The Center for Public Integrity

One of my responsibilities when I was head of corporate communications at Cigna was to help ensure that the company’s annual meeting of shareholders ran smoothly and, if at all possible, attracted no negative publicity.

I always dreaded the annual meeting because you really never knew if one or more disgruntled shareholders might show up and ask rude questions of the CEO. But during all of my years of helping plan those meetings, we had an unblemished string of non-events. We considered the meetings marathons if they lasted more than 15 minutes. Most of them were over long before then. Over the course of 10 years, I only recall two reporters who felt compelled to attend, and one of them got stuck in traffic and missed the whole thing.

Some of my peers at other health insurers were not that lucky, but relatively few of the big-profit insurers have had to cope with contentious shareholder meetings.

It is clear those days are over.

Some investors are now beginning to question how those companies make the billions of dollars in profits they report every year, especially with the ranks of the uninsured continuing to swell, how they spend policyholders’ money to influence public policy and whether their CEOs are truly worth all they are being paid.

Of the five biggest for-profit insurers, Cigna will lead off the annual meeting season this coming Wednesday in Hartford and it will not likely be the sleeper previous meetings have been.

That’s because earlier this month, one big shareholder — the Change to Win (CtW) Investment Group — sent a letter to other shareholders urging them to “send our board a clear message: Cigna’s executive pay structure is broken and open engagement needs to begin with concerned shareholders, immediately.”

Want to find out what Congress is about to vote on? Take a ride on the Washington subway.

If you’ve been on the Metro in recent days, you might have seen an ad designed to make you feel sorry for our poor health insurance companies. So sorry that you’ll call your congressman and demand he support a bill that would gut an important part of the health care reform law: the provision requiring that insurers spend at least 80 percent of the premiums they collect from us on our actual health care.

Back in the early 1990s, when most insurance firms were still nonprofits, they were spending on average 95 cents of every premium dollar paying medical claims. As they began to convert to for-profit status, though, that percentage dropped because of pressure from Wall Street. Now that the industry is dominated by a handful of investor-owned corporations, the average is around 80 percent. The members of Congress who drafted the Affordable Care Act felt that was as low as it should go. And so they inserted language in the bill requiring insurers to pay rebates to their policyholders if they go below that threshold.

Shareholders hate that provision because the less insurance companies spend on health care, the more is available for profits. And because job number one for any investor-owned company is to “enhance shareholder value,” industry lobbyists have been at work ever since the bill’s passage to get the provision repealed or weakened.  One way of doing that is by getting Congress to exempt the commissions insurance firms pay agents who sell their policies from the equation used to determine that threshold. The House Energy and Commerce Committee is set to do that as early as today.

If there is a group of people more anxious about how the Supreme Court will rule on the health care reform law than President Obama and the millions of Americans who are already benefiting from it, it is health insurance executives.

Not only have their companies been spending millions of dollars implementing the parts of the law that pertains to them — and most of them do — but they also have been counting on the law as very possibly the only thing that can preserve the free market system of health insurance in this country. This is why it is so ironic that defenders of the free market are the most vocal critics of the law and the ones hoping most ardently that the Court will declare it unconstitutional.

Health insurers have known for years that their business practices of excluding growing numbers of Americans from coverage and shifting more and more of the cost of care to policyholders are not sustainable over the long haul. That’s why their top priority during the health care reform debate was to make sure whatever bill Congress passed included the much-vilified individual mandate. And it’s also why the big insurance companies have been working almost frantically to reinvent themselves lately.

Cigna and Aetna recently became the latest of the biggest national firms to rebrand themselves and roll out new logos and self-descriptions. Cigna is now “a global health service company“ while Aetna is now “one of the nation's leading health care benefits companies.” What this means is that these companies and their competitors have come to understand that the very policies that enabled them to make Wall Street-pleasing profits over several years has led to a health insurance marketplace that is shrinking. And as it continues to shrink, so will their profit margins.

Since Supreme Court Justice Antonin Scalia clearly isn’t going to take the time to actually read the health care reform law before he decides whether or not it’s constitutional, maybe he and a couple of his buddies on the High Court can catch a screening of “The Hunger Games”, the movie about children battling each other to the death in a futuristic America, renamed Panem.

