PART ONE

How Bad Things Are in America

How the Insurance Industry Bought Joe Lieberman and Killed the Public Option

Want to deny affordable health insurance to millions, leading to thousands of unnecessary and/or early deaths, all in order to keep your profits high? Just hand Joe Lieberman $1,182,070 over the course of his political career and you own the guy. He’ll make sure to kill a public option, all with a smile.1

As Paul Begala wrote of the time Lieberman killed the Obamacare public option, “Connecticut Senator Joe Lieberman is identified as (I-CT). But the ‘I’ does not stand for ‘Independent.’ It stands for ‘Insurance Industry.’”2

New York Times staff writer David E. Rosenbaum reported, about a previous Lieberman pro-insurance-industry action in 2000, “Many of Mr. Lieberman’s friends said he had no alternative but to take this position because it was the one favored by the insurance industry. The industry is important to Connecticut’s economy and has generously donated to Mr. Lieberman’s campaigns over the years.”3

And, of course, it’s not just Joe Lieberman. Every single Republican in both the US House and Senate voted against President Barack Obama’s plan to provide affordable health insurance to every American, and odds are, every single one of them was well rewarded for the effort.

That said, the Affordable Care Act was always an unnecessarily complex Rube Goldberg effort.

President Obama and his Democratic colleagues knew that if they tried to offer the American public any sort of non-profit or Medicare for All health coverage, the trillion-dollar for-profit insurance, hospital, and pharmaceutical industries would unleash a scorched-earth campaign against them, from which many would never politically recover.

Conservatives on the US Supreme Court in 1976, 1978, and 2010 radically rewrote American campaign finance law to give billionaires and large, powerful industries political life-and-death power over even the most august of politicians.4

Ever since Senator Bernie Sanders of Vermont raised the profile of Medicare for All, dozens of Democratic politicians have candidly said, some to me in private and a few in public, that it would be a great thing for the American people, would save hundreds of billions of dollars a year, and would save lives . . . but can’t pass because it’s “politically impossible.”

That’s code for our elected representatives lacking the power to overcome multimillion-dollar pressure campaigns launched by well-funded and highly profitable corporations and the think tanks and media organizations that also take their money.

As a result, any sort of reform that didn’t increase profits for the largest industries—particularly the health insurance industry—was doomed to fail, at least during normal times. Thus, President Obama took the plan that the Heritage Foundation, a conservative think tank, had put together in the 1980s,5 which Mitt Romney put into place as governor of Massachusetts in 2006.6

It was an improvement on the status quo, but only a slight one.

Obamacare: Rube Goldberg Meets Health Insurance

As with most politicians interested in producing the best healthcare outcomes for the nation at the lowest cost, there was a time in his political career that Illinois state senator Barack Obama was an outspoken advocate for a national single-payer Medicare for All type of health insurance system like Canada’s.

“I happen to be a proponent of a single-payer universal healthcare program,” Obama said in a June 30, 2003, speech.

“I see no reason,” he added, “why the United States of America, the wealthiest country in the history of the world, spending 14 percent of its gross national product on healthcare, cannot provide basic health insurance to everybody. And that’s what Jim is talking about when he says everybody in, nobody out. A single-payer healthcare plan, a universal healthcare plan. That’s what I’d like to see.”7

By the time he was running for president in 2008, his need for campaign cash from wealthy corporate-related donors had grown and his thoughts had “evolved.”

“What are not legitimate concerns are those being put forward claiming a public option is somehow a Trojan horse for a single-payer system,” Obama told the American Medical Association on June 15, 2009, half a year into his first term.

“I’ll be honest,” he said. “There are countries where a single-payer system may be working. But I believe—and I’ve even taken some flak from members of my own party for this belief—that it is important for us to build on our traditions here in the United States. So, when you hear the naysayers claim that I’m trying to bring about government-run healthcare, know this—they are not telling the truth.”8

Instead of Medicare for All, Obama suggested what 2016 Democratic presidential candidate Pete Buttigieg called “Medicare for Anybody Who Wants It,” also known as the “public option.”

Additionally, he suggested expanding Medicaid and having the state governments administer health insurance portals to make buying for-profit health insurance more convenient (since he was going to require everybody in the country not covered by Medicaid to purchase this product), along with government-funded subsidies for part of the premium costs.

The federal government subsidies would have the effect of keeping the multibillion-dollar profits of the for-profit health insurance companies high, while not inflicting the entire expense on taxpayers/consumers.

He campaigned for president in 2008 on what came to be known as Obamacare or, more properly, the Affordable Care Act, and the public Medicare option part of his plan brought along enough of the progressive Democratic base that this virtually unknown Midwestern politician was able to defeat the massively funded and establishment-supported Clinton machine to take the Democratic nomination and then the White House.

Even half a year into his first term, President Obama continued to promote the idea of everybody in America being able to choose to purchase Medicare instead of a for-profit plan from one of the giant insurance corporations.

