“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,” Wendell Potter, Cigna’s former vice president for corporate communications, told members of the Senate Commerce Committee. He c0ntinued:

Insurers make promises they have no intention of keeping, they flout regulations designed to protect consumers, and they make it nearly impossible to understand — or even to obtain — information we need.

The deception, of course, is by design. Publicly traded companies don’t exist simply to make profits, they exist to make more profits today than they did yesterday. Why else would anyone invest in them? And in the case of private insurers, what easier way to pad the bottom line than to deny expensive claims by stonewalling confused patients?

Potter expands, somewhat technically, in his written testimony:

The top priority of for-profit companies is to drive up the value of their stock. Stocks fluctuate based on companies’ quarterly reports, which are discussed every three months in conference calls with investors and analysts. On these calls, Wall Street looks investors and analysts look for two key figures: earnings per share and the medical-loss ratio, or medical “benefit” ratio, as the industry now terms it. That is the ratio between what the company actually pays out in claims and what it has left over to cover sales, marketing, underwriting and other administrative expenses and, of course, profits.

To win the favor of powerful analysts, for-profit insurers must prove that they made more money during the previous quarter than a year earlier and that the portion of the premium going to medical costs is falling. Even very profitable companies can see sharp declines in stock prices moments after admitting they’ve failed to trim medical costs.

There are other schemes the companies use to bolster profits, Potter said. They often dump sick customers by locating some minor disqualifying technicality in their coverage application — the omission of a minor illness, for example.

Companies also have techniques for dropping entire policies for small businesses when coverage costs grow higher than expected. “All it takes is one illness or accident among employees at a small business to prompt an insurance company to hike the next year’s premiums so high that the employer has to cut benefits, shop for another carrier, or stop offering coverage altogether,” Potter said.

Wednesday’s hearing coincided with the release of a Commerce Committee report finding that insurers have underpaid their customers by billions of dollars, forcing those costs on patients instead. The timing of the report is hardly insignificant. Democrats in Congress and the White House are pushing hard for a public option to be included in their sweeping health care reform strategy this year. To private insurers, though, the idea of having to compete with a government-backed plan is anathema, and they’re fighting tooth-and-nail to defeat the proposal.

Republicans, almost universally opposed to the public option, have sided with the private insurers. And that didn’t change during yesterday’s hearing even in the face of Potter’s damning insider testimony. Indeed, The Washington Post reported that Sen. Mike Johanns (R-Neb.) questioned why anyone should think that folks would have an easier time getting coverage under a government plan than they do from private companies. (Seems he missed the part about the manufactured confusion the for-profit companies employ to avoid paying claims.)

The moral of the story? “As you hold hearings and discuss legislative proposals over the coming weeks,” Potter warned, “I encourage you to look very closely at the role for-profit insurance companies play in making our health care system both the most expensive and one of the most dysfunctional in the world.”

The story began in early 2007, when McCain’s wife, Cindy, made an online request for the company to improve service at the 15-acre property — which Peter Thonis, a Verizon spokesman, said was denied. However, as The Post article demonstrates, this is not exactly true.

On Sept. 18, 2007, a Mesa, Ariz., contractor working for Verizon surveyed the McCain property. Another contractor drafted blueprints (see document – note large file size) calling for moving a utility shed and installing a 40-foot tower with two antennas and a microwave dish, surrounded by a six-foot wooden fence.

Construction costs would be $22,000, records show. Industry specialists said the figure probably only covers the tower and fence because the antennas, the dish and power source would run the cost into the six figures. On Dec. 4, Cindy McCain signed a letter (see document) authorizing Verizon Wireless to act on her behalf to seek county land-use permits.

Coverage maps submitted by Verizon to the county show that the tower would fill gaps in unpopulated parts of Coconino National Forest and on about 20 parcels of land, including a handful of residences, and two small businesses open only by appointment.

