By Robert M. Goldberg on 5.18.10 @ 6:08AM
Meet Jay Angoff, a trial-lawyer favorite who loves suing
insurance companies.
Last week the Congressional Budget Office reported that it
expects that the Internal Revenue Service and the Department of
Health and Human Services will spend up to an additional $200
billion over the next decade on administering Obamacare. That's
in addition to the estimated $1 trillion that will be spent in
2014-2019 under the new healthcare law.
Much of the money will go to hiring hundreds of
thousands of bureaucrats to administer Obamacare over the
next decade. But in the short term, the additional dollars will
bankroll a two-pronged campaign to re-elect congressional
Democrats. The Department of Health and Human Services will not
only provide talking points in defense of Obamacare, it is
preparing to use the new law for short term political gain and in
ways that could make health insurance less affordable and
available in 2014.
As Politico
noted: "The Obama administration…gave more shape
to its health reform selling strategy: Focus on the early
roll-out of tangible benefits and, if all goes as planned, win
over a skeptical public more than any argument ever
could."
This strategy involves much more than trying to win a media
battle. HHS Secretary Kathleen Sebelius who is leading this
effort said she expects the process to involve "hand-to-hand
combat" with insurance companies.
To that end, Sebelius and the White House have appointed
someone with lots of experience and a zest for trench warfare
against health plans. Sebelius picked Jay Angoff to head the Office of
Consumer Information and Insurance Oversight at HHS.
Angoff is a class-action litigator who specialized in and
made millions
by suing insurance companies for "price gouging." As
insurance commissioner of Missouri he was famous for going after
insurers he believed had too much in reserve (too profitable). In
a
study he prepared for the trial attorney trade that was
funded Center for Justice and Democracy, he claimed insurers were
artificially inflating the premiums they charged doctors for
malpractice insurance, which in turn drove health care prices
through the roof.
He will now be running one of the most powerful offices in
HHS or in any federal agency. He has control over developing and
enforcing new rules for insurers, organizes the temporary
high-risk pools, collecting information abut health plans and
setting up and running new state exchanges.
Single payer and consumer groups are gleeful: After
Angoff's appointment, his former law partner Cyrus Mehri
told the New York Times: "Having been a state
insurance commissioner, Jay can see through the games insurance
companies play. He will put teeth into the law. He will create a
whole new federal regulatory regime to rein in the abuses and
excesses of the industry."
In fact Angoff's tenure in both Missouri and New Jersey is
associated with driving out health insurers and driving premiums
sky high. He told a group: "One of the reasons that
our state health plan in Missouri is not doing as well today as
it did in the first five years is that we got greedy. We had so
much bargaining power that we kept
rebidding the contract and kept squeezing these guys because we
had the power to do so." Thanks to Angoff's strategy there are
fewer plans and higher costs. Similarly, when he worked for New
Jersey governor Jim Florio, he helped draft and
implement the New Jersey health law eliminating lower premiums
for healthy people in favor of letting everyone pay one price
regardless of how sick they were. The bill also required
insurance companies to provide coverage to people who didn't have
coverage before they got sick.
As a result, since 1993, New Jersey's insurance premiums
have increased faster and are the most expensive in the
country. Since 2003, the number of people covered by
employers has fallen.
Angoff is now in charge of telling health plans how much
they should spend on what HHS will define as "clinical care" to
determine whether they are spending the required 80-85 percent of
revenues on health care. And his office handles all complaints
about premium hikes, most of which are due before the election.
By setting premiums low and payouts high, Angoff and Sebelius are
betting that health plans will simply pay doctors and hospitals
less and consumers will benefit. In fact it will lead to fewer
choices of doctors and health plans.
Angoff should know. As he said of
his experience in Missouri: "We got tremendous
savings. This was a great system, we saved a ton of money and it
was terrific for the consumer for five years. However, after five
years it wasn't so terrific…a lot of carriers merged, and I take
some responsibility or blame for that."
Now Angoff is responsible for applying his approach
nationwide. If his track record is an indicator of
what's to come, Angoff will push health plans to the brink of
default and a government "bailout." Which is what many supporters
of Obamacare wanted in the first place.
