The lobbying expenses of the top 13 health insurers and their industry association, America's Health Insurance Plans (AHIP), spent nearly $8.2 million in the third quarter of 2009 to influence Congress on upcoming health care legislation, according to analysis released today by the nonpartisan campaign finance watchdog Public Campaign Action Fund (PCAF). The total marks an 11 percent increase over the pace of their spending in the first half of the year.
According to PCAF analysis, which was based on figures compiled by the Center for Responsive Politics, these top insurers and AHIP have spent $22,957,382 to lobby Congress and the Administration from January through September. AHIP, the insurers' trade association, has spent more than $6 million this year. The analysis reviewed data for the top insurance companies as identified by Fortune magazine's rankings.
Corporation/Association
Lobbying
Lobbying
Total
Q1-Q2 2009
3Q 2009
Aetna Inc
$1,441, 639
$580,743
$2,022,382
AHIP
$3,900,000
$2,410,000
$6,310,000
Amerigroup Corp
$215,000
$160,000
$385,000
Centene Corp
$230,000
$130,000
$260,000
Cigna Corp
$720,000
$260,000
$980,000
Coventry Health Care
$300,000
$150,000
$450,000
Health Net Inc
$680,000
$330,000
$1,010,000
Healthspring
$90,000
$60,000
$150,000
Humana Inc
$950,000
$900,000
$1,850,000
Molina Healthcare
$270,000
$140,000
$410,000
UnitedHealth Group
$2,500,000
$1,010,000
$3,510,000
Universal American Financial
$865,000
$895,000
$1,760,000
WellCare Group
$200,000
$70,000
$270,000
Wellpoint
$2,420,000
$1,080,000
$3,500,000
Total
,$14,781,639
$8,175,743
22,957,382
"These insurance industries have invested heavily in expensive lobbyists and campaign contributions to make sure their needs are met while the rest of us are stuck with a broken health care system and little way to have our voices heard in Washington," said Donnelly. "It's time to sever the ties between special interest money and our elected officials. It's time to pass the Fair Elections Now Act."
A top lobbyist for the major private insurance industry trade group, America's Health Insurance Plans (AHIP), urged Congressional Republicans to not even consider helping Democrats pass health care reform lest they aid an 'enemy who is down.'
Steve Champlin, a lobbyist for the Duberstein Group who represents AHIP, declared that the road to a bipartisan health care reform bill was, essentially, dead. And he urged GOP members to keep it that way.
"There is absolutely no interest, no reason Republicans should ever vote for this thing. They have gone from a party that got killed 11 months ago to a party that is rising today. And they are rising up on the turmoil of health care," said Champlin. "So when they vote for a health care reform bill, whatever it is, they are giving comfort to the enemy who is down."
AHIP - the insurance industry, has funded a new study attacking the Senate Finance Committee health reform bill, claiming it will hike family premiums.
The White House to then issued new talking points attacking the study as a “self serving” effort to defend its “profits."
While the study seems to help reform foes, it actually makes a good case for Single-Payer or a Medicare like Public Option and should make it easier for Dems to cast opposition to reform as orchestrated by the insurance companies.
Ezra Klein shreds the report on the facts, as does Jonathan Cohn who got MIT economist Jonathan Gruber to review AHIP's PriceWaterhouseCoopers report and says that the AHIP Claim on Benefits Tax is "Implausible".
The health insurance industry has been working until recently to help draft legislation, while publicly endorsing President Barack Obama's goal of affordable coverage for all Americans. The alliance has grown strained as legislation advances toward votes in Congress.
Late Sunday, the industry trade group America's Health Insurance Plans sent its member companies a new accounting firm study that projects the legislation would add $1,700 a year to the cost of family coverage in 2013, when most of the major provisions in the bill would be in effect.
I think they make an excellent case for Single-Payer... Medicare For All:
Study: Premium increase
Premiums for a single person would go up by $600 more than would be the case without the legislation, the PricewaterhouseCoopers analysis concluded in the study commissioned by the insurance group.
"Several major provisions in the current legislative proposal will cause health care costs to increase far faster and higher than they would under the current system," Karen Ignagni, the top industry lobbyist in Washington, wrote in a memo to insurance company CEOs.
The study projected that in 2019, family premiums could be $4,000 higher and individual premiums could be $1,500 higher.
But the PricewaterhouseCoopers analysis attempted to get at a different issue — costs for privately insured individuals.
It concluded that a combination of factors in the bill — and decisions by lawmakers as they amended it — would raise costs.
The chief reason, said the report, is a decision by lawmakers to weaken proposed penalties for failing to get health insurance. The bill would require insurers to take all applicants, doing away with denials for pre-existing health problems. In return, all Americans would be required to carry coverage, either through an employer or a government program, or by buying it themselves.
Other factors leading to higher costs include a new tax on high-cost health insurance plans, cuts in Medicare payments to hospitals and doctors, and a series of new taxes on insurers and other health care industries, the report said.
While I do believe the Insurance Industry through AHIP is being disingenuous with this report, it does still demonstrate how current plans under review are far more complicated and expensive than they need to be. We have a historic opportunity for members of Congress to go on the record in support of single-payer legislation and we should push for those votes. A significant of YES votes helps establish a benchmark so with healthcare reform returns for debate again - as it will given the plans offered - we won't have single payer taken off the table before then negotiations begin.