The Atlantic’s Joshua Green acquired an internal map of the area, from a Verizon engineer’s report, that reveals the company was acutely aware of who owned the property being considered for a permanent tower:

Green also reports that Verizon commissioned an expensive environmental survey of the property, which required an archaeological study to ensure the tower would not be constructed on sacred Indian land.

As Green notes, the McCains may not have specifically requested a favor from the telecom company, but the evidence does seem to suggest that they were prepared to accept a big one.

If so, you’ve probably wondered if there was anything you could do about it. As it turns out, there is — as long as you happen to be married to a powerful senator who sits on the the Senate Commerce Committee.

In June of this year, Verizon Wireless delivered, free of charge, a portable cell phone tower to the 15-acre estate near Sedona, Ariz., owned by Sen. John McCain and his wife, Cindy, according to The Washington Post. In July, AT&T provided another portable tower. One year earlier, Cindy McCain had put in a request on Verizon’s Website to improve cell phone service at her residence.

Over the course of the past year, Cindy McCain had offered land for a permanent cell tower and Verizon embarked on an expensive process to meet her needs, hiring contractors and seeking county land-use permits even though few people other than the McCains would benefit from the tower…

On Sept. 18, 2007, a Mesa, Ariz., contractor working for Verizon surveyed the McCain property. Another contractor drafted blueprints (see document) calling for moving a utility shed and installing a 40-foot tower with two antennas and a microwave dish, surrounded by a six-foot wooden fence.

Construction costs would be $22,000, records show. Industry specialists said the figure probably only covers the tower and fence because the antennas, the dish and power source would run the cost into the six figures.

Why would Verizon and AT&T undertake such expenses on behalf of a very small number of customers? There is at least one possible explanation.

Ethics lawyers said Cindy McCain’s dealings with the wireless companies stand out because Sen. John McCain is a senior member of the Senate Commerce Committee, which oversees the Federal Communications Commission and the telecommunications industry. He has been a leading advocate for industry-backed legislation, fighting regulations and taxes on telecommunications services.

McCain and his campaign have close ties to Verizon and AT&T. Five campaign officials, including campaign manager Rick Davis, have worked as lobbyists for Verizon. Former McCain staffer Robert Fisher is an in-house lobbyist for Verizon and is volunteering for the campaign. Fisher, Verizon chief executive Ivan Seidenberg and company lobbyists have raised more than $1.3 million for McCain’s presidential campaign and Verizon employees are among the top 20 corporate donors over McCain’s political career, giving more than $155,000 to his campaigns.

McCain’s Senate chief of staff Mark Buse, senior strategist Charles R. Black Jr., and several other campaign staffers have registered as AT&T lobbyists in the past. AT&T Executive Vice President Timothy McKone and AT&T lobbyists have raised more than $2.3 million for McCain. AT&T employees have donated more than $325,000 to McCain campaigns, putting the company in the No. 3 spot for career donations to McCain, according to the nonpartisan Center for Responsive Politics.

“It raises the aura of special consideration for somebody because he is a member of the Senate,” said Stanley Brand, a former House counsel for Democrats and an ethics attorney who represents politicians of both parties. “Here is a guy who is campaigning as Mr. Maverick and Mr. Reformer and he keeps skirting the edge.”

Some may note that, because McCain is the Republican presidential nominee, his security detail provided by the U.S. Secret Service may require solid coverage to perform its duties. According to the post, the service could have made do with the existing coverage, because it relies on multiple layers of communications, including radio. However, the plans for the permanent tower on the property were well underway by the time the Secret Service contacted Verizon and asked to speed up the process after Memorial Day. The portable towers then arrived promptly.

The Post reports that plans for the permanent tower were killed soon after the newspaper put in a records request, Verizon killed the project, saying “it doesn’t make business sense.”

Not surprisingly, the McCain campaign denies McCain’s position or connections to the telecommunications industry’s lobbyists played any role in the extraordinary attention the Arizona senator received.

And maybe they didn’t. But next time you find yourself living somewhere with sub-par cell phone service, just for fun, why not give Verizon or AT&T a call and request your own personal cell-phone tower and see how quickly they spring into action.