I was thinking about the question of property insurance trade associations and lobbying while reading today’s St. Petersburg Times article, At what Cost Care? The article was a question and answer discussion with Wendell Potter, who was a public relations executive for two major health insurers. Potter has given an inside view into the political and social power of the health insurance industry in a manner most Americans probably deplore. I wonder if property insurers are different? I doubt it.
So, if you had any interest in my prior posts, State Farm’s Power Play And Propaganda Ploy, State Farm’s, Allstate’s and Nationwide’s Concerted Agenda To Stop Competition And Insure Profits, State Farm Has Agents Spread Propaganda and Bullies North Carolina, Insurance Lobbyists are Winning the Consumer Protection Battle, State Farm Bullies Texas and Florida with Power and Propaganda, you may want to follow the information Wendell Potter shared with the Times and his testimony in Congress this past June.
This is how he started his testimony before Congress:
“My name is Wendell Potter and for 20 years, I worked as a senior executive at health insurance companies, and I saw how they confuse their customers and dump the sick – all so they can satisfy their Wall Street investors.
I know from personal experience that members of Congress and the public have good reason to question the honesty and trustworthiness of the insurance industry. Insurers make promises they have no intention of keeping, they flout regulations designed to protect consumers, and they make it nearly impossible to understand—or even to obtain—information we need. As you hold hearings and discuss legislative proposals over the coming weeks, I encourage you to look very closely at the role for-profit insurance companies play in making our health care system both the most expensive and one of the most dysfunctional in the world. I hope you get a real sense of what life would be like for most of us if the kind of so-called reform the insurers are lobbying for is enacted.”
The highlighted portion sounds pretty similar to my rhetoric about property insurers—not something expected of a former insurance company executive. Yet, while reading the Times article, it seemed that some of his insight into health insurance propaganda seems from the playbook of property insurance companies as well:
“What triggered your current activism?
A couple of days after the president’s summit on health care in March, when he invited the leaders of the big trade associations to come talk about reform. I was watching Chris Matthews on MSNBC and I saw them patting each other on the back and promising to really work together, just like they did back in the early ’90s. Then I heard Matthews say, "The cosmos has shifted, the worm has turned." And I thought, "Oh my God, hopefully he’s saying that tongue in cheek."
I was among the people who helped develop the strategy used to defeat reform under Clinton and I know the playbook. I saw the industry conducting the charm offensive.
Soon after, I heard a congressman from Tennessee, Zach Wamp, talking on MSNBC about the problem of the uninsured. One of the industry’s tactics is to diminish the problem by making people think a lot of folks are uninsured, or "go naked," by choice. And here this congressman was, saying half the uninsured are "going nekked" by choice and I realized he was using a talking point I wrote!
That’s when I decided I had to speak out because I knew what was going on. The wool is being pulled over people’s eyes once again. Maybe if I say something it will make a difference.
What else is in insurers’ playbook?
They want to be seen as wearing white hats, as advocates of reform, while behind the scenes they’re working to undermine reform. They’re using big PR firms to set up front groups to engage in activities that scare people away from reform. They’re warning of government takeover of the health care system, though nothing like that has been proposed. They’re saying a public plan is the slippery path to socialized medicine.
They raise the scare of higher taxes and warn of more burdens on small business. I know they were high-fiving each other when the CBO’s (Congressional Budget Office) estimate came out on the cost of health reform. But I know how the CBO works — they have to consider additional costs without taking into consideration what the ultimate benefit might be.
There’s going to have to be government subsidies if we’re going to cover people who can’t afford insurance. But the system we have now is constraining economic growth and vitality. I believe reform that enables people to have alternatives other than through their employer or a private plan will revitalize the economy in ways people can’t imagine."
Most people simply have no time, money or power to become involved in the politics of insurance, but the insurance industry does. It has more money than most of us can imagine and lavishly spends it on public and governmental relation. It employs many people to persuade the political and regulatory process and “game” the system to ensure profits. The “gaming” is in the form of laws and regulations that fail to hold insurers accountable for wrongful claims handling while, at the same time, charging rates as profitably high as possible. As I have pointed out, the insurance companies often do it together through trade organizations and other entities they create to promote their governmental agenda.
Potter talked somewhat about the tactics that these people in the insurance propaganda industry use in The Ultimate Irony: Health Care Industry Adopts Big Tobacco’s PR Tactics:
“…when it comes to deceitful public relations techniques, the health insurance industry has been learning well from Big Tobacco, which employed a panoply of shady but highly successful public relations tactics to fend off changes to its business for generations.
One of the things I said in my testimony before the Senate Commerce Committee on June 24 is that the health insurance industry engages in duplicitous public relations campaigns to influence public opinion and the debate on health care reform. By that I mean there are campaigns they want you to you know about, and those they don’t.
When you hear insurance company executives talk about how much they support health care reform and can be counted on by the President and Congress to be there for them, that’s the campaign they want you to be aware of. I call it their PR charm offensive.
When you read or hear someone other than an insurance company executive — including members of Congress — trash some aspect of reform the industry doesn’t like, such as the creation of a public health insurance option, there’s a better-than-even chance that person is shilling for the industry. That’s the PR campaign the industry doesn’t want you to know about.
The public relations and lobbying firms that work for the industry plan and carry out those deception-based campaigns, and supply the shills with talking points. One of many tactics they use is to get people who are ideologically in sync with the industry’s agenda to turn those talking points into letters to the editor.
An example of a letter that contained many of the industry’s messages appeared in the June 27 edition of the New York Times.
For another great example of how the insurance industry uses its allies to flood newspapers with letters to the editor, read Trudy Lieberman’s April blog post for Columbia Journalism Review. She discloses how an alert editorial page editor at the North Andover, Massachusetts Eagle-Tribune caught the industry red-handed.”
The recent debate about Florida allowing a law deregulating State Farm was a classic case of propaganda caused by State Farm not getting its way on rate increases. Its public relations gurus made it into a question about consumers having a “choice” to pay higher rates and relating that “choice” phrase into typical American notions of freedom and “free markets.” The only problem is that the insurance market in Florida is not an economically “free market” because it was historically dominated by a small oligopoly, and it has very little price elasticity because the supply is not sufficient.
The campaign to allow unregulated rates for a handful of insurance companies had letters written to the editors of newspapers, State Farm agents visiting politicians with scripted “talking points” and lobbyists putting as much pressure upon the legislators and the governor as possible.
As I am writing this, there are State Farm and other property insurance industry propagandists trying to figure out how they will influence people’s elected officials, the public, editors of papers, and regulators with some new agenda item of importance to “game” the system for insurance company’s benefit. We need more people like Wendell Potter that talk about how this silent influence goes on so that we do not become the victims of a social and political system that works only for corporations rather than people.