Waxman's Gambit

Henry Waxman's move to ask insurance companies for their records on compensation and perks is as consequential a move as any member of Congress has made in the fight over health care reform, because it has the potential to change the entire narrative around the issue. It's seen as so successful on Capitol Hill, in fact, that Jay Rockefeller is supplementing it.

A U.S. Senate Democrat asked the top 15 health insurers to explain what portion of premiums go to profits versus patient care, putting further pressure on the companies to explain their business practices as Congress considers sweeping health reform legislation.

In letters to the companies on Friday, Sen. John Rockefeller also asked for information about how insurers disclose financial practices to customers [...]

"Too often consumers are not getting a fair deal for what they pay, they are not getting the protections they deserve, and the insurance companies are awash in profit," Rockefeller, chairman of the Senate Commerce, Science and Transportation Committee, said in a statement.

The letters were sent to companies including UnitedHealth Group, Wellpoint and Aetna, the committee said.

Robert Zirkelbach, a spokesman for the health insurance lobby AHIP (America's Health Insurance Plans), dismissed the Rockefeller probe as a way to "shift the focus" to the insurance industry. I think Rockefeller and Waxman would argue that the insurance industry deserves such a focus.

Waxman actually initiated his investigation back in July, right around the time he was negotiating with House Blue Dogs over concessions in his bill in the Energy and Commerce Committee. At the time, he was responding to examples of astroturf (fake grassroots) efforts performed by the insurance companies. Seeing the ferocity of their efforts, Waxman surely assumed that the industry was concerned primarily with protecting profits over being any kind of partner for reform.

Earlier this week, Waxman sent letters requesting detailed financial information including compensation, revenue and profit numbers to 52 insurance companies with annual premiums greater than $2 billion.

But nearly a month earlier, on July 21, Waxman and Investigations Subcommittee Chairman Bart Stupak sent letters to AHIP and Dewey Square Group asking for emails and internal documents about a news report in April that several senior citizens had not written letters to the editor submitted under their names.

Waxman’s committee’s spokeswoman said Waxman was merely trying to gather information critical to the health care debate.

“If we're going to get health costs under control, we need to make sure that our private health insurance dollars are spent as efficiently as possible. That means our premium dollars should be paying hospitals and physicians for providing health care, not wasting resources on administrative bloat,” she said.

The connection between the astroturfing campaigns, which industry is paying millions to lobbyists to conduct, and industry profits is obvious. Those campaigns to weaken the health care reform bill are being carried off using customer premiums.

The results of the Rockefeller and Waxman probes are due right when the House and Senate return from recess. If used skillfully, these reports can weave a narrative - whether industry participates in them or not - of insurance company excess at a time when the system is broken and millions have been denied coverage. And despite the AHIP mouthpiece's claims, this "shifts the debate" to where it ought to be - not on mythical stories and smears about reform, but about the fundamental choice between filling the pockets of an already bloated insurance industry or providing for the general welfare of all Americans. While I'm well aware that insurers are not the only problem with the health care system, they are the one actor that adds nothing of value to the process, and changing their incentives, toward lower cost and better quality instead of how to deny care, will have an impact on the system at large.