Conflict of Interest: Big Insurance and Big Tobacco


Have you ever wondered why health insurance companies don't cover smoking cessation programs? Such programs seem like a natural fit given the amount of acute and chronic disease that could be avoided when smokers quit.

A new study published in the New England Journal of Medicine provides an answer: economic interests. According to a story published on Facing South, major U.S. and Canadian health insurance companies are heavily invested in Big Tobacco, owning billions of dollars worth of tobacco company stock.

The report found that seven health and life-insurance companies in both the United States and overseas have nearly $4.5 billion invested in companies whose affiliates produce cigarettes, cigars and chewing tobacco.

"Although investing in tobacco while selling life or health insurance may seem self-defeating, insurance firms have figured out ways to profit from both," (said Wesley Boyd, the new report's lead author and a faculty member of Harvard Medical School.) "Insurers exclude smokers from coverage or, more commonly, charge them higher premiums. Insurers profit -- and smokers lose -- twice over."
"It's the combined taxidermist-and-veterinarian approach: either way, you get your dog back," study co-author David Himmelstien explained. "If you own a billion dollars [of tobacco stock], then you don't want to see it go down, you are less likely to join anti-tobacco coalitions, endorse anti-tobacco legislation, basically, anything most health companies would want to participate in."

Moreover, healthcare advocates point to this study as another reason why health insurance coverage should not be left in the hands of private insurers. Himmelstein asked, "Is this who we want running our health care system?"

Last week, the U.S. Senate passed a bill that will put tobacco products under the Food and Drug Administration, giving the agency power to regulate them, short of banning cigarettes and other tobacco products outright. Health advocates say that's a big step forward. But lobbyists for insurers remain a big voice in the health care reform debate in Congress, and it's that influence that has likely taken the single-payer option off the table, according to the story.

For years health advocates have been calling for a government-financed nationalized health plan—in the form of single-payer legislation. Even though most physicians, health officials and health advocates support single-payer legislation, the option has been excluded from the current debate in Congress. In a single-payer system, as envisioned by most advocates, the federal government would pay for basic medical care delivered by public and private health professionals. The money would come from taxes, and medical bills would go directly to a government insurance plan, similar to Medicare.
The Harvard doctors involved in writing the recent study … also support a single-payer plan and point to their report as just another reason why health insurance coverage shouldn't be left in the hands of private insurers.
Not only have health insurers and drugmakers contributed millions of dollars to members of Congress, but the powerful private health insurance lobby, along with other corporate and political interests, have been derailing efforts at healthcare reform for years. Observers say this intense lobbying is likely the reason the single-payer option has been largely dismissed from the healthcare reform debate.

Read the whole story.

Previous Comments


I don't feel like single payer is the only viable option. Older people (like my mother) who is well covered by the kind of quality health insurance retirement benefit that no one can get anymore would be ill served (no pun intended) by being forced to change. I would be happy with public option health plans which would provide coverage options at a reasonable (much lower) cost to those who can't afford them now, and subsidies for the poor. Insurance companies will fight it tooth and nail because they won't be able to compete without lowering costs (gasp) or improving service (double gasp). I hope the insurance companies lose this one.


If anyone has any doubts that this industry holds its customers in total contempt, this story should banish that thought immediately. It's absurd that the health and life-insurance industry is heavily invested in products that eventually kill half their consumers. This is just one more example of public corporations that exist only to make money for their shareholders. How they do it—with a complete lack of responsibility or accountability—is especially hard to take in an industry that maintains control over people's health. The depths of corporate irresponsibility and the brazen race for profits never fails to boggle my mind. Like the doctor said, "Is this who we want running our health care system?" I don't think so.



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