On July 18, 2009, for example, he said, “Any plan I sign must include an insurance exchange—a one-stop-shopping marketplace where you can compare the benefits, costs and track records of a variety of plans, including a public option to increase competition and keep insurance companies honest.”9

House Speaker Nancy Pelosi was totally behind the public option and even brought former Aetna insurance industry executive Wendell Potter to testify before Congress on its behalf. He wrote in 2015,

In an effort to keep the public option idea alive, House Speaker Nancy Pelosi invited me to testify during a Sept. 16, 2009, meeting of the Democratic Steering and Policy Committee Forum on Health Insurance Reform.

Knowing the industry as I did, I told the committee that if Congress failed to create a public option to compete with private insurers, “the bill it sends to the President might as well be called ‘The Insurance Industry Profit Protection and Enhancement Act.’” Pelosi insisted that Congress had no intention of [failing to include a public option].10

True to her word, Speaker Pelosi got the bill through the House of Representatives with the public option intact. But she had no control over the US Senate, where Joe Lieberman became the deciding vote, and he chose to kill the Medicare option, presumably at the behest of his funders.

As Lieberman told Fox News: “A public option plan is unnecessary. It has been put forward, I’m convinced, by people who really want the government to take over all of health insurance.”11

And we definitely can’t have that. After all, it may make us as efficient and effective at delivering healthcare as the rest of the developed world and save millions of lives over a few decades . . . but would cut off the hundreds of millions of dollars that health insurance industry executives take home every month. And, probably too, it would cut off their campaign contributions.

Wendell Potter: A Good Man in a Bad Job

Killing other people is probably the greatest taboo among humans, even when done indirectly or by proxy; it’s why murder is the plot device for so many novels, TV shows, and movies. We’re fascinated by things that are so grotesque, so far out of the everyday experience, so frightening, that most of us can barely imagine them in our own lives.

Yet far outside the realm of mobsters, warriors, and hit men, our nation harbors a small but very affluent class of people who take actions every day—proactive, knowing, intentional actions—that contribute to the deaths of their fellow Americans.

Wendell Potter was one of those people until he was so overwhelmed by his conscience that he resigned his solidly six-figure salary to take on the very corporations that had paid him to promote policies that led to other people’s deaths.

In his 2010 book Deadly Spin, Potter tells the story of his awakening, the moment that pushed him over the edge from being a health insurance industry insider to a whistleblower.12

It was March 5, 2009, and President Obama was promoting what would become the Affordable Care Act. Potter, then the director of public relations at health insurance behemoth CIGNA, was “channel surfing for some news about [Obama’s] healthcare reform summit . . . at the White House that day.”

On MSNBC, host Tamron Hall was interviewing Zach Wamp, then Tennessee’s Third District representative in the US House. “It’s probably the next major step towards socialism,” Wamp told Hall and the TV audience. “[T]his is literally a fast march towards socialism where the government is bigger than the private sector in our country, and healthcare’s the next major step, so we ought all be worried about it.”

Wamp then turned his rhetorical guns directly on low-income Americans and undocumented immigrants.

“The forty-five million people that (sic) don’t have health insurance,” he said, “about half of them choose not to have health insurance. . . . How many illegal immigrants are in this country today, getting our healthcare? Gobs of ’em!”

Potter felt his stomach drop. “As I listened to Wamp’s rant,” he wrote, “I knew exactly where he’d gotten his talking points: from me.

“He was using the same misleading, intentionally provocative, and xenophobic talking points that I had helped write.”

Potter had served not only as the head of PR for CIGNA but also as a member of the Strategic Communications Advisory Committee for AHIP (America’s Health Insurance Plans), the industry’s largest trade and lobbying group; it was in that capacity that he’d written much of what had become Wamp’s talking points.

That same night, AHIP’s president, Karen Ignagni, also showed up on TV, telling President Obama how the insurance industry was on board with his effort.

“We want to work with you,” she told Obama. “You have our commitment. We hear the American people about what’s not working. We’ve taken that seriously.” The industry had billions in profits at stake and, with Ignagni, was rolling out the biggest of the big guns.

“Ignagni,” Potter wrote, “is one of the most effective communicators and—with a salary and bonuses of $1.94 million in 2008—one of the highest-paid special interest advocates in Washington. . . . She is smart, telegenic, articulate, charming, a strong leader, and a brilliant strategist. . . . Princeton economist Uwe Reinhardt commented, ‘Whatever AHIP pays her is not enough.’”

Like Potter at that time, she was another of that small group of people who are more than willing to take money to promote policies that lead to the deaths of tens of thousands of Americans every year, according to Harvard University.13 All to enhance corporate profits.

While watching Wamp use his talking points and seeing his AHIP boss, Ignagni, essentially lie to Obama marked the decision point for Potter, the process, for him, had begun a bit earlier, in December 2007, when his company, CIGNA, had refused to pay for a liver transplant for a Los Angeles teenager named Nataline Sarkisyan.

Her community had come together to protest CIGNA’s decision, and the protests were picked up by a prominent local TV station, KTLA; from there the story went national.

Potter, as head of PR for CIGNA, took it on, although in this case it was so obvious that the insurance company’s decision was a PR disaster that he argued within the company that they should just pay for Nataline’s transplant and have done with it.

