Ex-executive accuses insurance giant of ‘purging’ customers

updated 11:26 a.m. EDT, Thu July 2, 2009

By Jim Acosta and Bonney Kapp
CNN’s American Morning

PHILADELPHIA, Pennsylvania (CNN) — Wendell Potter says he is finished
defending the insurance industry, which he says is "beholden to Wall
Street."
Wendell Potter once was a vice president in the public relations
department for insurance giant Cigna.

Wendell Potter once was a vice president in the public relations
department for insurance giant Cigna.

At a hearing last week before the Senate Commerce Committee, the
former vice president of corporate communications at the insurance
giant Cigna testified, "I know from personal experience that members
of Congress and the public have good reason to question the honesty
and trustworthiness of the insurance industry."

The committee’s chairman, Jay Rockefeller, D-West Virginia, told
Potter, "You are better than Russell Crowe on ‘The Insider,’ "
referring to the award-winning 1999 film about cigarette company
executive Jeffrey Wigand, who blew the whistle on the tobacco
industry’s practices.

In his testimony and during an interview with CNN, Potter described
how underwriters at his former company would drive small businesses
with expensive insurance claims to dump their Cigna policies. Industry
executives refer to the practice as "purging," Potter said.

"When that business comes up for renewal, the underwriters jack the
rates up so much, the employer has no choice but to drop insurance,"
Potter said.

CNN obtained a transcript of a 2008 Cigna conference call with
investors in which company executives use the term "purge."

But in an e-mail to CNN, Cigna spokesman Chris Curran denied the
company engages in purging.

"We do not practice that. We will offer rates that are reflective of
the competitive group health insurance market. We always encourage our
clients to compare our proposed rates to those available from other
carriers," Curran wrote.

Cigna had revenue of $19.1 billion in 2008, according to the company
Web site.

Potter started thinking about leaving Cigna in 2007 after he visited a
medical charity event at a Virginia fairground.

"It was almost like an electrical jolt," Potter said.

At the event, Potter took pictures of doctors offering free health
care to the uninsured.

"The volunteer doctors were seeing patients in barns, people in animal
stalls," Potter said. "It changed it for me."

He says he finally decided to quit in 2007 after Cigna’s controversial
handling of an insurance claim made by the family of a California
teenager, Nataline Sarkysian.

The Sarkysian family made repeated appeals at news conferences for
Cigna to approve a liver transplant for the 17-year-old, who had
leukemia. Cigna initially declined to cover the operation, then
reversed its decision.

Sarkysian died hours after the company’s reversal.

As Cigna’s spokesman during the controversy, Potter had no role in the
decision to deny coverage. But he was inundated with angry phone
calls.

"After she died, my voice mail and my e-mail inbox were just filled
with messages from people who were just outraged, " Potter said.
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Now a senior fellow on health care for the nonpartisan watchdog group
Center for Media and Democracy, Potter writes a blog on health care
reform. In particular, he is keeping an eye on efforts to defeat
legislation that would give Americans the option of joining a
government health care plan, something he now supports.

He says he witnessed how the insurance industry torpedoed health care
reform efforts during the Clinton administration.

"They conduct what I call duplicitous PR campaigns. They’ll say what
people want to hear," Potter says. "It’s how they operate. You cannot
trust these guys."

Potter is also taking aim at some of the TV commercials aired by
groups opposed to changes. One such ad caught Potter’s eye. Run by the
conservative organization Patients United Now, the ad says that "now,
Washington wants to bring Canadian-style health care to the U.S."

"Sometimes you’ll see misleading information. And sometimes you’ll see
outright lies, like that [ad] is," Potter said, referring to the spot.

Patients United Now spokeswoman Amy Menefee disagreed.

"We’re not saying there’s a Canada health care act of 2009," Menefee
said. "It is a trend. It’s trending in that direction."

Potter notes that the leading proposals for health care in Congress do
not seek to set up Canadian-style health care in the United States. He
says claims that overhauling the system would lead to "rationing" of
care are missing his point.

"What we have is rationing by corporate executives who are beholden to
Wall Street. And it happens all the time," Potter said.