Deadly Spin

by Wendell Potter

  At the same time that I was talking with HCAN, I also began to get to know John Stauber, who in 1993 had started the Center for Media and Democracy in Wisconsin “to investigate and counter spin corporations, industries and government agencies.” I had secretly admired the center’s work even when I was at CIGNA. Stauber had always hoped he would someday meet a PR guy who was willing to “spill his guts,” as he put it. After a thorough vetting that included a formal background check, Stauber invited me to join CMD as senior fellow on health care. I jumped at the chance. My duties would involve doing research and contributing to CMD’s Web site. I would also write a blog on health care reform. I told Stauber that I thought I should stay in touch with HCAN, and he agreed, although he was not a big fan of the organization. He was among those who thought that HCAN had caved too soon on single payer.

  My continuing conversations with HCAN led to a two-hour meeting in the Dirksen Senate Office Building in early June with the staff of the Oversight and Investigations Subcommittee of the Senate Commerce, Science, and Transportation Committee, which was chaired by Senator Jay Rockefeller (D-W. Va.). After another background check, this one by the U.S. Senate, I got a call from committee staff asking me if I would be willing to testify at a June 24 public hearing.

  I agreed, after talking it over with my family. I knew our lives would change forever as soon as I finished my testimony; I just didn’t know how. Once again, I imagined the worst that could happen. But I knew that if I didn’t do it, I would always regret it. This was my chance to possibly make a difference. The time had arrived for me to leap.

  With the possible exception of my wedding day, June 24, 2009, was the scariest day of my life. The committee staff had alerted the Capitol Hill press corps that I would be testifying, so I knew there would be at least some news coverage of what I had to say. Fortunately, I would be testifying as part of a three-person panel on the need for reform and also for health insurers to be required to be more transparent in their dealings with consumers. The other panelists were people I had heard of and respected: Karen Pollitz of Georgetown University’s Health Policy Institute and Nancy Metcalf of Consumer Reports.

  When the hearing ended and I stood up, reporters swarmed around me. My new life as a very public reform advocate and critic of the industry had begun. Over the coming months, I would testify before two other congressional committees; appear at two press conferences with House leaders, including Speaker Nancy Pelosi of California and House Rules Committee chairwoman Louise Slaughter (D.-N.Y.); meet separately with dozens of members of both the House and the Senate and with scores of Hill staffers; and travel to more than half the states for speaking engagements and interviews. My fears about retaliation from the industry proved to be groundless. My former colleagues decided that the best way to deal with me was to pretend I didn’t exist. They knew that acknowledging me and what I was saying would only give me more exposure.

  Within a month after my first appearance before Congress, House leaders pushed a bill through three committees that included the public option and a surtax on high-income earners. To win the support of the more conservative Blue Dog Democrats, the leadership agreed to include certain tax exemptions for businesses. No Republicans voted for it in any of the committees.

  Getting the legislation through the Senate was going to be even more of a challenge. Two relevant committees were considering health care reform bills. The Senate HELP Committee, chaired by Chris Dodd (D-Conn.), sitting in for a gravely ill Ted Kennedy, passed a bill that included the public option on a party-line vote, 13–10. But Baucus was determined to keep the public option out of his Finance Committee bill. Regarded with suspicion by progressives, Baucus departed from Senate tradition by creating a working group of three Republican and three Democratic committee members to hold private meetings and forge a consensus on health care reform. The meetings dragged on for many weeks, raising suspicions that the Democrats were being duped by Republicans into believing that bipartisanship was achievable.

  But progressives kept moving forward, and the American Medical Association, a crucial interest group, endorsed the public option—a far cry from its historic positions that had helped defeat reform for more than a century.

  The month of August was a painful one for pro-reform forces. Ignagni bluntly warned members of Congress not to blast her industry during the August recess. She told the Associated Press that if lawmakers used the recess to vilify insurers, “members of Congress will come back to Washington without a strong sense that health care reform is doable. And that would be a lost opportunity. We think health care reform is going to be won or lost in August.”

  Obama had begun talking by then about insurance company abuses and record profits, and Pelosi went so far as to call insurers “villains.” Ignagni responded by saying that “when polls are slipping, people turn to tried-and-true tactics.”14

  Members of Congress scattered to their states and districts during the recess, and health insurance industry allies were waiting. Many legislators were confronted at town hall meetings by angry crowds—sometimes exhibiting mob behavior—who expressed an almost inchoate outrage over health care reform. Few seemed well informed about the policies they were protesting. At one event, several angry objectors carried signs demanding that the government keep its hands “off my Medicare,” apparently not realizing that they were enrolled in the country’s biggest government-run health care program.

  I was a participant at one of these rowdy meetings and saw firsthand how angry and misinformed people were. Representative Bill Pascrell (D-N.J.) invited me to speak at a town hall he held at Montclair State University on September 3. More than a thousand people crammed into the auditorium, not so much to hear the speakers as to express their opinions. Reform opponents were on one side of the auditorium, and reform advocates were on the other side. I had to shout my remarks to be heard above the noise and chaos. Each side was determined to be louder than the other, so no one could hear anything being said.