“For the first time, I started paying close personal attention to the case,” Potter wrote in Deadly Spin. “As the father of a daughter just three years older than Nataline, I couldn’t help putting myself in their shoes, wondering what life would be like for my wife and me if we were fighting with an insurance company to get it to cover a lifesaving transplant for our daughter, Emily. Just thinking about it caused me to ache.”

Potter escalated the issue to his CIGNA boss, Carol Ann Petren, arguing that the company should just pay for the transplant and end the whole crisis.

Petren took it to CIGNA’s CEO, Ed Hanway. They brought in CIGNA Healthcare’s president, David Cordani, and the company’s chief medical officer, Jeffrey Kang, MD.

All backed the company’s decision to let Nataline die rather than pay for her transplant, so Potter’s next step was to reach out to Kekst & Company, a PR firm that specialized in dealing with publicly traded companies in the midst of a PR crisis.

Nataline had now been waiting several days for the transplant, and a donor liver that would have been “perfect” had gone to another person because the hospital wouldn’t operate as long as CIGNA refused to pay. Time was not on her side.

She was a Girl Scout and a popular student, and had dreams of becoming a fashion designer. Her parents were Armenian immigrants, and she spoke both English and Armenian fluently, so she volunteered with the Armenian Youth Federation to help kids with both languages.

As the story blew up in the media, the country learned that she prayed with her mother every night. “Just the two of us,” her mother told the press. “We never missed a night.”

To keep her spirits up during this ordeal with CIGNA, her father promised to buy her a white Ford Mustang when she graduated from high school.

Nataline’s story by now had gone viral, with people across the country praying for her and organizing mass calls into CIGNA’s various offices on her behalf.

Larry Rand, one of Kekst’s founders, was blunt with CIGNA’s senior executives. “Look, Carol, you have to make this go away,” he told Petren in an emergency conference call. “Approve the transplant—now.”

That call persuaded them to overrule their own policies and slightly dent corporate profits, just this one time, to save this particular teenager’s life.

Writing that he was “relieved . . . for Nataline’s family,” Potter said he felt like a load had been lifted.

“I imagined how joyous and hopeful my wife and I would be,” he wrote, “to hear from our insurance company—which would be CIGNA—that a procedure that might save [my daughter] Emily’s life had been given ‘clearance.’”

He tried to reach out to Nataline’s family to let them know the good news, but they were at a protest put on by the California Nurses Association, headed by RoseAnn DeMoro. It took a few hours, but he finally got the good news to them, and the hospital began preparations for the surgery.

“But a few minutes after 10 p.m.,” Potter wrote, “my phone rang at home. There would be no need for CIGNA to cover the transplant after all. Nataline had just died.”

A few days later, Nataline was buried in a white coffin, a demand from her father, who was heartbroken that he’d never be able to give her the white Mustang he’d promised her.

The family hired “lawyer to the stars” Mark Geragos, who called for CIGNA to be prosecuted for murder or, at the least, manslaughter, as Nataline had been “maliciously killed” by the company and its executives’ decisions. (Unfortunately, the industry long ago paid members of Congress enough that they wrote immunity from such lawsuits into federal laws that are so strong as to preempt state murder laws, as Potter documents in his book.)

“It finally dawned on me,” Potter wrote, “that in my own quest for money and prestige, I had sold my soul.”

He’d earlier seen an article in Architectural Digest about the 24-room mansion that CIGNA’s former CEO, Wilson Taylor, had built in the hills of eastern Pennsylvania. There was even “a separate ‘grandchildren’s cottage’” with “stone columns imported from Europe.” Taylor’s salary had been $24 million in his last year, which didn’t even include his stock options, traditionally the largest part of a CEO’s compensation.

“When I read that article and saw the stunning pictures of Taylor’s new place,” Potter wrote, “it became clear to me, in ways that it hadn’t before, that people enrolled in CIGNA’s insurance plans had actually helped pay for that twenty-four-room stone manse with its seventeenth-century Spanish columns and its impossibly French kitchen.”

It was paid for in large part with the money CIGNA kept by saying no to people needing medical care and then standing by as they deteriorated and died.

Potter’s final job for CIGNA was announcing that, for the first three months of 2008, the company had brought in $4.6 billion in revenues and skimmed $265 million off the top as profit, in addition to other millions that went to the company’s senior executives.

I’ve known Wendell Potter for over a decade now; he’s a good and decent man who deeply regrets his role in what is arguably one of the most corrupt industries in the United States.

“I was a beneficiary of a lot of money that was paid to someone whose job doesn’t even exist in most other countries,” he told me on the radio some years ago.

Potter’s current incarnation is starting, building, and running a news site with an emphasis on issues of health and labor; he named it Tarbell.org after Ida Tarbell, who pioneered investigative journalism (then called “muckraking”) during the Gilded Age and wrote the definitive book on the most corrupt corporation of that era, John D. Rockefeller’s Standard Oil.

With her help and exposé, the US government broke up Rockefeller’s monopoly and returned some sanity to the oil business. Potter is today trying to do the same with healthcare.

“Dollar Bill” McGuire and the Privatization of Medicare

A billion dollars is a mind-bending amount of money. It’s a million dollars a thousand times—more money than any human being could possibly need to live a full and satisfying life, and enough to ensure that children, grandchildren, and generations to come will never, ever have to work. It’s dynastic money.

