Divided We Fail: Signs of a Schism

 What Do
Healthcare Coalitions and  the Show, Survivor, 
Have In Common?

 Despite much talk about
bi-partisan compromise and unlikely bedfellows, the truth is that the political
debate over healthcare reform will ultimately come down to a battle over money.
And the special interests will fight to the death before giving anything up.

A story in yesterday’s Chicago Tribune confirms that coalitions
between “
Labor unions and business groups that have
teamed up in a multimillion-dollar national lobbying campaign
to pressure President Barack Obama
and Congress for big changes in the nation's health care system” are
now “quietly at odds.”

 (Hat-tip to reader Brad
F. for calling my attention to this story. 
As Brad put it in an e-mail: “Ah,
contestants
on Survivor are cannibalizing:

Shocker”)

“Specifically, the Tribune
explains that “after spending two years and more than $20 million to
promote the idea, collaborators in the Divided We Fail coalition — a
project of the seniors’ lobby AARP, the service workers' union, and groups
representing small business and the Fortune 500 — are divided over key elements of
how to fix health care.
There’s consensus on a vague set of general
principles that include making coverage more accessible, affordable and
efficient. But they differ over important details, including what roles the
government and private businesses should play.”

Just one deal-breaker: “Labor unions and liberal groups are pressing
for a universal health coverage system in which the government provides
insurance  
[some call it
“Medicare for All”] that competes with private plans. SEIU backs the concept, the Tribune reports, while “the Business
Roundtable and National Federation of Independent Business want a system based
mostly on private health insurance.

After all, the Business Roundtable's members include
health-insurance giants CIGNA, Aetna and
Humana,
companies that are absolutely opposed to having to compete with a government
plan
.  For one, they are
looking forward to 45 million new customers–the formerly uninsured who will
come, government subsidies in hand, to sign up for coverage. Private insurers
are insisting that there be a mandate requiring that everyone sign up for
insurance. They want a captive market, and they do not want to divide that market
with a government plan
, because for-profit insurers know that if they are
forced to compete on a level playing field, they probably would lose. The
private  insurers’  “administrative costs” —which include billions
spent for advertising, lobbying, profits for shareholders and sky-high
executive salaries –are enough higher than Medicare’s that it would be very
difficult for the private -sector companies to offer equally valuable coverage
at a competitive price.  Moreover, private
insurers fear the regulations that would put them on a level playing field with
a government plan. 
Though in
theory, innovative private-sector businesses should be able to go toe-to-toe
with a government bureaucracy.

Unions and business also
part company on President  Obama's "pay or
play" idea of forcing employers to either offer health insurance to their
workers or pay a fee so they can get it elsewhere.
Predictably, unions
support the idea;  business  groups are against any new requirements for
employers.

The
Advantages of Coalitions: Great PR

The schism “illustrate the limits of one of lobbyists' favorite tactics:
banding together with partners to try to build support for a top priority
,”
observes AP writer Julie Hirschfeld Davis, who penned the piece published in
the Tribune. “Such alliances are born
and die all the time in
Washington,
often falling victim to internal disputes over policy. Even the ones that
fizzle, however, can give those in charge a seat at the negotiating table.”

Here, she quotes blogger and health care policy consultant Bob Laszewski: “If
nothing else, ‘it's  fantastic public
relations’” for the leaders of the groups that join the coalition
,” Laszewski
notes "What you're doing is you're putting some political credibility,
some political capital in the bank for (when) the tough days come."

The Divided We Fail
group launched in 2007, the Tribune explains, “stressing its bipartisan nature
with a logo, a creature named Champ, which is an amalgam of the Democratic
donkey and the Republican elephant. Its purple hue is meant to signify a
melding of the two parties' primary colors.

“The coalition
is led by a handful of Washington's most influential lobbyists
— Bill
Novelli of AARP, John J. Castellani of the Business Roundtable and Dan Danner
of the National Federation of Independent Business — as well as Andy Stern of
the Service Employees International Union, among the most politically active
groups in organized labor. Together, their organizations spent more than $45
million lobbying Congress in 2008 — more than half of that by AARP alone.”

Why
Bi-Partisanship Isn’t Working in 2009

Today, in a separate phone interview, 
Bob Laszeweski  talked about the
limits of bi-partisan coalitions in 2009:
 “Divided We Fail” is a Bush-era thing.
Back then, everyone knew that we were not going
to get real reform
. So Karen Ignagni 
( president and chief executive of

America’s Health Insurance Plans) and Ron Pollack (director of Families USA) could
sit down in a room and agree on some things around the edges,” he explains.  But
now, Democrats are saying ‘why should we compromise with these people?’