  Pascrell was able to calm the crowd long enough to conduct what he had hoped would be a Q&A session, but there were few questions. Most people just wanted to vent. One woman said she’d heard that some of the people working behind the scenes on the legislation had close ties to communists. Another woman said she’d heard that all the pizzeria owners in the area would be put out of business if health care reform legislation passed.

  There was no doubt in my mind afterward that the insurance industry had played a role in what was clearly a well-orchestrated fearmongering campaign—and a well-organized effort to get people out to disrupt the town halls.

  Allies of the insurance industry had begun sending e-mails to millions of people with false claims about the contents of pending bills. One of the most insidious rumors was that the legislation would create government “death panels” to sort out which elderly people were too unhealthy or unworthy to get treatment through Medicare. Polls showed that millions of people, especially seniors, believed the rumors.

  It was all part of a coordinated strategy. Journalists reported on memos from astroturf groups—like Dick Armey’s FreedomWorks and Americans for Prosperity—that advised members on how to put congresspeople on the defensive by disrupting presentations and challenging everything they said in support of the Democrats’ “socialist agenda.” The objective was to make members of Congress believe that opposition to health care reform was widespread. Predictably, polls began to show that the public was buying into this manufactured imagery. HCAN responded by turning out thousands of people at hundreds of town hall meetings to physically position themselves to outmaneuver the Tea Party members and other reform opponents and blunt their media impact, but the damage had been done.

  After the summer recess, Obama tried to restore support for reform by speaking to a rare joint session of Congress. In the September 9 speech, he criticized his opponents’ “scare tactics” and made his strongest case yet for comprehensive reform. When Obama denied that illegal immigrant
s would be given health care coverage under any bill being considered by Congress, Representative Joe Wilson (R-S.C.) blurted out, “You lie!” Wilson was rebuked a week later by the House, and polls showed that Obama had stopped the slide in public opinion favoring reform.

  Thanks to Pascrell, I was in the House gallery during the president’s address—the first time I had been there since I’d left my job as a Washington correspondent thirty years earlier. Just being there was a moving experience, but to hear the president quote me (although not by name) was a spine-tingling moment. “As one former insurance executive testified before Congress,” Obama said, “insurance companies are not only encouraged to find reasons to drop the seriously ill, they are rewarded for it. All of this is in service of meeting what this former executive called Wall Street’s relentless profit expectations.”

  A week after the speech, Baucus finally gave up on his effort to win over any Republican members of his Finance Committee and introduced his long-awaited bill, which, to progressives’ great disappointment, did not include a public option.

  But shortly thereafter, in mid-October, the insurance industry made its first significant blunder. Insurers had insisted that Americans should face severe financial penalties if they did not buy health insurance. Unhappy that the penalties in the Baucus bill were not as significant as it had expected, AHIP hired PricewaterhouseCoopers (PWC) to produce a report showing that health care reform would hurt most Americans rather than help them. Touted by Ignagni in a conference call with reporters, the data showed that health care reform would drive premiums up for everyone—and that consumers would foot most of the bill for an excise tax on expensive health care plans. This was contrary to reports from the CBO and independent experts that concluded that insurance companies would respond to the tax by slowing the growth of health care costs.

  White House staffers who had spent months trying to accommodate the industry’s demands went ballistic, claiming that after months of respectful interaction, AHIP had blindsided them with a biased and purposely misleading report. “It comes on the eve of a vote that will reduce the industry’s profits,” White House spokeswoman Linda Douglass said. “It is hard to take it seriously. The analysis completely ignores critical policies that will lower costs for those who have insurance, expand coverage, and provide affordable health insurance options to millions of Americans who are priced out of today’s health insurance market or are locked out by unfair insurance company practices.”15

  The firestorm became so intense that PWC backed away from its own findings, pointing out that it had focused only on the parts of health care reform that AHIP opposed, while ignoring everything else. “The disclaimer doesn’t get PricewaterhouseCoopers entirely off the hook,” wrote Ezra Klein in the Washington Post. “The methodological inadequacies of the report made the results nothing short of deceptive, and the final product still had PWC’s name on it. But it makes it even harder for anyone to take the analysis seriously, and it leaves AHIP standing alone.”16

  I learned firsthand how outraged the White House was when I got a call from a senior White House official early on the morning that AHIP released the report. I was told that Ignagni herself had assured the White House just days before that AHIP had no plans to launch an immediate attack on the Baucus bill. It became clear to me during that conversation that the president and his aides had believed that industry leaders could be trusted. Now they understood why I had started speaking out against the industry and its duplicitous PR campaign, and they were hoping I would go after AHIP and its bogus study. I did, in my blog and in numerous interviews that week.

