The Will Ferrell Video - Actually Not A Parody

The video I linked earlier with Hollywood celebrities coming out to defend those poor insurance companies has gone viral, with hundreds of thousands of views today. What's a little less-known is that prominent Republicans are basically engaging in a note-for-note remake of that video, leaping to the defense of that industry which has turned in record profits, raising premiums even during the Great Recession and saving money by denying Americans care.

Here's the story so far: yesterday the Department of Health and Human Services launched an investigation into Humana for sending its elderly customers a mailer warning that they would lose benefits under the new health insurance reform plan. Interestingly, Max Baucus, yes that Max Baucus, registered the complaint that triggered the investigation. The whole thing concerns Medicare Advantage payments:

Humana is one of the largest private carriers serving seniors under a program called Medicare Advantage. About one-fourth of the elderly and disabled people covered under Medicare participate in the Advantage program, which offers a choice of private plans that usually deliver added benefits.

Humana has about 1.4 million Medicare Advantage enrollees, and the program accounts for about half the company's revenue, Noland said.

Government experts say the private plans are being paid too much — about 14 percent more than it costs to care for seniors in traditional Medicare. The Baucus plan — and other proposals — would reduce payments to the plans, and the health insurance industry is fighting back.

The Humana mailer focused squarely on the Medicare Advantage program.

Actually the Medicare Advantage plans cost the government about 14% more and deliver less than traditional Medicare, according to the Government Accountability Office. We are subsidizing private industry billions of dollars so they can perform the exact same task as Medicare, and with lower quality.

The mailer that Humana sent to beneficiaries, designed to look like official communication with customers and not naked lobbying documents, wasn't all; a website which generated automatic emails to members of Congress, claiming to be from customers (despite the fact that anyone could generate an email), is also being probed. And of course, this is not the only example of insurance companies filling their customers' heads with misinformation and turning them into citizen lobbyists.

Of course, the industry went into full-on whine mode as a response, with Republican leaders right behind them.

A spokesman for America's Health Insurance Plans, the industry's main lobbying group, issued a statement Tuesday criticizing what he described as the government's "gag order."

"Seniors have a right to know how the current reform proposals will affect the coverage they currently like and rely on," AHIP spokesman Robert Zirkelbach said.

Sen. Mitch McConnell of Kentucky, the Senate's Republican leader, denounced the HHS order as an attempt to squelch free speech.

"We cannot allow government officials to target individuals or companies because they do not like what they have to say," McConnell said.

"Is this what we believe as a Senate -- that this body should debate a trillion-dollar health care bill that affects every American while using the powerful arm of government to shut down speech?" McConnell said.

McConnell noted that Humana, an insurer at the center of the controversy, is based in his home state. The company has been a large contributor to McConnell, donating $112,452 over his career, according to Eric Schultz, communications director for the Democratic Senatorial Campaign Committee. (emphasis mine)

Shocking that Mitch McConnell would leap to the defense, Will Ferrell-style, of a health insurer based in his state which has feathered his nest to the tune of six figures, no?

There is a difference between free speech issues and what Humana and others are doing, namely violating federal law. Medicare Advantage providers are contracted employees of the federal government, and under the terms of Medicare Advantage, providers have strict limits on what they can communicate to beneficiaries. This lobbying effort would appear to violate those guidelines, and those customers receiving this letter could be excused for believing it to be an official document warning of loss of benefits if they failed to take action.

In short, Medicare Advantage is a wasteful corporate welfare program providing no benefit to individual subscribers and actually worse quality of care to seniors, at a cost of around $150 billion over 10 years to the taxpayer. The government has no imperative to keep such a scheme going, and they certainly shouldn't be paying providers to send misleading letters to their customers so they can keep the gravy train going.

But the real amusement here is watching Republicans like Mitch McConnell read from the Will Ferrell script and crying to "leave health insurance CEOs alone," as if they don't get enough help from the taxpayers to fund their lavish lifestyles.

NYT's Insurance Industry Tearjerker Tries To Change The Subject From Industry Practices

The New York Times published a very nice press release from the desk of Humana, one of the nation's largest health insurance companies. The reporter interviewed a bunch of employees at Humana, all of whom were horrified to see themselves depicted as "villains" in the health care debate. I agree with Yves Smith, this is an absurd angle for a story, an extreme example of selection bias. The people who work at Humana probably have a sense that their employer, um, pays their salary, and thusly, what's good for the employer is probably good for them. Similarly, most people hold a favorable opinion of themselves just as a matter of getting through the day. Not to mention the fact that their understanding of the functioning of Humana is limited to their job description. It is not possible to gain much of a perspective on the health care debate or industry practices by asking a midlevel manager "Do you think you're the worst person alive?"

Since when is it legitimate, much the less newsworthy, to get a company's perception on its embattled status, at least without introducing either some contrary opinion or better yet, facts, to counter the views of people who will inevitably see what they are doing as right? I hate to draw an extreme comparison to make the point, but staff in Nazi concentration camps also thought they were good people. It is well documented that for all save the depressed, people's assessments of their own behavior is biased in their favor.

There is some revelatory stuff in the article, however. David Sirota flags one employee saying that Humana believes in keeping down costs by "controlling utilization":

Now, I know we're supposed to think that private for-profit health care companies don't ration care, while government-run programs like Medicare do - but as the insurance industry admits right here for all to see, that's just not the case. The obvious truth is that the health insurance industry works hard to "control utilization" - that is, it works hard to make sure that when you need a costly medical service, you are "controlled" (read: prevented) from getting it.

Sure, we're all against excessive testing - and there are good ways to deal with those inefficiencies. But that's not what the insurance industry is talking about. It is talking about its practice of rationing care - and now that reality is right there in black and white for all to see.

The truth of the matter is that many of the charges that insurance companies like WellPoint level at the public option and regulatory changes sought in the health reform bill mirror accepted industry practices. WellPoint, which emailed its own customers yesterday attacking the Democratic plan, claimed that health reform will “increase the premiums of those with private coverage.” Yet WellPoint routinely hikes their own premium prices by close to double digits annually, leading to ever-increasing profits. The email stated that millions of Americans would lose their private coverage and be forced onto a government-run option if the Democratic bill passed (nothing could be further from the truth); yet WellPoint routinely uses the practice of rescission to drop their own customers from coverage if they ever try to use it, and they've admitted they would continue doing so unless forced to stop by law.

The email is an example of the astroturf practices from the industry, including, no doubt, pitching to the New York Times a story putting the human face on insurers. Many of these astroturf efforts spring from the same sources as the corporate lobby groups activating the tea party protests at town hall meetings throughout the country this August. They're trying to change the subject, away from facts, like how they're spending less of their premium revenue on medical care over the years, from 90% in the early 1990s to around 80% today. Or how they use rescission and pre-existing condition to make profits off cherry-picking the healthy and denying everyone else care. House and Senate leaders have requested more and more information about insurance company practices; Dennis Kucinich has joined that effort. But the insurance industry, while nominally siding with reform, wants to keep the focus on efforts against it, in service to de-fanging it.