Remembering Harry and Louise

I’m not exactly sure how old they are, but Harry Johnson and Louise Caire Clark made their first appearance in 1993 during the heated healthcare reform debate of the first Clinton Administration.  Like me, they are looking at Medicare as their next viable insurance option.  While they’ve had other notable television appearances during the 2000 and 2004 Presidential elections, their most recent appearance was during the Democratic Convention on Aug. 24, 2008 when they appeared on camera (for the insurance industry) favoring healthcare reform.  The specter of Harry and Louise in an about face is beginning to raise its head in the current healthcare reform debate – and a focus on the Medicare population should be expected.

Last Monday, the insurance industry made an aggressive volley when ’s Health Insurance Plans (AHIP) – a trade association representing 1,300 of the nation’s insurance providers – issued a report critiquing the Senate Finance Committee proposal.  Coming the afternoon before the scheduled vote of the Committee, the insurers were clearly unhappy with the tenor and direction of the ongoing healthcare debate.  The report (prepared by Pricewaterhouse Coopers) argued that the proposed program would:

• Not create the right incentives for getting young, healthy people to opt in for healthcare insurance
• Push premiums up
• Result in certain states experiencing prices going through the roof – there is a difference in cost between lightly and heavily regulated states but by most accounts, a national program would create downward pressure on premiums…
• Create a “high-cost” insurance tax that will increasingly be applied to everyone –
• Force premiums to rise faster due to cost shifting from Medicare and Medicaid

But since the release of the report, there has been some controversy.  I encourage everyone to draw their own conclusions.  One of the best I’ve seen so far is from The Washington Post, which on Thursday provided a fact check on various parts of the PWC report.  Also, note that PWC backtracked on their report the next morning by indicating that is was based on certain assumptions.  While the AHIP report was viewed as a frontal assault by most Democrats, it seemed to gain some traction among Republicans and their staff who have been skeptical of passing the expansive change called for by the five measures passed by various House and Senate Committees. 

The response from the Obama Administration was swift, as well as predictable.  While AHIP President Karen Ignagni told the Administration that reform was “a ways away,” Democrats responded immediately and upped the ante.  On Wednesday, they called for “reconsideration” of the long held antitrust exemption – only held by healthcare insurers and baseball, those two quintessential American institutions.  The exemption was created in 1945 by the McCarran-Ferguson Act.  The act effectively hands regulatory oversight to the states without intervention by the feds. 

In calling for a change in policy, Chuck Schumer (D-NY) called the exemption “…one of the worst accidents of American history.  It deserves a lot of blame for the huge rise in premiums that have made health insurance so unaffordable.”  Majority Leader Harry Reid (D-NV) and Patrick Leahy (D-VT), Chairman of the Senate Judiciary Committee which holds oversight on the issues and both of whom are heavy hitters in the Senate, were quick to join Schumer.  The argument is that by allowing the antitrust exemption, competition is not encouraged at the state level and health insurance companies “protect” their profits.  AHIP, in response, said, “The health insurance industry is one of the most regulated industries in America … The focus on this issue is a political ploy designed to distract attention away from the real issues of the debate.”  As a person in the middle, it seems that everyone on both sides is distracting everyone from lots and lots of issues.  So, the specter of the return of Harry and Louise seems more likely today than last week.  Watch for it to be focused – if it occurs – on the elderly and their vulnerabilities.

While the PWC report certainly did not stop Olympia Snowe from voting for the Senate Finance Committee bill, the study seems to have re-energized Republicans and given them a further reason for altering the course of the Democrats’ plans.  But, before we turn to the debate on the other side of Congress, let’s take a look at one other important constituency…

Kevin Fickenscher, MD

The views and opinions expressed herein are my own and do not necessarily represent the views and opinions of Dell Perot Systems or its affiliates.