  (As Ron Pollack acknowledged in a recent
HealthBeat post "The goal [of making strange bedfellows]
is not to establish a consensus, but to see how far the participants can go in
trying to find common ground.”  It seems
they may have gotten as far as they can. Pollack he made it clear: “there are
sharp dividing lines.”)

If Democrats seem intransigent it is because, as
President Obama puts it, “I won.” And over the past eight years, conservatives
rarely held out an olive branch. Indeed, sometimes they literally locked the
door, closing liberals out of the deal-making.

Now, liberals want meaningful health care reform,
and as I wrote in an earlier post,  
they are unwilling to compromise on what they see as basic values: 
Inevitably,
healthcare
reform will be
partisan
because it is all about our beliefs about what is fair
.
. . . Conservatives
believe that “the market ‘can solve our healthcare problems. Progressives believe
that you cannot count on ‘the market’ to decide in favor of the public good.
  In a second post on the topic, I quoted Yale law professor Frank Pasquale: “we should remember
commitment's place in the world of health care reform
. For me, that means universality–a strong commitment to a robust baseline of care for all–should be at the top of reformers'
agenda.”
Meanwhile, as we saw in the battle
over the fiscal stimulus package,
conservatives
remain committed to their agenda.

Where
We Are Now

Laszewski believes that by expanding SCHIP,  boosting Medicaid and helping the unemployed continue their
employer-based coverage under COBRA
(by paying 65% of the cost) Obama
already has done “more for healthcare” than most recent presidents.

But Laszewski
 doesn’t think that it will be possible
to pass major health reform legislation without bi-partisan agreement
.
“This issue is too controversial. When it comes to fiscal stimulus—you can get
a couple of Republicans,  get the 60
votes, and shove a bill through. With healthcare if you don’t have a big
consensus that takes you to 65 or 70 votes—if it becomes partisan– it is too easy to drive a Mack truck through
anyone’s plan and scare the daylights out of the American public. In that
situation you need more Republicans who will be willing to stand up and say “the
scary things those other Republicans are saying are lies
. This bill is
okay.” The problem is that those more centrist Republicans
who might stand up to Karl Rove’s “framing” of an issue were drummed out of the
Republican party long ago.

This leaves Congress sharply
divided.  Brad F., who e-mailed me the Chicago Tribune article, isn’t
surprised. “
It really is like the show, Survivor,” he says. “You start with sixteen people; everyone
feels each other out, and makes alliances.  But at some point, the final four have to look
at each other and say, ‘every man for himself’–the sandbox is not big enough
for everyone to play in.

For my part, I think that,
it may be healthy to recognize that health care reform will involve a knock-down
drag-out debate over bedrock beliefs and values.  Too often politicians “spin” the issues,
confusing the public.
In this case, it is imperative that they define
what is at stake as clearly and cleanly as possible
. Only then can the
American public decide where it stands.

19 thoughts on “Divided We Fail: Signs of a Schism

  1. I suspect that the % of constituents in most Republican Congressional districts who will obstruct health care reform is shrinking? No?
    To me the major impediment to reform is the “disese care” industries in all their iterations and intense lobbying power.
    I really don’t believe that this set of “disease care” industries,which has lost significant credibility and trust with the US public in very recent years, can scare the public again as it did in the 90s.(2009 IS NOT 1995) Things are much worse on many fronts.
    But I may be wrong?
    Dr. Rick Lippin
    Southampton,Pa

  2. While I am perfectly good with the government fielding a health program to compete with the private insurers, it is somewhat misleading to suggest that private insurance is worried about a “level playing field”. If government competes, there is no chance the playing field would be level – government would wind hands down. This is what the privates fear. Why? For starters, government has no obligation to show a profit. So, were the privates to improve their products to a point where they could match what the government has to offer-and make it available to all-they could never hope to sell such policies for as low a price as government. If government does make such an option available, the privates will have to innovate their way out of this problem. If they can do that -great. If not- who, except for their shareholders, is going to feel sorry for them? They have not behaved responsibly for many years. You should also keep in mind that the very “threat” that government may field an option to compete may be enough to force valuable concessions from the private insurance companies which we would all benefit from greatly.