Yet that’s what you can make in healthcare in America if you’re willing to say to sick people, “No, I won’t pay for that surgery or medication even though it may save your life.”

“‘Dollar Bill’ has made lots of news with cash-and-stock paydays that have topped $100 million in recent years—and he’s still sitting atop stock options valued at $1.6 billion,” wrote Neal St. Anthony in 2007 for the Minneapolis Star-Tribune, the largest newspaper in UnitedHealth’s home state of Minnesota.14

“Dollar Bill” was Bill McGuire, then the CEO of United-Health, the nation’s largest health insurance operation. And although trained as a physician, McGuire didn’t make his money healing anybody.

On the contrary, he made that money by aggressively enforcing the fine print in his company’s contracts with people who’d bought health insurance from UnitedHealth, particularly that fine print that talked about preexisting conditions, lifetime caps, not paying “out-of-network expenses,” and requiring doctors and hospitals to jump through a never-ending series of exhausting hoops to get “authorization” to treat sick people.

Not to mention his (and his senior executives’) manipulation of stock options; after all, if you’re going to run a grift on your customers, why not do the same to your shareholders?

The Wall Street Journal pointed out in March 2006 that McGuire had backdated some of his stock options, increasing his income by hundreds of millions in what the Journal called “one of the most lucrative stock-option grants ever.”15

The Securities and Exchange Commission later agreed, and as Reuters reported the following year, McGuire had to “forfeit more than $400 million in stock options and other compensation and pay a $7 million fine to settle an investigation into the health insurer’s options practices.”16

In 2003, President George W. Bush and his congressional Republicans gave UnitedHealth a huge gift (which good-government advocates would argue was in exchange for massive lobbying and campaign contributions, so it was more of a quid pro quo). They carved a hole in Medicare, the government healthcare payment system for people over 65, and let private for-profit health insurance companies fill it.

This semi-privatization of Medicare was called Medicare Part C, or Medicare Advantage. Although it has the name “Medicare,” it’s not Medicare. It’s private, for-profit insurance, with almost all of the costs paid for with funds extracted from the government’s Medicare trust fund.

While Dollar Bill left UnitedHealth in 2006 with his billion-plus dollars (and a trail of dead and dying customers), the company jumped into Medicare Advantage with the same gusto for making money as it had under McGuire’s stewardship.

The headline from Kaiser Health News, the gold standard publication for reporting on the healthcare industry in America, says it all: “UnitedHealth Doctored Medicare Records, Overbilled U.S. by $1 Billion, Feds Claim.”17

In a massive fraud reminiscent of Republican Senator Rick Scott’s 1990s tenure as CEO of Columbia/HCA, the hospital group that had to pay the government $1.7 billion for Scott’s company’s Medicare fraud,18 UnitedHealth ripped off America in a way that could only be described as breathtaking. Or at least second only to Rick Scott.

“In a 79-page lawsuit filed in Los Angeles,” Kaiser Health News reported, “the Justice Department alleged that the insurer made patients appear sicker than they were in order to collect higher Medicare payments than it deserved. The government said it had ‘conservatively estimated’ that the company ‘knowingly and improperly avoided repaying Medicare’ for more than a billion dollars over the course of the decade-long scheme.”19

The “Advantage” War against Medicare

Medicare Advantage is a massive, trillion-dollar rip-off, of the federal government and of taxpayers, and of many of the people buying the so-called Advantage plans.

It’s also one of the most effective ways that insurance companies could try to kill Medicare for All, since about a third of all people who think they’re on Medicare are actually on these privatized plans instead.

Nearly from its beginning, Medicare has allowed private companies to offer plans that essentially compete with it, but they were an obscure corner of the market and didn’t really take off until the Bush administration and Republicans in Congress rolled out the Medicare Modernization Act of 2003. This was the big chance for the GOP (and a few corporatist Democrats) to finally privatize Medicare, albeit one bite at a time.

That law created a brand known as Medicare Advantage under the Medicare Part C provision, and a year later it phased in what are known as risk-adjusted large-batch payments to insurance companies offering Advantage plans.

Medicare Advantage plans are not Medicare. They’re private health insurance most often offered by the big for-profit insurance companies (although some nonprofits participate, particularly the larger HMOs), and the rules they must live by are considerably looser than those for Medicare.

Even more consequential, they don’t get reimbursed directly on a person-by-person, procedure-by-procedure basis. Instead, every year, Advantage providers submit a summary to the federal government of the aggregate risk score of all their customers and, practically speaking, are paid in a massive lump sum.

The higher their risk score, the larger the payment. A plan with mostly very ill people in it will get much larger reimbursements than a plan with mostly healthy people. After all, the former will be costly to keep alive and healthy, while the latter won’t cost much at all.

Profit-seeking insurance companies, being the predators that they are, have found a number of ways to raise their risk scores without raising their expenses. The classical strategies of tying people to in-network providers, denying procedures routinely during first-pass authorization attempts, and having very high out-of-pocket caps are carried over from regular health insurance systems to keep costs low and profits high.

