Consumer Watchdog – Health care reform turning into bailout for health insurers

It's hard not to read the new US Senate Finance Committee paper laying out policy options for health care reform as anything but a bailout of the HMO and insurance industry.

The paper has lots of policy options for the pivotal Committee, the architect of reform, to consider -- like whether there should be a public option to the private market and whether employers should be required to pay for health care. But there's one given for which there's no choice.  Every American will have to show proof they have a health insurance policy on their tax returns by the year 2013.  Convenient, isn't it? That's one year after the presidential election.

Okay, so the starting point for reform is that Americans have to purchase a policy from an HMO industry that has treated them horrifically.  After that, the committee will make choices. Should employers with more than $500,000 have to pay something for coverage? Should Americans have a public health care option to choose from?  Should health care benefits be taxed at some level?  Initially, though,  Senator Baucus, chair of the Finance Committee, the largest Democratic recipient of HMO money on the Hill, can make the call that individuals will have to pay for a private policy no matter what other choices are made. It's hardly "shared responsibility," it's saving a souless industry on the backs of the American people.

Mandatory purchases of private insurance policies without offering a public alternative to the private market is nothing other than a bailout for HMOs -- whose greed, waste and indifference to our health have created the current mess.

There's no mention of cost-cutting in the Senate Finance document either -- no regulation of HMO premiums, no limits on how much consumers will have to pay out of their own pocket in co-pays or deductibles.  That's what yesterday's charade at the White House with insurers, drug makers, doctors, and device makers was all about. The medical-insurance complex promised to voluntary cut $2 trillion over 10 years from health care costs without any specifics as to how because the bill for the taxpayers' share of the HMO industry bailout is about $1.5 trillion. Take it on faith the industry's efforts fighting obesity, coordinating care, and streamlinig paperwork will save enough money. Isn't that what HMOs promised a decade ago?

The Finance proposal laudably expands Medicaid and offers subsidies to lower income individuals to buy private policies. But it doesn't demand anything from the HMOs in return. Those same low income individuals could do much better in a public health plan like Medicare that has 2% overhead rather than 25% for the private market. And taxpayers could save a lot of money avoiding the private market.

President Obama said during the campaign that he was opposed to mandatory purchases of private insurance, but new Health and Human Services Secretary Kathleen Sebilius said recently the president was willing to consider the mandatory purchase notion.

If the White House truly believes the cornerstone of universal health care reform is forcing Americans to buy HMO policies without cost regulation or public alternatives, the fact that individuals won't have to provide proof on their tax returns until 2013 won't save Obama his presidency in 2012.

It's time to get tough in Washington on the HMO industry rather than pretending their cooperation is going to get the nation the affordable health care Obama promised during the campaign.   Having a health insurance policy today, particularly a cheap one, is no guarantee you will receive health care when you need it.  The Senate should focus on making health insurance a real promise of health care before making it mandatory.

Next, we understand the Senate Finance Committee is going into closed-door session to debate the options in the policy paper.  Perhaps Baucus and his caucus worry that if the details are aired publicly the public might understand the depth of the problems with letting HMOs and private insurers voluntarily make health care affordable and available.

There's a moment now to do health care reform right.  It's up to the White House to prove that there's another business besides show business in Washington, DC.  Otherwise, in the end, the American people will cast their review and it won't be pretty.