  3. I am quite concerned about the cynicism and political maneuvering about this issue. OK, sure, lots of power and money at stake.
    We who deliver the care are now pretty much at the whim of those who pay the bills. Why not find a basic level of insurance for major medical, and then design a system that can provide for better basic care for which the insured AND the insurer bear the cost??
    We who provide will continue to care for our patients, and the reimbursement will be what it is. If we all chose to continue to be the most expensive system with the lowest outcome scores, so be it. Where IS the common good??
    CL

  4. Rick Ungar said: “If government competes, there is no chance the playing field would be level – government would wind hands down. This is what the privates fear. Why? For starters, government has no obligation to show a profit.”
    That begs the question should the pooled payer of proven and needed healthcare services (EMPHASIS ADDED) make a profit?? Should the proven provider of primary military protection for the country make a profit?? Now I am not implying that the system providers/participants should not make a profit, but the enablers of the social aspects of the system should probably NOT be making any more than they need to run the system, which almost always implies government.

  5. I agree that the private plans have little prospect of competing successfully with a government plan. However, the reason is much more straightforward and problematic than admin costs or profit margins in the long term.
    Private plans negotiate rates with providers. The government sets rates. Typically, private plans are paying 10-30% more than Medicare. If all care was delivered at the Medicare rate, we would have a major reduction in overall national health care costs. This creates a significant downstream challenge. Health systems operating on razor thin margins today would lose their one profitable line of business.
    Today, there is an annual effort to restore Medicare rates from the SGR reductions. In an environment of greater federal exposure to the costs of the health system and a resulting closer day of reckoning with Medicare trust fund insolvency, does anyone really think that reimbursement levels will be increased to compensate for the loss of privately insured patients? I didn’t think so.
    We could very quickly see a system fraught with insurance inequities converted to one in which significant components of the delivery system are bankrupt and dysfunctional. Interestingly, disproportionate share hospitals and health systems who have learned to survive on Medicaid rates may be more suited to survive in a rate-setting environment than the rest of the health system. Is the risk of delivery system meltdown a reason not to have a national funding mechanism? Not in my view. However, it’s important to go into the transformation with our eyes open and some consideration of these types of consequences.

  6. Minor technical point…the article is a wire article from the Associated Press. While it is true that it did appear in the Tribune, because the AP is a wire service, the article could have appeared in thousands of other publications as well (the Washington Post, US News and World Report, the San Francisco Chronicle and the Seattle Times are four of the hundreds of publications I came up with in a quick search that published this article). You can link to the article at the Tribune, but for the sake of accuracy, the article should be identified as an AP story that appeared in the Trib in order to credit the original source.

  7. Rick:
    I agree witn you that the private insurers have not acted responsibly for many years.
    However, neither has the government in its administration of Social Security and Medicare.
    What private insurer can compete with a government run health plan, in which the premiums are not retained in the “insurer,”
    there are no cash reserves in the “insurer,” and the “insurer” need not be concerned about profits or losses to survive?
    Don Levit

  8. Jared– thanks for hte head’s up about AP– but
    I guess you didn’t read the whole post.
    If you did, you would see that it identified the story as an AP story, gave the name of the AP writer. The only way to link it was to the Chicago Tribune–I did a Google “news”
    to see if it had appeared in WaPo,
    etc. It didn’t (or hadn’t as of yesterday morning.)
    I’m pretty scrupulous about linking, sourcing and giving credit where its due.

