Posts tagged ‘Corporate Greed’
What’s Wrong With This Picture?
Congress Finds Tobacco Causes Serious Illness And Death. New England Journal Of Medicine Finds Health Insurance Industry Has Large Tobacco Stock Holdings.
The Family Smoking Prevention and Tobacco Act (H.R. 1256ENR) passed both houses of Congress and is awaiting the President’s signature. In that bill, Congress made the following findings:
- “Tobacco use is the foremost cause of premature death in America. It causes over 400,000 deaths in the United States each year, and approximately 8,600,000 Americans have chronic illnesses related to smoking.” H.R.1256 ENR §2(13)
- “The use of tobacco products by the Nation’s children is a pediatric disease of considerable proportions that results in new generations of tobacco-dependent children and adults.” H.R.1256 ENR §2(1)
- “A consensus exists that tobacco products are inherently dangerous and cause cancer, heart disease and other serious adverse health effects.” H.R.1256 ENR §2(2)
- “Nicotine is an addictive drug.” H.R.1256ENR §2(3)
- “Tobacco dependence is a chronic disease, one that typically requires repeated interventions to achieve long-term or permanent abstinence.” H.R. 1256 ENR §2(33)
So, why do health insurance companies, the very companies that Congress wants to run health care reform, have major holdings in tobacco companies?
A recent report in a letter to the New England Journal of Medicine (“Insurance-Industry Investments in Tobacco,” N Engl J Med 360:23, June 4, 2009, at 2483-2484) perhaps provides the answer:
“Insurance firms, like any business, are driven by profit and this fact compromises any health care plan that includes them…..Although investing in tobacco while selling life or health insurance may seem self-defeating, insurance firms have figured out ways to profit from both. Insurers exclude smokers from coverage, or more commonly, charge them higher premiums. Insurers profit … twice over.” (Id.)
According to this recent report, U.S. based Prudential Financial (which provides life and long-term disability insurance) owns tobacco holdings of $264.3 million; U.K. based Prudential (which provides health, life and long-term disability insurance) has a stake in tobacco totaling $1.38 billion; Standard Life (which offers health and life insurance) owns nearly $950 million of tobacco stock; Canada based Sun Life, which offers health, life, disability and long term care insurance owns just over $1 billion of tobacco stock. Northwest Mutual and MassMutual (both of which offer life, disability and long-term care insurance) respectively own more than $235 million and $585 million of tobacco stock. (Id.).
As the writers to the New England Journal of Medicine remarked, “[T]hese data are a reminder of the true priority of the insurance industry, which is making money, not ensuring health and well-being.” (Id.)
Are these really the companies we want running our new health care reform program?
A New Day Dawns for Oversight of Private Medicare Plans
With the advent of the Obama Administration, we have seen a new philosophy towards the private insurance plans that contract with Medicare under the Medicare Part C (Medicare Advantage) and Medicare Part D (prescription drug) programs.
No longer will the Medicare agency “partner” with the Medicare Advantage and prescription drug plans “to design and provide a variety of high quality health care products…..” as the agency said in 2009. This Administration is not about partnering with the private entities that it pays to provide health coverage to Medicare beneficiaries. Instead, Medicare will be looking closely at how these plans operate and what they do with the billions of federal dollars they receive. For example:
• Medicare has told current and potential Part C and Part D plan sponsors that it will no longer accept (during the application process for 2010) the incomplete applications, blank documents and spread sheets, and late filings that it has accepted in past years.
• Medicare announced that it is reducing Medicare Advantage payments for 2010 to account for “up-coding” by Medicare Advantage plans. Plans “up-code” the disease codes for their enrollees, i.e., claim that their enrollees have gotten sicker, in order to receive higher payments. The problem is that the private Medicare Advantage plans claimed an increase that was actually greater than the increase for the Medicare population.
• The President’s budget, released today, May 7, 2009, includes a focus on private Medicare plans and additional funding for greater oversight of the Medicare Advantage and Medicare prescription drug plans, as part of the overall effort to reduce fraud, waste and abuse in the federal government.
These changes are good for the fiscal integrity of the Medicare program, for the older people and people with disabilities who are served by the program, and for all Americans. What a breath of fresh air.
From the Desk of Judith Stein….
Update: Real reform still possible
Apparently the President will support use of the Senate “Reconciliation” process to move health care reform if the super-majority of 60 votes needed to avoid a filibuster can’t be garnered to pass a good plan. We heard this last week from a senior senator – he hoped a bipartisan vote would be possible, but indicated that certain principles need to be met by any health care bill, and that Reconciliation would be considered if those principles would otherwise be sacrificed. Amen to that.
Let’s not accept “something’s better than nothing” again! That mantra helped pass the 2003 law that gave us private Medicare Advantage, Part D, and windfalls for corporations – at the expense of Medicare participants and taxpayers. Been there, done that. This time we need a good plan with a solid public option that puts people above profits.
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April 24th
CMA Health Policy Consultants’ contacts in DC indicate that a public option in health care reform is in jeopardy. Is it possible that after all the problems Medicare has had with private plans, and the plans’ exorbitant additional costs, that we will actually let corporate greed trump the interests of sick people and taxpayers once again?
CMA Health Policy Blog 