“You really want us to go through these 2,700 pages?” Scalia asked during arguments on the constitutionality of the law last week. “Is this not totally unrealistic? That we are going to go through this enormous bill item by item and decide each one?”

He joked that spending time to read the Affordable Care Act before the Court decides its fate would put him in danger of violating the Eighth Amendment’s ban on cruel and unusual punishment. LOL, Judge.  

Cruel and unusual punishment is crucial to the Hunger Games, but it only lasts 142 minutes and no one in the audience gets hurt, mitigating anybody’s risk of violating the Constitution. The movie portrays a government completely disconnected from the people who struggle every day for the most basic elements of survival, including medical care. Only the wealthy residents of the Capitol have access to hospitals and modern medicine, which, fortunately for them, seems to have a cure for everything.  

This society-gone-bad scenario of denying basic care to citizens based on their income or social status seems on the big screen not only cruel and unusual but even incomprehensible. I can just hear Justice Scalia asking, again, “Is this not totally unrealistic?”

Guess what, Judge, it’s not. In fact, it’s occurring every day in what is still called the United States. And if you and your colleagues decide to scuttle ObamaCare, it won’t be long before we have PanemCare. For many Americans, we already do.

Hands off my health care!

Remember those words from the health care reform debate of two years ago? I’m confident we’ll be seeing them on protest signs in Washington again this week as the Supreme Court hears arguments on the constitutionality of the Affordable Care Act. And we’ll see them again when the protest campaigns shift into high gear this summer.

One of the rules of effective communications is to keep it simple. In attacking something you don’t like, use as few words as possible, and make sure those words pack an emotional wallop. That’s why lies about “death panels” and a “government takeover” of health care have been so potent. Unfortunately for those advocating reform, it’s far more challenging to explain and defend a law as complicated as the Affordable Care Act.

Maybe, then, supporters of the law should co-opt the “hands off” slogan and make it their own. That would require adding just a few more words here and there to make clear what would be lost if the law is repealed, gutted or declared unconstitutional.

Here’s are some suggestions:

“Hands off my health care! Granny doesn’t need her meds all year anyway!”

As I was reading former Wall Street executive Greg Smith’s bombshell of an Op-Ed in the New York Times last week, I mentally inserted the names of the big for-profit health insurers — two of which I worked for — in place of Goldman Sachs, where Smith worked until resigning on the day his column was published.

Smith wrote that he decided to leave Goldman-Sachs because it had veered so far from the company he had joined straight out of college that he could no longer say in good conscience “that I identify with what it stands for.”

He put the blame squarely on Goldman’s current CEO and president. It was during their watch, he wrote, that “the firm changed the very way it thought about leadership.

“Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.”

Had Smith been an executive at any one of the big investor-owned insurers that have come to control the U.S. health care system, he could have written the same thing.

Like Smith, I came to realize toward the end of my career that the companies I had worked for had changed so much during my two decades with them that I could not in good conscience continue to serve as an industry cheerleader and spokesman.

If I were trying to persuade the Supreme Court later this month that Obamacare should not be declared unconstitutional, I would tell the story of the woman who was the original named plaintiff in the lawsuit filed by the National Federation of Independent Business, one of the fiercest critics of the health care reform law.

The NFIB thought it had found the perfect person when one of its members, Mary Brown, a 56-year-old owner of an automobile repair shop in Panama City, Florida, volunteered to lend her name to the lawsuit.

Brown was outspoken in her belief that Congress had gone beyond what the U.S. Constitution allows when it included in the reform law a requirement that, beginning in 2014, most Americans will have to obtain health insurance or pay a fine to the IRS. She said she was uninsured and was that way by choice.

“She firmly believes that no one should have the right to tell her she has to use her own money to pay for health insurance,” Karen Harned, executive director of the NFIB legal center, said when the NFIB filed its lawsuit in 2010.

She turned out not to be such a perfect choice after all.

Last year Brown shuttered her business and filed for personal bankruptcy. Among her debts: nearly $4,500 in medical bills. More than $2,000 of that was owed to the Bay Medical Center in Panama City. The rest was to doctors in Florida, Alabama and Mississippi.