  9. Rick L, Rick U, Chris, NG,
    David, Don,
    Rick, I’m afraid that the % of well-insured Republicans who are reluctant to pay higher taxes to support universal coverage is not shrinking.
    Many people who feel secure that they will have healthcare just don’t take a collective view of the problem.
    Moreover, Republicans continue to oppose any sort of government regulation, and national health reform would involve regulating insurers, demanding more ongoing (post-market) evidnece about risks and side effects from drug-makeres and device-makers, insisting that hospitals make serious efforts to reduce errors, use surpluse to support palliative care, etc.
    Put it this way– less than half of white Americans voted for President Obama–and he was a very appealing charismatic candidate.(He received the same percentage of the white vote as Kerry. What pushed Obama over the edge was a larger share of African Americans, Latinos and Asians came out and voted for him.)
    So more than 1/2 of white America is still pretty solidly Republican, and as you from the fight in Congress over expanding SCHIP today’s Republicans are, by and large, ideologically opposed to many aspects of health care reform and universal coverage. (They didn’t even want to offer healthcare to poor LEGAL immigrant children.)
    So it’s not just the lobbyists. It’s also a matter of basic beliefs about what’s fair and what isn’t, what we owe each other in society and how much should be a matter of “individual resonsibilty.”
    Rick U.–
    It depends on what you mean by “a level playing field.”
    You seem to mean a playing field where all involved would have an equal chance of makign a profit.
    I mean a playing field where all involved would play by the same rules in terms of the quality of the product that they offered patients, and whether or not they could “cherry-pick.” A level playing field also would mean that if one insurance plan attracted a larger share of very sick patients, it would be compensated (by the govt) on a “risk-adjusted” basis.
    But to my mind, the point of the “game” of healthcare is not making profits. The point is providing the best care possible to improve the health of U.S. citizens.
    In this, healthcare is unlike most industries.
    It is providing a necessity– in that it is like utilities that provide heat and light.
    Traditionally, we have not expected (nor encouraged) utilities to be high-profit businesses. Typically, they promised investors a steady dividend–that was it. They were tightly regulated to keep prices as low as possible so that everyone could affod heat and light.
    Today, many people cannot afford medical care. Thus we cannot afford a system that is set up to pay the middlemen (private insurers) a handsome profit.
    If insurers are innovative enought to figure out how to make a profit while competing, on fair terms, with non-profits or the government– good for them!
    This would improve the system.
    But if they can’t figure out a way to make a profit–that’s too bad. We cannot afford to hand it to them.
    So, basically, I agree with you when you say: ” If government does make such an option available, the privates will have to innovate their way out of this problem. If they can do that -great. If not- who, except for their shareholders, is going to feel sorry for them? They have not behaved responsibly for many years.”
    Finally, I suspect the best case scenario would be to have non-profits competiting with a government plan. I think the Kaiser’s of the world might well be able to offer innovative alternatives to a government plan–without cheating.
    This would keep a govt plan on its toes. And also offer protection against the day when Jed Bush becomes president.
    I”m not kidding–we don’t always elect good, responsible governments. And in an era when a less-than competent govt is in charge of Washington, I’d like a Kaiser as an alternative for my healthcare . . . (Think of what Thatcher did to the NHS when it was the only game in town. The British were stuck with an hugely underfunded system.)
    I probably shouldn’t suggest Thatcher was incompetent, just mean-spiritied when it came to public programs.
    Chris–
    The common good clearly isn’t being the most expensive system with the poorest outcomes. For one, about 80% of Americans cannot afford to be part of the most expensive system.
    So we do need to reform health care– to move toward evidence-based medicine while squeezing out the hazardous waste (unncessary hospitalizations, surgeries,unproven, over-priced and risky drugs and procedures, etc.)
    Healthcare is a public good— providing heat and light — where weneed govt’ regulation.
    NG– You write: That begs the question should the pooled payer of proven and needed healthcare services (EMPHASIS ADDED) make a profit?? Should the proven provider of primary military protection for the country make a profit?? Now I am not implying that the system providers/participants should not make a profit, but the enablers of the social aspects of the system should probably NOT be making any more than they need to run the system, which almost always implies government.”
    Very well-put. I would add only that honest non-profits in the private sector also coudl be part of the mix. In teh past (before for-profit insurers began to dominate the business) there were some very good non-profit insurers (I’m not thinking of the Blues. I am thinking of the way Kaiser operated before it was forced to compete with the for-profits on their terms–which meant offering high-deductible plans. Kaiser’s CEO told me that from a social-policy point of view, he thought high deductible plans were a bad idea (too many people defer needed care, and goo many poor people buy them because they can’t afford higher premiums, but then cannot afford to use the high-deductible plan when they need help.)
    David–
    No one believes that physicians rates will be slashed, across the board, to meet the SGR formula.
    The vote last summer in Congress made that clear.
    No health care reform plan calls for slashing physicians or hospital rates across the board.
    Nor has the Medicare Payment Commission or the Congressional Budget oFfice suggested this.
    This is, I’m afraid, just fearing mongering by the more conservative elements of the AMA.
    What virtually all reform plans, plus MedPac and the CBO do recommend is adjusting the way we pay health care providers, first, by adjusting the fee schedule with a scalpel, not an axe, RAISING PAYMENTS for PRimary Care, Family Doctors, Pedicatiricans, General Surgery, Palliative Care and other relatively poorly paid areas of cognitive or general medicine while Lowering Fees for services that are extremely lucrative, done too often, and are of little benefit to the patient when you compare risk and benefit to the risk and benefit of
    less well-paid treatments.
    Those doctors on the top of the income ladders (earning, say, $500,000 to $2 million a year or more are, understandably, not happy to learn that some fees for some services may be cut.
    But all fo the reform plans would make the cuts based on comparative effectiveness information about what benefits the patient.
    Until now, as I and others have explained, these fees were set by a very secretive RUC committee that is someinated by specialists. No surprise, certain specialities were over-paid very certain services.
    MedPac and others talk about adjust doctors’ fees in a “budget neutral way”–in other words, the total amoutn that Medicare paid would remain the same, but the dollars would be redistributed to pay more for the services that most help patients.
    Secondly, down the road, Medcare plans to move away from paying “fee for service” altogether because this encourages doctors and hosptials to focus on increasing the volume of what theydo (which they have been doing. Which is why some doctors are in such a hurry when they see you.)
    Instead, Medicare will begin rewading doctors and hosptials for the quality, not the quantity of care.
    Whether we are talking about Medicare or non-profit private sector insurers, or even for-profit private sector insurers, this is the way health care providers will be paid in the future.
    The extremes — of lowly-paid primary care physicians— and multi-milionaire radiologists and surgeons — will disappear, because healhtcare will no longer be a “game” where the entrepeneur who does hte most and sells the most,
    takes home the biggest pile of chips.
    I am not suggesting that this is how most physicians or even most hospital CEOs think–but it is a problem, and does explain why we spend so much more on doctors and hospital services while getting outcomes that are no better, and often are worse.
    Don– See NG’s comment. I think he said it bettter than I can.