But with Medicare Advantage, the big insurance companies have invented a whole new way to rip us all off while padding their bottom lines.

For example, many Medicare Advantage plans promote an annual home visit by a nurse or physician’s assistant as a “benefit” of the plan. What the companies are doing, though, is trying to upcode their customers to make them seem sicker than they are to increase their overall Medicare reimbursement risk score.

“Heart failure,” for example, can be a severe and expensive condition to treat . . . or a barely perceptible tic on an EKG that represents little or no threat to a person for years or even decades. Depression is similarly variable; if it lasts less than two weeks, there’s no reimbursement; if it lasts longer than two weeks, it’s called a “major depressive episode” and rapidly jacks up a risk score.

The home health visits are designed more to look for illnesses or codings that can increase risk scores than to find conditions that require medical intervention. They’re so profitable that an entire industry of sending nurses out on behalf of the smaller insurance companies has sprung up.

In summer 2014, the Center for Public Integrity (CPI) published an in-depth investigative report titled Why Medicare Advantage Costs Taxpayers Billions More Than It Should.20

They found, among other things, that one of the most common scams companies were running involved that very scoring of their customers as being sicker than they actually were, so that their reimbursements were way above the cost of caring for those people.

Here are a few points from the report:

“Risk scores of Medicare Advantage patients rose sharply in plans in at least 1,000 counties nationwide between 2007 and 2011, boosting taxpayer costs by more than $36 billion over estimated costs for caring for patients in standard Medicare.”

“In more than 200 of these counties, the cost of some Medicare Advantage plans was at least 25 percent higher than the cost of providing standard Medicare coverage.”

The report documents how risk scores rose twice as fast for people who joined a Medicare Advantage health plan as for those who didn’t.

Patients, the report lays out, never know how their health is rated because neither the health plan nor Medicare shares risk scores with them—and the process itself is so arcane and secretive that it remains unfathomable to many health professionals.

“By 2009, government officials were estimating that just over 15 percent of total Medicare Advantage payments were inaccurate, about $12 billion that year.”

Based on its own sampling of data from health plans, the report shows how CMS has estimated that faulty risk scores triggered nearly $70 billion in what officials deemed “improper” payments to Medicare Advantage plans from 2008 through 2013.

CMS decided, according to the report, not to chase after overcharges from 2008 through 2010 even though the agency estimated through sampling that it had made more than $32 billion in “improper” payments to Medicare Advantage plans over those three years. CMS did not explain its reasoning.

The report documents how Medicare expected to pay the health plans more than $150 billion in 2014, the year the study was published.21

Companies are almost never nailed for these overcharges, and when they are, they usually pay back pennies on the dollar.

For example, when the Office of Inspector General, Health and Human Services (which oversees Medicare), audited six out of the hundreds of plans on the market in 2007, they found that just those six companies “had been overpaid by an estimated $650 million” for that one year. As the Center for Public Integrity states, “CMS settled five of the six audits for a total repayment of just over $1.3 million.”22

The Centers for Medicare and Medicaid Services also, in 2012, decided to audit only 30 plans a year going forward. As CPI noted, “At that rate, it would take CMS more than 15 years to review the hundreds of Medicare Advantage contracts now in force.” And that’s 15 years to audit just one year’s activity!

Things haven’t improved since that 2014 investigative report from CPI. In September 2019, Senator Sherrod Brown of Ohio and five Democratic colleagues sent a letter to President Donald Trump’s CMS administrator, Seema Verma.

“The recent HHS Payment Accuracy Report exposes that taxpayers have overpaid Medicare Advantage plans more than $30 billion . . . over the last three years,” Brown wrote. “This report comes on the heels of a 2016 Government Accountability Office (GAO) report and a 2013 GAO report on [Medicare Advantage] plan overcharges and the failure of the Centers for Medicare and Medicaid (CMS) to recoup billions of dollars of improper payments from MA plans.”23

Meanwhile, during the four years of the Trump administration, CMS went out of their way to illegally promote Medicare Advantage plans (which typically cost CMS far more than a regular Medicare plan).

A February 2020 report in the New York Times stated, “Under President Trump, some critics contend, the Centers for Medicare and Medicaid Services, which administers Medicare, has become a cheerleader for Advantage plans at the expense of original Medicare.”24

The report pointed to the draft release of the 2019 Medicare & You handbook, which is mailed every year to all enrollees and posted online. “Advocates and some lawmakers criticized language describing Advantage as a less expensive alternative to original Medicare.”

The National Bureau of Economic Research (NBER) compared Medicare Advantage with traditional Medicare and found the Advantage programs to be mind-bogglingly profitable: “MA insurer revenues are 30 percent higher than their healthcare spending. Healthcare spending for enrollees in MA is 25 percent lower than for enrollees in [traditional Medicare] in the same county and [with the same] risk score.”

At the same time, Medicare Advantage often screws its customers. According to the NBER study, people with Medicare Advantage got 15 percent fewer colon cancer screening tests, 24 percent fewer diagnostic tests, and 38 percent fewer flu shots.25

Speculation is rife as to why CMS would allow—much less promote—privatized plans that cost Medicare far more than original Medicare to rip off taxpayers to the tune of billions of dollars a month.