  On October 13, the Finance Committee approved the Baucus bill 14–9, with a lone Republican “yes” vote cast by Senator Olympia Snowe of Maine. But AHIP’s misstep did more than fail to kill reform—it briefly revived the fortunes of the public option. According to Shailagh Murray and Lori Montgomery of the Washington Post, Senate majority leader Harry Reid’s “original inclination was to leave the public option out of a final bill he is writing from measures passed by the finance and health committees. But his liberal colleagues began urging him two weeks ago to reconsider, after insurance industry forecasts that premiums would rise sharply under the Finance Committee bill, which lacked a public option. The report had the effect of prodding Democrats to look for better ways to control costs, and the public option—strongly opposed by the insurance industry—reemerged as a possible solution.”17

  The impact of Reid including the public option in the merged Senate bill was immediate. It ended Snowe’s flirtation with bipartisanship. She announced that she would oppose the bill.

  Meanwhile, Pelosi was trying to resolve differences among House Democrats. By adding stronger provisions barring illegal immigrants from buying insurance through government-run purchasing exchanges, even if they did not receive tax subsidies, and adding more restrictions on abortion coverage, Pelosi cobbled together the bare majority she needed to pass the bill. On November 7, the House voted 220–215 to pass the bill. One Republican, Joseph Cao of Louisiana, crossed party lines.

  Now it was the Senate’s turn, and the senior chamber worked twenty-five consecutive days, often debating into the night. Majority Leader Reid had to hold on to sixty votes to overcome a Republican filibuster, and he had fifty-eight Democrats plus two independents who caucused with them. One of them, Senator Joe Lieberman of Connecticut, said he would join a filibuster if the public option remained in the bill. Democrats proposed a trade that Lieberman had spoken favorably about earlier: allowing people aged fifty-five to sixty-four to buy into Medicare. But Lieberman commented that the idea must be bad if liberals favored it so strongly, and he nixed it as well, infuriating Democrats who howled about his hypocrisy. The other obstacle to sixty was Senator Ben Nelson (D-Neb.), a former insurance company CEO, who held out to the end—and was finally won over by a provision to funnel millions of dollars in extra Medicaid money to Nebraska. The deal was ridiculed as the “Cornhusker kickback” by Republicans and greeted with derision by Democrats, too, but they were happy just to see a deal. Now with his votes, Reid called the roll on Christmas Eve, and the bill was passed, 60–39. With the public option stripped from the bill, Lieberman joined the Democrats in voting for the bill. Senator Jim Bunning (R-Ky.) was the only member of the Senate who did not vote. The conference committee would take up the measure in January, and Congress emptied for the holidays.

  Meanwhile, distracted by the Senate deliberations and the holidays, a Democratic candidate expected to easily win a special election to replace Senator Kennedy (who had died on August 25) waged a lackluster campaign. Massachusetts attorney general Martha Coakley was so confident of winning that she took a New Year’s vacation to the Caribbean, did little polling, and bought minimal advertising. Her GOP challenger, state senator Scott Brown, was traveling the state in his pickup and firing up a conservative base that wanted nothing more than to take the sixtieth vote in the Senate away from the Democrats in the January 19 election. They got their wish: Brown trounced Coakley, 52 percent to 47 percent.

  Obama and the stunned Democrats huddled to figure out whether health care reform could be salvaged. The Tea Party, their FreedomWorks enablers, and the insurance industry that funded them were elated at the growing likelihood that they would kill reform and undercut Obama’s presidency.

  Pelosi and Reid took several weeks to devise a strategy to push reform through both chambers despite the addition of Brown as the forty-first vote against the bill. If the House could pass the Senate bill, unchanged from Christmas Eve, there would be no need for a conference bill requiring sixty Senate votes. But Pelosi knew that some House Democrats were unhappy with the Senate bill and would reject it unless they could count on a companion bill with House fixes that could be adopted in the Senate with fifty-one votes under reconciliation.

  As this plan took shape, Obama appeared in an interview on the Super Bowl pre-game show and announced that he would lead another White House “summit” that
would be broadcast on national television. Americans could watch as the two parties discussed how they might make a deal on health care reform. Some argue that his true purpose was to shine a light on the paucity of Republican ideas and their unwillingness to work in good faith with the administration and congressional leaders.

  Even with the president fully engaged, I could sense that Democrats in Congress were not confident they could pull off their plan. Within days, however, they got an unexpected gift from the insurance industry. The Los Angeles Times reported in early February that California’s largest health insurer, Anthem Blue Cross, a subsidiary of WellPoint, had notified eight hundred thousand of its customers that it was going to raise their premiums by as much as 39 percent.18 The move sparked a backlash that attracted national media attention. Obama, Secretary Sebelius, and congressional Democrats seized on the planned rate increase and kept the story alive for days, overshadowing the Republicans’ continuing efforts to kill “Obamacare,” as they were calling the reform legislation.

  In early March, Obama exhorted Democratic lawmakers to finish the bill by the Easter recess. Pelosi and Reid went ahead with the reconciliation plan over vitriolic GOP objections. The Republicans complained that the Democrats were using a procedural “nuclear option” to push the legislation through. Reid reminded them of all the major bills they had passed using the same procedure when they had controlled the Senate during the Bush administration—including two huge tax cuts and the creation of an industry-backed Medicare prescription drug program.

  Pelosi and Reid had numerous other problems to resolve, not the least of which was opposition to the legislation from a group of Democrats who wanted to strengthen restrictions on abortions. There were also liberals who still hoped for a public option.