  10. While coalitions were/are expected to be more of a driving force in health reform and other policy initiatives in 2009, clearly things are breaking down. I wrote about this in December (See – http://www.healthpolcom.com/blog/2008/12/15/health-reform-in-a-changed-political-and-policy-environment/), and concluded that the success of coalitions would “…depend upon the specifics of health reform proposals, how they are presented in the context of economic stimulus or recovery, (both for direct jobs creation/salvation and unburdening of American companies), how desperate the coalition members are to see change, and how well these coalitions and others execute the new principles and practices for the changed political and policy environment described in the National Journal article, and which are being embodied in post-election community organizing efforts.”

  11. Maggie,
    Thanks for your response. I should not have included the SGR in my note since it confounded my main point. I agree that there is likely to be substantive rejiggering of physician payments and that, assuming a bill can be passed, the structure of physician payments are likely to improve the lot of the cognitive specialties at the expense of the proceduralists. Works for me.
    My main point was that Medicare doesn’t negotiate rates. Private plans do. They typically have to pay 10-30% more than what Medicare pays.
    Most health systems have margins of 0-5%. Most of them lose money on all of their publicly funded patients and make up the difference on privately insured patients. If private funding goes away, those systems will be losing money. It’s unlikely that the reform bill will increase overall fees and DRG rates to backfill the lost private plan revenue difference. This will cause significant heartburn in hospital and health system boardrooms. Understanding and preparing for that eventuality is going to be an important challenge for health system leaders.

  12. David– Thanks for the clarification. I think we are on the same page.
    Let me add: If we have universal coverage, hospitals and medical centers will no longer be forced to “eat” the cost of caring for uninsured poor patients.
    In addition, some reform proposals argue that Medicaid payemnts should be raised to the same level as Medicare payments. (As you know, right now Medicaid pays significantly less for precisely the same procedure.)
    I absolutely agree.
    With higher Medicaid payments, no uninsured, and better Medicare payments to encourage providers to do things they would like to be able to do (better cognitive care),many hositals shoudl be better off than they are now.
    Also, doctors and hospitals tell me that the one thing they like about Medicare is that, even though it does not pay as well as private insurers, it does pay in a timely fashion. And you do not have to spend time on the phone, or re-submitting bills. . .
    So if Medicare-for-all took on a larger share of the system, this could reduce administrative costs for doctors and hospitals, another facgtor that could off-set the lower payments.
    The only losers–as I see it–those hospitals and srugical centers that have focused on the most lucrative treatments, invasive cardiac treatments, for instance, and in some cases, regularly overtreating.
    If some of them went out of business, and general hospitals, this would not be a loss for the system. I’d like to see them replaced by smoking cessation clinics (with the clinics paid approrpriately for the service.)
    If we did fewer angioplasties, and helped more patients stop smoking (which we know how to do) we could save many more lives . . .
    Michael–Thanks for the link. When I have a chance, I’ll look at it.
    You write that one factor will be “how desperate the coalition members are to see change . . .” I’m afraid that many businesses as well as insurers are interested only in seeing change that will benefit their bottom line.
    Insurers are desperate for more customers, so they want a mandate, and they don’t want to share that market with a public sector plan.
    Many businesses want to see their health care costs lowered. While some are interested in the larger social good–healthier employees– their profits, and their shareholders, come first.
    Also, many of today’s corporations view their
    employees as a short-term invesment. With lay-offs, down-sizing and job-hopping, they don’t expect the employee to be with them 10 years down the road. So the question of whether or not he gets prventive care today is less important.