One possibility is regulatory capture—people working in CMS know that if they go along and get along, very well-paid jobs are waiting for them at for-profit insurance companies after a few years of government service. This is a chronic problem at other regulatory agencies, particularly those overseeing pollution, pharmaceuticals, telecommunications, and banking.

Another answer is that the Bush administration—where Medicare Advantage started—was so enamored of the idea of privatizing Medicare to eventually destroy the program (George W. Bush campaigned extensively from the late 1970s through his presidency to privatize both Social Security and Medicare) that they turned a blind eye to abuses.

The Obama administration had other priorities, as they were trying to push through the Affordable Care Act and didn’t want to upset the apple cart. And when Trump came into power, his folks saw anything that drained resources out of Medicare and into the pockets of multimillionaire health insurance executives—a group notoriously generous when it comes to making political contributions—as a plus.

You Are Locked-in to Medicare Advantage

A fellow I’d known decades ago recently bubbled back into conversation among a few of us who’d hung out together in New York back in the 1970s. Sam, I’ll call him, had turned 65 and hadn’t had employer-provided health insurance in years. He spent a few hours trying to figure out how to sign up for Medicare and then gave up, totally confused, decided he’d try again in a few months.

Unfortunately, his prostate intervened. When Sam started experiencing pain urinating, he visited a local “doc in a box” urgent care clinic, where they gave him a PSA test. The result was shocking: his PSA was so high that it was a virtual certainty he had prostate cancer, and possibly it had even metastasized, a situation that is the second-leading cause of cancer death in American men.26

Telling him that he’d be facing hefty doctor and hospital bills regardless of the outcome, the urgent care clinic signed him up for a Medicare Advantage plan offered by an affiliate that almost certainly paid them a commission for the sign-up. Sam was excited, though, because he now had insurance, and it was a “no dollar” plan that didn’t cost him a penny.

Sam then got on the phone to find a urologist who specialized in cancer. He found that the best worked out of Memorial Sloan Kettering Cancer Center in New York, and, telling them he was “on Medicare,” he made an appointment to see one of their top docs. A month later, when his appointment finally opened up, the person who was checking him into the system told him that he’d have to pay cash because his Advantage plan didn’t include Sloan Kettering.

In fact, more than a third of all Medicare Advantage plans nationwide do not include any of the National Cancer Institute centers, and none of the Advantage plans offered in the New York City area include the nation’s most famous one, Memorial Sloan Kettering Cancer Center.27

Shocked, Sam contacted Medicare to see if he could transfer from Medicare Advantage to regular Medicare. This all happened in fall 2020, so they told him that he could make the change during the “open enrollment period” of October 15 to December 7. He made the change and called Sloan Kettering back.

This time, they wanted to know what Medigap policy he’d signed up for to fill in the 20 percent of billing that Medicare doesn’t cover. That sent Sam back to the internet and, ultimately, to an insurance agent, who told him that while Medigap plans can’t refuse you because of preexisting conditions when you first sign up when you turn 65, if you shift from Medicare Advantage back to traditional Medicare after that first enrollment, particularly if you’re older or sick, they can simply refuse to cover you.

Reporter Mark Miller wrote for the New York Times in February 2020 about Ed Stein, a 72-year-old man with bladder cancer and a Medicare Advantage plan that didn’t cover the cancer docs in his area who specialized in his type of cancer. He tried to shift back to traditional Medicare to cover what promised to be complex and expensive surgery and chemotherapy. As Miller wrote, “That was when he ran up against one of the least understood implications of selecting Advantage when you enroll in Medicare: The decision is effectively irrevocable.”28

At the end of 2020, my friend Sam still hadn’t seen a doctor. This is the state of healthcare in America as it’s been sliced and diced by the multibillion-dollar insurance industry.

Meanwhile, every fall, Americans are inundated with hundreds of millions of dollars’ worth of TV, direct mail, and internet advertising for Medicare Advantage plans. And where does the money come from to pay for that advertising?

It comes from the same place that provided over $1 billion in personal income to the former CEO of UnitedHealthcare and funnels over $100 million a month in compensation to senior executives in the largest health insurance companies: denying claims while collecting risk adjustment claims from your tax dollars and mine.

The simple solution to the Medicare Advantage problem is to kill off the program. It was just a Trojan horse to privatize Medicare, and its presence will make Medicare for All even harder to implement. At the same time, the 20 percent hole that the GOP insisted on for skin in the game with real Medicare needs to go, too.

A comprehensive Medicare for All program would eliminate both of these problems.

Rick Scott Killed Charlene Dill

When I was five and six years old, my dad had two jobs, selling Rexair vacuum cleaners and World Book encyclopedias door-to-door. We used to visit what my younger brothers and I called “the cheese store” every weekend in Lansing, Michigan, where we picked up powdered milk, giant blocks of processed American cheese, and a 20-pound bag of macaroni.

I still hate powdered milk and love mac and cheese.

Which is why Charlene Dill’s story hit me so hard. In 2014, she was living pretty much the life my dad had—she was working several part-time jobs (housecleaning and babysitting) and had just added a gig selling vacuum cleaners. And, like my dad back then, she was just barely getting by while parenting three young children.

