Wendell Potter: Public Option Essential, Baucus Plan An "Absolute Gift" To Health Insurance Industry

Speaking before the House Democratic Steering and Policy Committee, former health insurance industry executive-turned-whistleblower Wendell Potter warned that if Congress "fails to create a public insurance option to compete with private insurers, the bill it sends to the president might as well be called the Insurance Industry Profit Protection and Enhancement Act."

Potter also struck back against one of the key arguments made against the public option: that it would have an unfair competitive advantage over private insurers.

'Contrary to the misinformation being disseminated by the health insurance industry and its allies, the public insurance option would not have a competitive advantage over private plans," Potter told the committee. "It would have to meet the same benefit requirements and comply with the same insurance market reforms as private plans. "

Potter, who was previously a vice president of communication at Cigna, also sharply criticized Democratic Senator Max Baucus' health care reform bill in a conversation with reporters Monday, calling the plan an "absolute gift to the industry."


Potter said the proposal would not provide affordable coverage. It gives the industry too much latitude to charge higher premiums based on age and geographic location, fails to mandate employer coverage, and pushes consumers into plans with limited benefits, Potter said.

For more of Potter's thoughts on Baucus you can read the transcript below.

Thank you Madam Speaker for the opportunity to address the House Steering and Policy Committee. Madam Speaker and Members of the Committee, my name is Wendell Potter, and I am humbled to be here today to testify about the need for meaningful and comprehensive reform and about the efforts of an industry I worked in for many years to shape reform in ways that will benefit it at the expense of taxpayers and policyholders.

In the weeks since my June 24 testimony before the U.S. Senate Committee on Commerce, Science and Transportation, I have expressed hope at every opportunity that this indeed might be the year Congress will enact legislation to reform our health care system in ways that will truly benefit Americans for generations to come.

But I have also expressed concern that if Congress goes along with the so-called "solutions" the insurance industry says it is bringing to the table and acquiesces to the demands it is making of lawmakers, and if it fails to create a public insurance option to compete with private insurers, the bill it sends to the president might as well be called the Insurance Industry Profit Protection and Enhancement Act.


H.R. 3200, America's Affordable Health Choices Act of 2009, encompasses a comprehensive set of reforms that address the critical need for expanded coverage, lower health care costs, and greater choice and quality. Other legislative proposals, including the "Baucus Framework" being considered by the Senate Finance Committee's "Bipartisan Six," would benefit health insurance companies far more than average Americans.

The practices of the insurance industry over the past several years have contributed directly to the growing number of Americans who are uninsured and the even more rapidly growing number of people who are underinsured.

H.R. 3200 would go a long way toward making many of the standard practices of the industry illegal while providing much-needed assistance to low and moderate income Americans who cannot afford the overpriced premiums being charged by the cartel of large for-profit insurance companies that now dominate the industry.

H.R. 3200 would provide premium and cost-sharing assistance through the Health Insurance Exchange it would create. It would require the Secretary of Health and Human Services to establish a defined package of "essential health services" that all plans, public or private, would have to cover.

It also would prohibit insurance companies from denying coverage or basing premiums on pre-existing conditions, gender or occupation. It would eliminate deductibles or co-pays for preventive care as well as the lifetime limits currently common in health insurance policies. The bill also would set an annual cap on out-of-pocket expenses that is more reasonable than in other proposals.

As important if not more important than those market reforms, H.R. 3200 would also create a public insurance option to compete with private insurers. Contrary to the misinformation being disseminated by the health insurance industry and its allies, the public insurance option would not have a competitive advantage over private plans. It would have to meet the same benefit requirements and comply with the same insurance market reforms as private plans.

As I told Members of the Senate Committee on Commerce, Science and Transportation, insurance companies routinely dump policyholders who are less profitable or who get sick as part of their never-ending quest to meet Wall Street's relentless profit expectations.

While the reforms proposed in various bills before Congress would seemingly restrict insurance companies' ability to put investors' needs over those of consumers, Members must realize that provisions of some proposals, including the Baucus Framework, would actually drive millions more Americans, including many who currently have access to comprehensive coverage, into the ranks of the underinsured.

An estimated 25 million Americans are now underinsured for two principle reasons. First, the high-deductible plans many of them have been forced into by their employers require them to pay more out of their own pockets for medical care, whether they can afford it or note. Second, more and more Americans have fallen victim to deceptive marketing practices and bought what essentially is fake insurance.


The insurance industry is insistent on being able to retain what it calls "benefit design flexibility." Those three words seem innocuous and reasonable, but if legislation that reaches the president grants insurers the flexibility they claim they must have, and requires all of us to buy coverage from them, millions more of us will have little alternative but to buy policies that appear to be affordable but which will be prove to be anything but affordable if we become seriously ill or injured.


The big insurers have spent millions of dollars acquiring companies that specialize in what they call "limited-benefit" plans. Not only are the benefits extremely limited, the underwriting criteria established by the insurers essentially guarantee big profits.

H.R. 3200 would ban the worst of these policies. Other proposals, by providing financial incentives for employers to offer barebones plans with lousy benefits and high deductibles, would actually encourage them.

Unlike H.R. 3200, those proposals would not require employers to provide good benefits or even to meet minimum benefit standards. They also would permit employers to saddle their workers with the entire amount of the premiums in addition to the high out-of-pocket expenses, escalating the already rapid shift of the financial burden of health care from insurers and employers to working men and women.