  13. Maggie wrote:
    Finally, I suspect the best case scenario would be to have non-profits competing with a government plan.
    I think the Kaiser’s of the world might well be able to offer innovative alternatives to a government plan without cheating.
    In a paper issued by the IRS, it states,
    “In 1986, section 501(m) was added to the Internal Revenue Code. The section states that an organization described in IRC 501(c)(3) or 501(c)(4) may be exempt from tax under IRC 501(a) only if no substantial part of its activities consists of providing ‘commercial-type insurance.'”
    “The references contained in the House and Conference Reports concerning health insurance provided by tax-exempt HMOs do not mean that such entities will never be recognized as providing commercial-type insurance within the meaning of section 501(m). Rather, each case must be analyzed in light of the existing precedent concerning the definitions of insurance in other areas of the Code and in light of the legislative intent behind IRC 501(m). In making the analysis, certain factors must be examined. These include, but are not limited to, the following; whether a risk is being transferred and distributed; and to what extent the entity is operating in a manner similar to for-profit insurers; and whether, and to what extent, the entity is marketing a product similar to for-profit insurers.”
    So, we can see that to fully earn its tax-exempt status, a not-for-profit insurer should operate and market products in a manner that is distinctly different from what we have been used to.
    Think of the possibilities.
    If one is considering a more intimate arrangement, in which the participants have more control over the operation and the products, a 501(c)(9) could be very effective.
    The paper can be found at:
    http://www.irs.gov/pub/irs-tege/eotopicc88.pdf.
    Don Levit

  14. I’m a white Republican and I voted for Obama.
    We have public schools and private schools. The sky didn’t fall, we didn’t turn Red, and the entire country wasn’t confounded by how we could ever have private schools “competing” with public schools. I may be oversimplifying but many are over-complicating.

  15. Don & Lisa –
    thanks for the comments.
    Don, Yes, I too think that
    non-profits competing with a govt plan could be ideal.
    Lisa– you’re right–though the difference is that most private schools are not trying to make a profit. they’re non-profits, like the non-profit insuers Don & I would like to see competing
    with a public-sector lan.
    I didn’t know you were a Republican– this pleases me. Further proof that HealthBeat has a diverse readership!

  16. We have non profit hospitals and health care networks as well. The hospital we were in is a non-profit. Much like the non-profit private schools, I suspect, they’re all about making money. The CEO of our non-profit hospital…I’ll get back to you with the precise statistic in fact I’ll say no more until I have the facts, but his salary rivals Wall Street. Wait, I don’t have to tell you this, you literally wrote the book on Money Driven Medicine, Maggie I’m standing by my comparison to public and private schools.
    Democrat or Republican this is the place to be if you’re interested in health care reform. Health Beat Blog is hip, it’s very now, it’s very informative, very fair and I for one thank you for that, Maggie.

  17. Lisa:
    I agree with you that the non-profit label can be misused.
    Technically, whether an organization is for-profit or not-for-profit is a state definition.
    Being tax-exempt is a federal definition.
    Yes, people can abuse the privileges of tax-exempt status, just like people can abuse the privilege of applying Bible wisdom.
    My comment about earning and maintaining the federal tax exempt status of a 501(c)(9) is that these “insurers” have the opportunity to set themselves apart from commercial insurers, to offer distinctive products and ways of operating, to be a light unto the Aetnas and United Health Cares.
    If they squander that opportunity, the fault does not lie with the tax-exempt designation.
    Don Levit