The NFIB had to scramble to find another small business owner to replace Brown’s name at the top of the lawsuit. It settled on Kaj Ahlburg, a retired New York investment banker who now lives in Port Angeles, Washington.

Aetna CEO Mark Bertolini caused quite a stir when he said at a Las Vegas conference a few days ago that the insurance industry as we know it is, for all practical purposes, a dinosaur on the verge of extinction.

Time to sing, “Ding dong the witch is dead”? Not quite, but the day when most Americans get their coverage from what we think of as an insurance company is close at hand.  It won’t be long before most of us get coverage through either a state or federal government-run plan or a local nonprofit company. The big investor-owned corporations like Aetna and the companies I used to work for, Cigna and Humana, know that the days of making a killing off of basic medical insurance policies are over. And the companies have no one to blame but themselves and a fatally flawed, uniquely American system of providing access to care.

While Bertolini was by no means predicting that Aetna and its competitors were about to close their doors and get the hell out of our lives, he most certainly sounded the death knell for the standard business model insurers have followed for many years — actually insuring people.

“The system doesn’t work. It’s broke today,” he said. “The end of insurance companies, the way we’ve run the business in the past, is here.”

Bertolini ticked off a number of reasons why providing basic health insurance to Americans was no longer viable — changes in demographics and the economy and, of course, health care reform at both the state and federal levels. What he did not say was that the standard operating practices of the industry were simply not sustainable and actually contributed more to the demise of the business model than any external factors.

Recent news releases from two very different organizations paint entirely separate pictures of what can happen to people once they sign up for a high-deductible health plan. 

One release from Cigna, the giant for-profit insurance firm I used to work for, would lead us to believe that human resource managers who haven’t moved all of their company’s employees into a high-deductible plan should be canned for fiscal ineptness.

The other, from GiveForward, a Web site where people can create personal fundraising pages, tells of the real-world consequences when people in high-deductible plans become seriously ill or get hurt.

One of the reasons I left my job in the health insurance industry was because I could not in good conscience continue to promote high-deductible plans, often marketed as “consumer-driven” plans, as wise choices for most Americans. These plans, which are often coupled with a health savings account, have become a favorite of insurance company executives and an increasing number of employers. That’s because they enable insurers and employers to shift more and more of the cost of care from them to health plan enrollees.  

Insurers regularly trot out studies, which they themselves conduct, as part of their ongoing campaign to persuade employers that haven’t yet joined in, to get with the program. Earlier this month, for example, my former employer released the results of the “Sixth Annual Cigna Choice Fund Experience Study.” A press release crowed that, “When American workers engage in health-smart habits offered in consumer-driven health plans, they reduced their health risks and lowered their total medical costs an average of $9,700 per employee over a five-year period.”

The biggest applause line Senator Diane Feinstein (D-Calif.) got at a gathering of Democratic Party activists last week came when she endorsed a ballot initiative to give the California Insurance Commissioner power to reject excessive health insurance rate increases.

Consumer advocates there decided to go the ballot initiative route after the insurance industry’s friends in the legislature blocked a bill last year that would do the same thing. Feinstein became the first Californian to sign a petition. Insurance Commissioner Dave Jones became the second. To get the measure before voters in November, the advocates, led by Santa Monica-based Consumer Watchdog, must collect half a million more signatures.

In her San Diego speech before the party faithful, Feinstein pointed out that in the first quarter of this year, the five largest health insurers — UnitedHealth, WellPoint, Aetna, CIGNA and Humana — posted profits of $3.6 billion, 16 percent more than the same period a year earlier. One of the ways those companies were able to achieve such Wall Street-pleasing success was by jacking up the rates on policies bought by individuals and small businesses. While most of these policyholders dug deeper into their pockets to avoid joining the 50 million Americans who are uninsured, many others had no choice but to let their coverage lapse.

As Feinstein noted, thousands of Californians have been forced into the ranks of the uninsured in recent years because of policies being priced beyond the ability of individuals to pay. She said many people in the state had received rate increase notices twice over the past year alone.