Hannity falsely claimed Obama called insurance execs “bad people”

Written by Dianna Parker

Published

On his Fox News show, Sean Hannity falsely claimed that President Obama said during his health care speech that insurance company executives are “bad people,” and that Obama's remarks “took [Hannity] back because it was so harsh.” In fact, as was made clear by the video Hannity himself showed, Obama said just the opposite -- that "[i]nsurance executives don't [treat their customers badly] because they're bad people; they do it because it's profitable."

From the September 9 edition of Fox News' Hannity:

HANNITY: One of the things, Frank, you have been very, very clear about -- and I think our audience has learned a lot from you as we've done our dial groups and our focus groups, etc. -- is this tendency to go negative. And he had a very different tone on Monday, but when he said tonight that insurance executives are bad people, it took me back because it was so harsh, and I think unfair, but it's part of their polling. Let's roll this tape, and I want to get your reaction to it.

OBAMA [video clip]: Without competition, the price of insurance goes up and quality goes down. And it makes it easier for insurance companies to treat their customers badly by cherry-picking the healthiest individuals and trying to drop the sickest, by overcharging small businesses who have no leverage, and by jacking up rates. Insurance executives don't do this because they're bad people; they do it because it's profitable.

HANNITY: What'd you think?

FRANK LUNTZ (GOP pollster): I think that he's trying to demonize a segment of American society, and through the work that I've done, he may be successful, Sean. Because the American people don't think too highly of insurance companies or the people who run it.

Obama didn't say insurance execs are “bad people” -- he said the opposite

Obama said insurance executives treat customers badly not “because they're bad people” but because “it's profitable.” From Obama's September 9 speech before a joint session of Congress (prepared remarks):

So let me set the record straight here. My guiding principle is, and always has been, that consumers do better when there is choice and competition. That's how the market works. Unfortunately, in 34 states, 75 percent of the insurance market is controlled by five or fewer companies. In Alabama, almost 90 percent is controlled by just one company. And without competition, the price of insurance goes up and quality goes down. And it makes it easier for insurance companies to treat their customers badly -- by cherry-picking the healthiest individuals and trying to drop the sickest, by overcharging small businesses who have no leverage, and by jacking up rates.

Insurance executives don't do this because they're bad people; they do it because it's profitable. As one former insurance executive testified before Congress, insurance companies are not only encouraged to find reasons to drop the seriously ill, they are rewarded for it. All of this is in service of meeting what this former executive called “Wall Street's relentless profit expectations.”

Now, I have no interest in putting insurance companies out of business. They provide a legitimate service, and employ a lot of our friends and neighbors. I just want to hold them accountable. The insurance reforms that I've already mentioned would do just that. But an additional step we can take to keep insurance companies honest is by making a not-for-profit public option available in the insurance exchange. Let me be clear. It would only be an option for those who don't have insurance. No one would be forced to choose it, and it would not impact those of you who already have insurance. In fact, based on Congressional Budget Office estimates, we believe that less than 5 percent of Americans would sign up.