As her best friend, Kathleen Voss Woolrich, wrote at the time and later told me on the phone, “She paid her property taxes and took care of her little trailer, which she owned, and got all three of her kids to school and day care. She was a very responsible person.”

My dad’s heart condition didn’t develop until he was in his 60s, and by then he’d been 40 years in a good union job and had excellent health insurance, even through his retirement. Charlene wasn’t so lucky.

As Woolrich recounted, after feeling pain in her chest, Charlene “went to the emergency room in 2012 and was told she had heart issues and needed monitoring and medication. But the Florida Republican Party and Governor Rick Scott had turned down 51 billion federal dollars for [Obamacare’s 2009] Medicaid expansion, so she had to work extra to pay for the meds, and the ER was her doctor’s office.”

On March 21, she was going to get together with Woolrich and her daughter, who’d essentially grown up with Charlene’s kids, but first she had to earn a few more dollars to pay for her heart medication, which she’d been cutting back on because of its cost.

The Affordable Care Act would have paid for Charlene’s doctor visits and medications, but the billionaire Koch brothers, in particular, were incensed by that prospect: they put up millions to fund advertising and PR campaigns, first to stop, and then to destroy, what Americans had started calling Obamacare.

Scott, who was heavily supported by the Koch brothers (they sent 40 paid staffers to Florida to help with his last gubernatorial campaign),29 followed their libertarian line that taking money from rich people to pay for the healthcare of working poor people was a bad idea. After all, it might hurt their “incentive” to work a second or third job. Like Charlene Dill did.

When Obamacare was rolled out, the National Federation of Independent Business (NFIB) went on the attack, pressing a lawsuit that went all the way to the Supreme Court, National Federation of Independent Business v. Sebelius.

The NFIB likes to present itself as a representative of small business, but its CEO makes nearly $1 million a year, and, as Renée Feltz wrote for the Guardian,

Past tax records reveal most of the NFIB’s funding comes from Freedom Partners, whose nine-member board includes eight current or former key figures at Koch Industries and other Koch entities. More than 95% of the candidates it backs are Republican.

While its representatives are often quoted in the media as proponents of small businesses, the group refuses to release its donor list and tends to lobby for policies that benefit billionaires and corporate interests.30

Nonetheless, the NFIB went into court as the protector of small businesses’ rights, including the right to not have the government take money from the Koch brothers and their peers to pay for working people’s healthcare.

Joined by 26 Republican-run states with politicians taking money from various Koch-funded enterprises and a few right-wing individuals, the NFIB claimed that requiring every state to expand Medicaid to cover their working poor was an unconstitutional form of coercion.

The Supreme Court agreed: states that didn’t want their working poor people to have health insurance could opt out of the Obamacare Medicaid expansion.

Charlene Dill lost her chance to get her medications paid for, along with millions of Americans in other Republican-controlled states every year.31

In the early evening of March 21, 2014, after spending a day cleaning houses, she headed out to a lead in Kissimmee, a small town near her trailer in Orlando, where a family had indicated an interest in buying a Rainbow vacuum cleaner.

While she was in the middle of her sales pitch, her heart stopped, and she fell over, unconscious. The family she was visiting called an ambulance, and Charlene was taken to the Poinciana Medical Center, but she was already dead, at age 32.

“I am burying my best friend because of [Governor] Rick Scott and . . . the policies of the Republican Party . . .,” Kathleen Voss Woolrich wrote. “She is one of the 7 people who will die each day because the Florida House of Representatives Republicans and Tea Party decided that we are not worth living. We are not worth healthcare. We were not worth Medicaid expansion.”32

Woolrich added, “I’ll never have her back. I’ll never see my friend again. I’ll never have another day with her because of the [Florida] Republican House of Representatives.”

Like most of his right-wing buddies, Scott had declined to expand Medicaid to low-income working people like Charlene. No rich person’s money was going to pay for Florida’s working people’s healthcare!

(Ironically, Scott’s hospital company, which he sold before becoming governor, paid a $1.7 billion fine33 after being convicted of the largest Medicare fraud in the history of the country to that point, all on his watch.34 He walked away with nearly $100 million, which he used to leverage himself into the governor’s office and then the US Senate.)

Charlene’s then-congressman, Alan Grayson, wrote for the Tampa Bay Times:

One of my constituents, Charlene Dill, could not afford [health insurance]. . . . Charlene knew she had a heart problem, but she couldn’t afford the medications and frequent visits to the doctor.

She worked three jobs but earned only $11,000 last year. With only $11,000 to feed her three children, keep a roof over their heads and pay the property taxes on her trailer, Charlene couldn’t afford standard health coverage. And because she made more than $5,400, she was not eligible for free or reduced-cost coverage under Florida Medicaid.

Grayson added, “This young mother didn’t have to die.”

