‘KamalaCare’ fails to address big problem: That we cannot trust insurance companies

It’s hard to disagree with Sen. Kamala Harris (D-Calif.) when she says: “Right now, the American health care system is a patchwork of plans, providers and costs that have left people frustrated, powerless and insurance companies in charge. And . . . health care just costs too much.” That makes it all the more confusing that Harris’ new health care plan would maintain the broken status quo — one that leads thousands of Americans to die each year.

Like Sen. Bernie Sanders’ (I-Vt.) and Rep. Pramila Jayapal’s (D-Wash.) “Medicare for All” legislation, Harris would open up an improved, traditional Medicare public plan to all Americans. Unlike Sanders and Jayapal, Harris also would allow anyone who wants to opt into a commercial Medicare plan to do so.

Harris’ proposal would require all commercial health plans to operate under Medicare, which would provide greater oversight of health insurers. But it’s not clear how Harris’ plan would eliminate much, if any, of the $500 billion a year in administrative waste that private health insurers bring to the table.

Harris’ plan overestimates the government’s ability to keep for-profit health insurance companies from driving up health care spending and denying people needed care. It’s hard to see how it would rein in health care costs and guarantee health care to all Americans.

Harris’ tough talk on new rules of the road for private insurers sounds terrific. But President Barack Obama said the same thing 10 years ago — and health insurers won out under the Affordable Care Act, making tens of billions of dollars in profits since the law passed. Insurers are in business to drive big profits and shareholder returns. How would Harris prevent insurers from gaming the system, as they always have?

It would be wonderful if Congress could enact a law that would turn our for-profit health insurance industry into the heavily regulated, largely non-profit insurers that offer better coverage at a lower cost in Germany, France and Japan. But with the health insurance trade association spending nearly $7 million on lobbyists in 2018 alone, thinking Congress would remove the profit motive of those companies is magical thinking. Harris underestimates the ability of for-profit insurers to corrupt our political system and health care regulators. 

Medicare Advantage plans, the commercial insurers that offer Medicare benefits, have overcharged the federal government—taxpayers—well over $100 billion dollars during the last decade, and the federal government has not been able to recoup even the cost of its audits. Many of these insurers have engaged in what the U.S. Office of the Inspector General calls “widespread and persistent” performance problems related to “denials of care and payment.” They have largely escaped public identification and accountability. Other Medicare Advantage plans have “threatened the health and safety of their members.” 

For several years now, Medicare Advantage plans have not disclosed complete and accurate data that reflects actual services their enrollees have received. This is necessary to ensure plans are providing them appropriate levels of care. The federal government has not even been able to get Medicare Advantage plans to provide their members with complete and accurate directories of which doctor they can see.

As Harris notes, 200 economists have united behind Medicare for All because it saves money and guarantees affordable health care to all. What she misses is that her plan is a far cry from the “single-payer” Medicare for All system these economists are referring to. Harris’ health care reform proposal introduces a new patchwork of private health plans with little evident cost savings and a high risk that enrollees will not get the affordable care they need. Like other Democratic presidential candidates who propose a “public option,” she never tells us what her plan will cost or why for-profit insurers will all of a sudden deliver good affordable health care. There’s a reason.

Wendell Potter is the former senior vice president for corporate communications at Cigna and a health insurance industry whistleblower. He is now President of Business for Medicare for All. Diane Archer is a leading health care advocate who played a key role in shaping the Affordable Care Act. She is founder of the Medicare Rights Center and Just Care USA.