Time to divest from insurance companies?

From Alice Faryna M.D., Columbus, OH

After hearing someone say that health care reform is the civil rights issue of this decade, I retrieved the 1966 speech on civil disobedience by Dr. Martin Luther King. The two strategies described were marches and boycotts. His marches were successful because large target populations could be found in cities like Chicago and Atlanta , and quickly reached through churches. The single-payer movement has not been able to find such concentrated populations. Our rallies in D.C. and the Mad Docs tour in 2009 did not produce numbers of sufficient size to command attention. Let’s consider boycotts.

Dr. King said, “There is nothing quite so effective as refusal to cooperate economically with the forces and institutions which perpetuate evil in our communities.” Under the leadership of SCLC, refusing to buy products from companies which do not hire Negroes (sic), resulted in an increase of income in that community by more than $2 million annually.

Another example is the boycott organized by the Committee of African Organizations (CAO) with support from South Africa ’s Liberal Party in 1959. Additional support grew in British organizations and international labor movements. South African products came off the shelves. Eventually apartheid ended.

Paul Krugman recently commented on the sharp increase in premiums announced by WellPoint in their California individual market. WellPoint is not the villain. The current system invites a death spiral for the insurance industry which relies on large a large pool containing healthy clients to keep costs down. In the current economy, cash-strapped workers drop coverage resulting in a smaller, sicker pool. Legislation which bans discriminatory practices will further increase premiums and hasten the death spiral.

I suggest that PNHP and other organizations support disinvestment in companies which are on an unsustainable path. A precedent exists for pension fund managers to do this: In 2002, CALPERS embarked on a series of “socially responsible” investment boycotts starting with Asian companies which violated guidelines on human rights and labor standards. Also targeted were companies like Disney, Safeway, the New York Stock Exchange, and health maintenance organizations.

We could begin with encouraging PNHP members to purge their personal portfolios of health insurance companies; I have already done so. I intend to approach the STRS board with a request to divest from companies likely to see a sharp stock price reduction. Money talks.

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