Former P.R. Chief for Cigna Urges U.S. Lawmakers to Include Government Option in Reform

By Fran Matso Lysiak
A. M. Best
June 26, 2009


WASHINGTON, D.C., Jun 26, 2009 (A. M. Best via COMTEX) -- The former head of public relations for Cigna Corp. traveled to Capitol Hill, urging federal lawmakers to include a government health insurance plan option for Americans as part of comprehensive health reform legislation they're now fiercely debating.

Wendell Potter, who worked as a senior executive at health insurance companies for 20 years, with the last 15 at Cigna (NYSE: CI), testified June 24 before the U.S. Senate Committee on Commerce, Science and Transportation. He told the committee he "saw how they confuse their customers and dump the sick -- all so they can satisfy their Wall Street investors." Before Cigna, he headed communications at Humana Inc. (NYSE: HUM).

He voiced his support for S. 1278, the Consumers Choice Health Plan, which would create a public insurance option. The industry and its supporters, he said, "are using fear tactics, as they did in 1994, to tar a transparent, publicly accountable health care option as a 'government-run system,'" said Potter, according to a copy of his prepared remarks.

Potter, who retired from the Philadelphia-based Cigna last year, is now senior fellow on health care for the Center for Media and Democracy, a nonprofit, public interest organization.

"When I left my job as head of corporate communications for one of the country's largest insurers, I did not intend to go public as a former insider," Potter told the Senate Committee. "However, it recently became abundantly clear to me that the industry's charm offensive -- which is the most visible part of duplicitous and well-financed PR and lobbying campaigns -- may well shape reform in a way that benefits Wall Street far more than average Americans."

In response to Potter's testimony, Cigna, in a statement, said the United States is engaged in an important debate about how to improve its health care system. "Although we respect that there are different opinions on the solutions, we strongly disagree with the suggestion that, motivated by profits, the insurance industry has deliberately attempted to confuse or unfairly treat covered individuals," the company said.

About a week earlier, Karen Ignagni, president and chief executive officer of America's Health Insurance Plans, and Scott Serota, president and CEO of the Blue Cross and Blue Shield Association, wrote to Sen. Edward Kennedy, D-Mass, chairman of the Senate Committee on Health, Education, Labor and Pensions, urging his committee to not add a government-run health insurance plan option that would compete with private insurers in the "Affordable Health Choices Act" legislation his committee recently proposed.

Employers, providers and patients also have raised concerns about the "unintended consequences" of such a plan, they wrote. The government plan option "would have devastating consequences on the heath insurance coverage that employers and individuals currently have, the federal budget deficit and existing providers," Ignagni and Serota wrote. "We do not believe that it is possible to create a government plan that could operate on a level playing field."

During his testimony, Potter said Wall Street investors and analysts eye two key figures in health insurers' quarterly earnings reports -- earnings per share and the medical-loss ratio.

"To help meet Wall Street's relentless profit expectations, insurers routinely dump policyholders who are less profitable or who get sick," Potter said, pointing to policy rescissions. "They look carefully to see if a sick policyholder may have omitted a major illness, a pre-existing condition, when applying for coverage, and then they use that as justification to cancel the policy, even if the enrollee has never missed a premium payment."

Potter also charged that health insurers "purposely mislead" customers in marketing certain health plans, such as high-deductible, consumer-driven plans and limited-benefit plans, as policies that "offer only the illusion of comprehensive coverage." These plans are why an estimated 25 million people are under-insured, Potter contended.

Cigna said it's committed to improving the current system, which is why, from the beginning, it consistently supported "a requirement for all to participate; guaranteed coverage at the same rates regardless of whether or not someone has a pre-existing illness; and the creation of a minimum benefits design."

In a statement, AHIP said it continues to be focused on advancing comprehensive health care reform that addresses the health care concerns it heard from the American people. 

"Our community has proposed overhauling the market rules and enacting new consumer protections so nobody is left out, simplifying health care choices for individuals and small businesses, and reforming the delivery system to improve the quality and affordability of health care coverage," the group said.

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