate Finance Com­mittee adopted amend­ments reducing penal­ties for those who fail to buy pri­vate insurance.

So AHIP threw a temper tantrum, releasing a report warning that average family pre­miums will increase to $21,300 if the Finance Com­mittee bill is adopted. But the AHIP report neglects to take into account the Finance Com­mittee bill’s pre­mium sub­si­dies for fam­i­lies with incomes below $88,000.

The White House and the Demo­c­ratic lead­er­ship in Con­gress were taken by sur­prise. Said Scott Mul­hauser, a spokesman for Baucus and the other Democ­rats on the Finance Com­mittee: “This report is untrue, disin­gen­uous and bought and paid for by the same health insur­ance com­pa­nies that have been gouging con­sumers for too long. Now that health­care reform grows ever closer, these health insurers are breaking out the same tired play­book of decep­tion. It’s a health insur­ance com­pany hatchet job.”

“I’d spent a couple of hours with insur­ance industry folks last week, and yes, I did feel blind­sided,” Nancy Ann DeParle, director of the White House Office of Health Reform, told NBC. “I did feel we were working constructively.”

Obama used his weekly address on October 17 to blast the insur­ance industry in words even stronger than he used in his speech to Con­gress in Sep­tember. “The his­tory is clear: for decades rising health­care costs have unleashed havoc on fam­i­lies, busi­nesses and the economy,” Obama said. “And for decades, when­ever we have tried to reform the system, the insur­ance com­pa­nies have done every­thing in their con­sid­er­able power to stop us.” He charged the industry with “filling the air­waves with decep­tive and dis­honest ads” and “funding studies designed to mis­lead the Amer­ican people.” And he sug­gested that it was time to recon­sider the industry’s exemp­tion from fed­eral anti-trust laws.

Soon the chorus in favor of the public option was get­ting louder. At a press con­fer­ence this past Monday, Sen­ator Harry Reid, the Senate majority leader, said, “We’re leaning towards talking about a public option,” stronger lan­guage than he’s used in the past. On October 20 Pelosi said that she intends to push a more lib­eral ver­sion of a public option plan that would link reim­burse­ment rates to Medicare. She explained that she has more than 200 votes for the plan and wants to see “if we can find the remaining votes,” according to Politico.

On October 21 the House Judi­ciary Com­mittee voted to strip the health insur­ance industry of its sixty-four-year-old anti-trust exemp­tion, enabling the gov­ern­ment to force more com­pe­ti­tion into the industry. Sen­a­tors Reid, Patrick Leahy and Charles Schumer announced they would file sim­ilar legislation.

Public sup­port for a public option has recov­ered after taking a tumble over the summer. This week a Wash­ington Post/ABC poll found that 57 per­cent favor a public insur­ance option, while 40 per­cent oppose it. If a public plan were run by the states and avail­able only to those who lack afford­able pri­vate options, sup­port for it jumps to 76 per­cent. Under those cir­cum­stances, even a majority of Repub­li­cans, 56 per­cent, favor it.

There is still no guar­antee that a pro­gres­sive bill will make it out of con­fer­ence com­mittee and end up on Obama’s desk. There is still wiggle room on all three major fronts of the esca­lating battle for health reform: the public option, pre-existing con­di­tion reform and financing. As part of its health reform bill, the House has rec­om­mended a tax sur­charge on the richest 1.3 per­cent of Americans–families with incomes of more than $350,000. This approach is much more pro­gres­sive and effi­cient than the Finance Committee’s plan to tax so-called Cadillac insur­ance poli­cies. And there is still the ques­tion of who will be eli­gible for the gov­ern­ment sub­si­dies to help them buy insurance.

The insur­ance industry and its allies are still trying to weaken any leg­is­la­tion that threatens its profits and power. But it is on the defen­sive, and the Democ­rats seem to have redis­cov­ered their back­bone. Gen­uine health­care reform–which seemed prob­able in Jan­uary and impos­sible in August–now seems pos­sible. Activists helped turn the tide.

About Peter Dreier

Peter Dreier is pro­fessor of pol­i­tics and director of the Urban & Envi­ron­mental Policy pro­gram at Occi­dental Col­lege. He is co-author of The Next Los Angeles: The Struggle for a Liv­able City (Uni­ver­sity of Cal­i­fornia Press, 2005) and Place Mat­ters: Met­ro­pol­i­tics for the 21st Cen­tury (2nd edi­tion, Uni­ver­sity Press of Kansas, 2005) and co-editor of Up Against the Sprawl.