Will Dems Derail Sanders’s Push for Public Option?

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Wendell Potter, a health insurance executive turned whistleblower, on the GOP failure to repeal Obamacare and what lessons the 2009 defeat of the public option – when Democrats controlled Congress – can offer today.

Story Transcript

AARON MATÉ: It’s The Real News. I’m Aaron Maté in Baltimore.

Now that Republicans have failed to repeal Obamacare, progressive Democrats say single payer is back on the table.

BERNIE SANDERS: Ideally where we should be going, is to join the rest of the industrialized world, and guarantee healthcare to all people as…

WENDELL POTTER: Okay.

BERNIE SANDERS: …a right, and that’s why I’m going to introduce a Medicare for all single-payer program.

AARON MATÉ: Now, surely, Senator Sanders and his colleagues will have a hard time winning over Republicans, who couldn’t agree on just how much health insurance to take away, but what about Democrats? After all, it was the Democratic Party who controlled Congress when they passed Obamacare in 2010. But heavy lobbying from the insurance industry led them to reject even the modest, and some would say bare bones, public option.

With us to discuss, is Wendell Potter, an author and former health insurance executive.

WENDELL POTTER: Thank you.

AARON MATÉ: Wendell, as a former insurance industry insider, I’m going to ask you about what kind of lobbying blitz might happen, now that the repeal effort has failed.

But before we talk about that, I’m wondering if you could tell us the story of what happened in 2009-2010, when Democrats had the majority in the House, had the majority in the Senate, but they couldn’t even pass a public option. Tell us that story.

WENDELL POTTER: Well, they couldn’t pass a public option because the insurance industry is so powerful that it just simply said, that’s not going to happen. And all it takes, even with the Democrats with big majorities in both the House, and the Senate, they couldn’t get it through, because the insurance industry knew that they had at least one or two Democrats on their side, and Joe Lieberman was their go-to guy.

He was from Connecticut; a lot of insurance companies are based there. They were good to Lieberman over the years, and so he was the guy who really put the knife in the public option. It actually had passed over on the House side, but they couldn’t get the votes on the Senate side.

That was job Number 1 for the insurance industry. They knew that that was very threatening. They knew –- although they wouldn’t admit this -– that they would have a hard time really competing against a government-run healthcare plan that people could enroll in.

AARON MATÉ: And you’ve been among many people to point out that the public option itself was a pretty minimal proposal. It would not have covered everybody, and the coverage it would’ve offered certainly would’ve been pretty bare bones.

WENDELL POTTER: By the time, yes. By the time it reached the point in the Senate that it might, or might not have been the bill, it had been watered down quite a bit. You’re exactly right. There were so many restrictions. It still would’ve been maybe a start. It would’ve been the beginning of a government-created, government-run healthcare plan. But the insurance industry just, as I guess you would say, to make sure that whatever passed, if it did pass, it would be as weak as possible. That was what they did.

And it’s a problem that we need to take stock of, as we consider what happened back then, and going forward. The insurance industry and the pharmaceutical industry are incredibly powerful, and they have friends on both sides of the political aisle.

AARON MATÉ: As somebody who was formerly on the inside, how does that influence work? Can you take us through the mechanics of how the insurance industry communicates to Congress, “No, a public option to us is not even acceptable, so you have to kill it.”

WENDELL POTTER: Right. Well, people like me, in my former job, we used to create talking points that we would give to our lobbyist, and every insurance company has a lobbyist on staff. And they contract with lobbying firms in Washington -– and the state capitals, for that matter –- and they… it’s something that happens all the time. It’s continual. The lobbyists build relationships with staffers, with members of Congress. Insurance companies hire members of Congress, and former staffers.

So, you’ve got these built-in relationships. And keep this in mind, too: because of those… that they’re there year in and year out, day in and day out. They are really the source of information that most members of Congress have about how the healthcare system really operates. So, the odds are really stacked against consumers. There is just no equivalent for consumers to counter that kind of influence.

The way it works in practicality, is a lobbyist will go into a congressional office, and spend some time schmoosing with the staffer, sometimes with a member, and saying, you know, “Here is what we think you ought to be thinking about,” presenting the worldview from the insurance industry’s perspective.

AARON MATÉ: How do you assess the role of the health insurance industry during this whole debate we just saw about repealing Obamacare? What did they do?