The Baucus plan also would allow insurers to charge older people and families up to 7.5 times as much and younger people, impose big fines on families that don't buy their lousy insurance, and would weaken state regulation of insurers.

As a consequence, these proposals would do little to increase affordable coverage for those currently insured, or stop the rise in medical bankruptcy. They would, however, ensure that a huge new stream of revenue--much of it from taxpayers who would finance the needed subsidies for people too poor to buy coverage on their own--would flow--"gush" might be a more appropriate word--to insurance companies. And much of that new revenue would ultimately go right into the pockets of the Wall Street investors who own them.

Over the past several weeks, I have repeatedly told audiences around the country that the public option should not just be an "option" to be bargained away at the behest of insurance companies who are pouring money into Congress to defeat substantial and essential reforms. A public option must be created to provide true choice to consumers or reform will fail to truly fix the root of the severe problems that have been caused in large part by the greedy demands of Wall Street.

By creating a strong public option and restricting the insurance industry's ability to enrich executives and investors at the expense of taxpayers and consumers, H.R. 3200 will truly benefit average Americans.

The Baucus plan, on the other hand, would create a government-subsidized monopoly for the purchase of bare-bones, high-deductible policies that would truly benefit Big Insurance. In other words, insurers would win; your constituents would lose.

It's hard to imagine how insurance companies could write legislation that would benefit them more.

Over the coming weeks, I implore each Member of Congress to put the interests of ordinary, extraordinary Americans--the people who hired you with their votes--above those of private health insurers and others who view reform as a way to make more money.

Thank you for considering my views.

I agree. We do need some sort of plan that would provide insurance to all Legal Citizens of the US.
Forget the idea of Co-ops.
The plans BHO is trying to present could work if, he would get off his high horse and make consessions.
One important one would be is to get Gov. out of it. Find a way for it to be privatized and non-profit. He wants too much control.
Another consession would be to make it mandatory for all Gov. workers including Politicians. If Politicians like it so much, they'd vote again to include themselves.

His next step will be to suggest a Co-op plan.
<<<Trust me, would this face lie to you?

That's interesting, considering I am not displaying the president in a disrespectful demeaning way. I'm not fostering the same old lies about this health care plan that have been debunked repeatedly. I'm not posting as many articles I can find to dismiss this administration on a daily basis.

If you have the authority to take this free membership away from me, go right ahead, but don't expect me to be afraid of you. You of all people shouldn't lecture me about playing nice. But if you want me out of here that bad, go for it.

I try to even the playing field.
There are people posting everyday attempting to sell his BS plan.
All presidents have been made fun of.
Please, refrain from attacking me. I think it is against the rules.

I was just kiddin' around. You know like 'O crap not my free membership!!!' And I have absolutly zero authority.

Interestingly enough my rather benign but heartfelt reply was considered insulting and deleted and I was repremanded by the site via email, which of course they have every right to do, it's their site. Yet my president is depicted in a demeaning, and rather racist manner and it's 'not' considered insulting. I am a bit confused by that but so be it. That should give you some measure of satisfaction.

I'll go ahead and apologize, Willing, for calling you childish. It was not so much your response, that caused knee jerk reaction but your dipiction of our president, the man I voted for legitimately as an american and a voter, that set me off. I would wager that might have been the idea, but even if it was not I should have had more sense than to react to it.

But if that portrayal of Obama is considered appropriate, there's nothing I can do about it. Now maybe this too will also be considered off limits, I don't know anymore, I guess I will find out if you no longer see me around.


Some days I can handle the negativity in here, some days I can't. The past few days it's been harder and harder to deal with it. If I am not banned for this reply, I will try to be less reactive. But if people continue to riducule and demean my choice for president, I will just ban myself...

Excellent post & thread Boo!

We have the best health care system in the world and just think how much better it would be if liberals hadn’t been find toning it for the last 75 years. I’ve read that a lot of general practitioners have to have one office person just to fill out reports for the government that do not directly concern a individual patient.

It has happend to me several times. Im sure that does not surprise you.LOL. Did you notice they removed the post where I originally started this? Its no fun being censored. But,what can you do? Such is life in the USA?

The thing is, the so-called playing field has this annoying habit of leveling itself. I'm much more likely to read posts from people I think are taking a more moderate line or from a conservative who is posting _their_ opinion and observations in an interesting way.

There used to be some folks here who posted profile pictures to go with their posts that depicted GWB with a Hitler moustache. Although I didn't care for GWB, I sent those posts to the bit bucket because I knew they were mostly propaganda unworthy of a second look.

Now, oftentimes I would not agree with George W. Will or William F. Buckley, but felt I would be remiss if I didn't at least give them the chance to disappoint me.

And funny thing was, they often did NOT.

The other funny thing is that once all the dice are thrown and we find out who 'wins' and who 'loses' in this healthcare initiative, just like last time, the small incremental steps like HIPAA will be the the unheralded changes which will be the small victories for people like myself.

Just my opinion, but maybe you'd be more effective if you didn't post the goofy pictures and the party line and just talked American to American, instead?


-Kerry O.

I agree, we really need to have a conversation on a serious matter versus the propaganda, hate talk and disrespectful photos.