ABC, CBS, NBC Join Obama's Attack on Insurance Companies

In an attempt to garner support for liberal health care “reform” legislation, President Barack Obama has ramped up the anti-insurance company rhetoric in the past month. He seized upon 39 percent premium hikes on some California customers of Anthem Blue Cross.


In a March 8 speech, Obama condemned insurers, saying, “Every year, insurance companies deny more people coverage because they have a preexisting condition. Every year, they drop more people's coverage when they're sick and need it most. Every year, they raise premiums higher and higher.” He then cited Anthem’s attempt to “jack up rates” in California. Other administration officials have also publicly criticized Anthem.


Those attacks on Anthem and its owner WellPoint Inc. weren’t merely repeated by network news reports, in a number of cases journalists took up Obama’s case criticizing an industry “out of control.” Network news reports failed to point out many industries have larger profit margins than health insurers (3-5 percent on average according to AHIP), interviewed administration officials without opposition, and stacked guests against company representatives in several instances.


After discussing the matter with notoriously anti-business former governor N.Y. Eliot Spitzer, CBS’s Harry Smith supported his claim that the “insurance industry is out of control right now” stating that it was the “consensus” opinion.


ABC’s Diane Sawyer wanted someone to put a stop to increasing premiums. On Feb. 24, Sawyer asked who will “keep insurance companies from jacking up premiums while making huge profits?” And George Stephanopoulos cited Anthem as an example of price gouging on Feb. 25.


Others like CBS’s Bill Plante couldn’t fathom that there could actually be reasons for rate hikes.


Plante told “The Early Show” viewers on Feb. 22, “The Obama [health care] plan includes a new provision to prevent arbitrary rate hikes like a recent 39 percent jump for nearly 700,000 consumers in California.”


Many stories mentioned the rate hikes or the Obama administrations complaints without including any defense from the insurance industry. Some segments stacked interviewees against Anthem, like “Good Morning America” on Feb. 17 that asked if such rate hikes “are even legal.”


Bianna Golodryga’s report included three people attacking Anthem: a customer facing rate hikes, Obama and Richard Kirsch of the liberal activist group Health Care for America Now (HCAN). She included only one defender – Brad Fluegel, VP of Strategy for Anthem Blue Cross – who said that the average rate increase was closer to 24 or 25 percent.


Golodryga, by the way, is connected to the Obama administration through her engagement to Obama’s budget director Peter Orzsag.


WellPoint’s CEO Angela Braly was also grilled on Capitol Hill Feb. 24 for the premium increases.


Braly told legislators that the hikes stemmed from rising health care costs “driven by many factors, including hospitals and other health care providers charging higher rates, new medical technology, under-payment by government programs, the growth in chronic diseases and conditions like obesity, and an aging population. These increases are greatly compounded when younger, healthier members drop their insurance – leaving those who most need health care to foot the bill.”


Even though Obama claims that such rate increases are a “preview of coming attractions” without health care reform, WellPoint disagreed. On March 10, the company’s CFO Wayne DeVeydt called the California premium hikes a “preview of what health-care reform is going to look like.” He said Obama’s health care reform would force the healthy out of the market, while doing nothing to control costs.

Networks Leave Out State Regulations, Context for Profits


While Anthem or WellPoint spokesmen were quoted in some network reports in the past month, their full defense wasn’t presented.


AHIP issued a statement on its Web site regarding premium increases and supplied information the networks should have provided to its viewers. The networks reports mostly ignored the fact that even without federal intervention health insurers are required “to provide actuarial justification for any premium increases” to state regulators.

According to AHIP, “Federal government data confirms that rising health care costs are driven by increased spending on hospital care, physician services, and prescription drugs.”


Morning and evening news programs on ABC, CBS and NBC also failed to put health insurance industry profits in context. The insurance and managed care part of the health care sector had a profit margin of 2.2 percent in 2008 – ranking 35th behind engineering/construction, computers/office equipment, information technology services, food services and many other sectors – according to Fortune 500.


WellPoint had a net profit margin of 7.3 percent in 2009, but that was lower than Disney and Viacom which own ABC and CBS respectively. Disney made 9.98 percent net profits for the year, while Viacom made 11.51 percent. Of the network owners, only  NBC’s owner General Electric made less than WellPoint – by one-tenth of one percent.


Other companies had margins more than double WellPoint’s. Apple Inc. earned 19.19 percent, while Google made 27.57 percent.


According to MarketWatch, WellPoint’s profit margin increase partially due to a “one-time windfall realized from the sale of a subsidiary.” Without that sale, “net margins still would have risen to roughly 3.5% from the 2.2% posted in 2008.”



Media Help Obama Vilify Industry


Karen Ignagni, CEO of America’s Health Insurance Plans, a lobbying group representing insurers, said in a statement that “it’s time to stop the politics of vilification and focus on what Americans need most: real health care reform that addresses the serious and urgent problems facing our nation.”


She should have been addressing the network news. Vilification was exactly what the networks allowed Obama and administration officials Robert Gibbs and Kathleen Sebelius to do in the past month.


Sebelius appeared unopposed on “Good Morning America” and “The Early Show” March 4 to berate Anthem for its “jaw-dropping increases” while making a profit. Her attack was not disputed by reporters on either program.


In some cases, the broadcast news did the vilifying too. Take Erica Hill’s CBS report from “The Early Show” Feb. 25. Hill began the brief segment by mentioning a lawmaker “mocked an insurance executive” for trying to increase premiums. She then showed the exchange which portrayed WellPoint’s CEO negatively:


Rep. Janice Schakowsky: “How much money do you make?” 

Angela Braly: “My salary is $1.1 million. I was -- I received stock compensation with a value of $8.5 million and last year an annual incentive payment of $73,000.”

Rep. Janice Schakowsky: “Well, of course it makes sense then that you would need a - a- big rate increase, now that you’ve told us that.” 


Hill then concluded her segment saying, “That California company wants to increase rates that it charges by up to 39 percent.” She didn’t include any of the explanation for rate hikes Braly submitted to lawmakers. Like most of the reports, Hill also failed to mention that all rate increases are already subject to state regulations.


According to the Society of Professional Journalists’ Code of Ethics, which many journalists claim to embrace, they are supposed to “Support the open exchange of views, even views they find repugnant.” Instead, in story after story they allowed the anti-insurance position to dominate their reports.