WENDELL POTTER: They were working behind the scenes very closely, without a doubt, with Republicans on the House side, including with some of the Freedom Caucus members. They thought that there might be a chance that they could get out of this legislation what they couldn’t get out of Obamacare, or at least try to get some of the regulations, some of the new consumer protections on them eliminated.

So, you can rest assured that they wrote big chunks of that legislation because it would have been a windfall for them. They wanted to be able to charge older people five times as much as younger people, for the exact same policy. They wanted to have the ability to underwrite in ways that would enable them to avoid as much risk as possible, to cull from the pool of potential customers, those who need insurance the most.

That’s what they did before Obamacare, and they were making more money, obviously before Obamacare in that market, because they were really in charge, and there were really no consumer protections. Because Obamacare, it was perfectly legal for insurance companies to declare people uninsurable because of a pre-existing condition. They can’t do that anymore. So, they were looking to try to get rid of some of those consumer protections.

AARON MATÉ: And what do you see as their move now, in the wake of the failure of repeal?

WENDELL POTTER: Well, they’re going to continue to work on their relationships, to work both sides of the aisle. They’re always looking, as one former executive of the … Association said, “We need to look to where the puck is going next.” Who knows what will happen? I don’t think that the Republicans will have an appetite for taking any kind of healthcare legislation up in the near future.

But there’s no doubt, for one thing, the Affordable Care Act itself is not sustainable forever. It’s got a lot of flaws, and the insurance industry will always be there to try to make sure that, if and when Congress comes back to healthcare, they will have the congressman’s ear, or the senator’s ear to try to influence, so they never cease. I think it’s possible to overcome them.

I think that the country will actually eventually get really fed up, and understand that health insurance companies actually are very ineffective. They’re not essential. That’s their greatest fear though. Is that the country will wake up to that reality, particularly large employers.

AARON MATÉ: Now, you have people who advocate for single payer healthcare, calling for a new push for Medicare for all, and Bernie Sanders has said he will introduce legislation along those lines soon. But Sanders has also said that, in the short term, we have to try to put in place a public option.

What do you think is the best strategy here? Should Democrats renew the push for a public option? And if so, what lessons can they learn from last time, when they tried that with congressional control and failed?

WENDELL POTTER: Well, I think one of the things they should have learned, is you have to be in charge of messaging. You have to make sure you’ve got a really well planned communication strategy to communicate to the public, and to members of Congress and their staffs. What you’re talking about, why it makes sense, how it would benefit everybody.

One of the things that happened, was that the Democrats lost the messaging battle, and they should not ever do that again. They should’ve learned that lesson. And they also need to make sure that it’s abundantly clear how it would work, and how it would benefit people. And then, like I said, communicate that, not only to members, but to the public at large. That’s got to be essential, or it’ll never get out of the House.

AARON MATÉ: And the viability of a public option, is that a strong enough proposal?

WENDELL POTTER: It’s a start. I agree with Senator Sanders, you need to start somewhere, and there’s no chance at all, I don’t think, that we would see single-payer legislation getting approved in the House and Senate, and with who’s in the White House right now. It’s just too much of a departure from the way things are.

But, I think you need to begin to condition the environment, to condition the public, to let the public know what single-payer healthcare is really all about. That’s going to be essential. You’ve got to overcome, again all the propaganda that my former industry has been spreading, for many years, to scare people away from it.

So, you’ve got to really, really invest some money in a communication strategy to help people understand what single-payer is all about, and how people will be benefiting from it.

AARON MATÉ: Wendell, very quickly, as this fight goes forward, as Democrats try to push in something new, what should people be looking out for, in terms of both their own involvement in the issue of healthcare, and what to expect from the insurance industry?

WENDELL POTTER: Well, you can expect that the insurance industry will continue with its strategy of trying to shift more and more of the cost of healthcare from them to us. They’ll want us to focus more and more on premiums, and that’s what the Republicans did, and even some Democrats fall for this gambit of theirs. Is to try to make us think that all we need to be mindful of are premiums. While they’re doing that, they’re shifting more of the cost from them to us, in terms of co-insurance and high deductibles.

So, they’re really picking our pockets while they’re having us look at premiums. Be mindful of that. Their strategy, and I know this from my years in the industry, is to move every last one of us into a high-deductible plan, and for them to be able to increase that deductible year in and year out. That’s what’s going on. It’s incremental, so people aren’t paying a lot of attention to it. But they should.

AARON MATÉ: Wendell Potter, author and former health insurance executive, thanks very much.

WENDELL POTTER: Thank you.

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