And, indeed, she didn’t have to die, and neither did thousands of other Floridians—a state where one in five people has no health insurance whatsoever.35

As Grayson wrote on April 19, 2014, “The federal government committed more than $50 billion to fund Florida’s Medicaid expansion. You might think that our cash-strapped state would be clamoring for money to provide healthcare to the sick and poor. But you would be wrong. Republican ideologues in the Legislature refused the money. And now, Charlene Dill is gone.”36

As Woolrich told me on the phone, “If I could have carried her body all the way up to Tallahassee and put it on the ground in front of these Republicans, I would have done it.”

Charlene’s heart condition was controllable with medication; all she needed was the money to pay for the drugs and the doctor visits. Money she was instead redirecting to her three young children, ages three, seven, and nine.

Children now without a mother.

Work to Live, or Live to Work?

The question is as old as the Enlightenment era of our early republic: Is the economy here to serve us, or are we here to serve those who control or own most of the economy?

This question was at the core of Adam Smith’s 1759 book The Theory of Moral Sentiments and is touched on in his 1776 The Wealth of Nations. It’s repeatedly echoed through our history.

In 1932, running for president, Franklin D. Roosevelt spoke at San Francisco’s Commonwealth Club. He raised it there.

“The issue of government has always been,” he said, “whether individual men and women will have to serve some system of government or economics, or whether a system of government and economics exists to serve the individual men and women.”

Government, FDR believed, was the only force large and strong enough to bend the movers and shakers of the economy to the public benefit. The oligarchs of his day, he said, “have undertaken to be not businessmen, but princes,” lording over the average people whom the economy is meant to serve.

Even worse, FDR said, after the Republican administrations of Harding, Coolidge, and Hoover produced the roaring twenties and the Republican Great Depression, Americans believed that those “princes” of business had seized the government of the United States itself and turned it against them.

“There came a growing feeling that government was conducted for the benefit of a few who thrived unduly at the expense of all,” he said. At the very least, FDR said in that speech, invoking the ancient concept of noblesse oblige, politicians must be mindful of “the ethical conception that a ruler [bears] a responsibility for the welfare of his subjects.”37

But what’s included in that “welfare”?

The word is referenced twice in the Constitution, first in the Preamble (the Constitution is ratified to “promote the general Welfare”), and then in Article I, Section 8 (“The Congress shall have Power To lay and collect Taxes . . . to pay the Debts and provide for the common Defence and general Welfare of the United States”).

The George Washington administration certainly believed this was adequate constitutional authority for the federal government to pay for healthcare; Congress passed and Washington implemented not only military hospitals but also a poorhouse in Washington, DC, that provided food, clothing, shelter, and medical care.

Washington was followed in 1797 by President John Adams, who, on July 6, 1798, signed the Act for the Relief of Sick and Disabled Seamen, leading to the opening of a government-funded hospital on Castle Island in Boston Harbor in 1799. In addition to its government subsidy, the plan deducted 20 cents a month from the seamen’s wages; its first chief physician was Dr. Thomas Welsh, who’d also fought during the Revolutionary War both in the Battle of Bunker Hill and at Lexington.38

The hospital was not for the Navy, though—because transoceanic transportation was so vital to the new American economy, this was for men who worked on civilian commercial ships, merchant seamen.

So it couldn’t be argued that America had never considered providing government-funded healthcare to its citizens; indeed, we’ve been doing it since the founding of our republic.

But even the great FDR—with all his political and rhetorical skills—was unable to get healthcare to all Americans.

He and his secretary of labor, Frances Perkins (arguably the author of most of the New Deal), had pushed to include health insurance in the legislation that would become, in 1935, what we call Social Security, but it was a long shot.

Edwin E. Witte was the chairman of FDR’s Committee on Economic Security (CES), tasked with determining what would and wouldn’t be in the Social Security program that the new administration was putting together after big Democratic congressional gains in the 1934 election.

In a passing side note to his report to FDR, Witte told a 1955 audience on the 20th anniversary of Social Security, he had “merely stated that the CES would make a later report on the subject . . . with a provision that the Social Security Board should study the need for and possibility of improving the social security protection of Americans, including, among others, health insurance.”

When Republicans read that reference to the need for “study” of the “possibility” of, among other things, “health insurance,” it was as if a bomb had gone off in the Capitol.

“This innocent reference to health insurance,” Witte told his audience, “led to the first special Meeting of the House of Delegates of the American Medical Association, in the false belief that the Administration was secretly trying to foist compulsory health insurance on the country. Immediately, the members of the Ways and Means Committee, then considering the social security bill in executive sessions, were deluged with telegrams from all parts of the country protesting against this ‘nefarious plot.’”39

FDR decided that even thinking or talking about a national health insurance program could sink Social Security, so, according to Witte, he decided to put it off for the moment. FDR again promised to work on a national health insurance program in his 1945 State of the Union address. “An expanded social security program,” he told Congress, “and adequate health and education programs, must play essential roles in a program designed to support individual productivity and mass purchasing power.”40

Three months later he was dead.

But that September, President Harry Truman picked up the issue, calling for a “Fair Deal” that included “extending, expanding and improving our entire social security program.”41 Truman, ever the blunt, plainspoken “man from Missouri,” appealed to America’s conscience.

“I put it to you, is it un-American to visit the sick, aid the afflicted, or comfort the dying? I thought that was simple Christianity.”

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