Note that the text in the above forms will need a bit of revising - which you are free to do and should do. I would also urge you to ask them to request that the Congressional Budget Office score HR-676. Let Congress and the public see where the real efficiencies are.
Determined to get as many people as possible covered, lawmakers first proposed fines of as much as $3,800 per family for health insurance scofflaws. But they have been steadily scaling back the penalties, with the Senate Finance Committee last week dropping them to $1,500 maximum per family in their version of a health care bill. The committee also phased the penalties in over five years with no fines at all in the first year and eliminated all criminal and most civil punishments for failure to pay.
The industry -- counting on millions of more Americans buying insurance -- says the penalties are now so weak they practically beg to be ignored. The result, the companies warn, is that people would wait until they get sick to buy coverage. That would raise premiums for everyone else, since Congress' health care overhaul would also require insurers to take all applicants.
Read more at: http://www.huffingtonpost.com/2009/10/05/health-insurance-companie_n_310591.html
U.S. health insurers whine about being "gagged" after being told not to violate marketing rules or improperly use protected Medicare mailing lists.
The Centers for Medicare & Medicaid Services (CMS), which oversees the Medicare program for the elderly and disabled as well as privately run Medicare alternatives, said on Monday it was investigating a letter Humana Inc (HUM.N) sent enrollees about efforts to overhaul the nation's healthcare system.
Humana's letter, sent in an envelope citing important plan information, told customers the Democrats' bills could hurt "millions of seniors and disabled individuals who could lose many of the important benefits and services that make Medicare Advantage health plans so valuable," according to CMS.
The agency also warned other insurers against sending potentially misleading health reform mailings to customers.
Earlier this week, the Wall Street Journal reported that AHIP — the multimillion dollar lobbying juggernaut for the health insurance industry — has mobilized 50,000 employees to lobby Congress to defeat the public option. ThinkProgress has learned that AHIP’s grassroots lobbying is being managed by the corporate consulting firm Democracy Data & Communications. DDC has made a name for itself as one of the most effective stealth lobbying firms. Earlier this summer, DDC was caught by reporters using a front group called “Citizens for a Safe Alexandria” to attack the Obama administration for seeking to prosecute Guantanamo Bay prisoners in Alexandria, VA.
According to the server-information hub Domaintools.com, the AHIP grassroots outreach website AHIPAdvocacy.org is hosted on a server owned by DDC. Though DDC conceals the hosting of its other websites using a service called DomainsByProxy, ThinkProgress has obtained a list of the domains hosted on DDC servers. A review of this data shows that DDC maintains the grassroots outreach websites for large health insurance companies, but also for big tobacco and Koch Industries:
– phillipmorrisusaactioncenter.org (Altria)
– tobaccoissues.com (Altria)
– kochpac.com (Koch Industries)
– aetnavotes.com (Aetna)
– healthactionnetwork.org (WellPoint)
– humanapartners.com (Humana)
– ahipadvocacy.org (AHIP)
DDC is a firm that promises “high impact” outreach programs to not only influence the grassroots, but “change attitudes for the long term.”
As the Washington Post explains, DDC pays over 500 contract workers to “spend much of their day telephoning people around the country and asking them to sign letters to Congress that press for legislation.” The firm helped orchestrate “grassroots” support for President Bush’s push to privatize Social Security, and helped manage online efforts for the right-wing attack group Freedom’s Watch. DDC is headed by B.R. McConnon, a former associate of Jack Abramoff’s lobbying partners, and a former employee of the Koch-funded astroturf organization known as Citizens for a Sound Economy.
Citizens for a Sound Economy — which has also received funds from private health insurers in the past and played a critical astroturf role in killing reform under Clinton — eventually split, with one wing forming Americans for Prosperity in 2003, and another forming FreedomWorks in 2004. Both organizations, which are still funded by the Koch Industries empire, were instrumental in organizing the anti-Obama tea party protests, and have been spreadingmisinformation and anger at the current health reform effort. Americans for Prosperity’s anti-health reform front group, Patients United, has hosted speakers comparing the House health reform bill to the Holocaust.
Curiously, DDC servers also host anti-health reform letters from the Chamber of Commerce and Rep. Charles Boustany (R-LA), as well as continual news updates about the reform debate. All three documents are under a subsection titled WellPoint.
Given the stealthy nature of astroturf lobbying firms, it is difficult to discern the extent to which DDC is managing AHIP’s efforts. UnitedHealth, another large insurer, was caught recently using a call center to direct people to a radical tea party anti-health reform protest outside of the offices of Rep. Zach Space (D-OH).
Already, the health insurance industry has flexed its muscle to water down reform. After spending millions on lobbying, advertising, and direct contributions to lawmakers, the Senate Finance Committee made a major concession allowing insurers to reimburse only 65% of medical bills (down from the 76% proposed requirement). And indeed, although AHIP has made grandiose promises of self regulation, many insurers have recently broke promises made by AHIP President Karen Ignagni. On June 16, despite Ignagni’s pledges of commitment, insurance executives from UnitedHealth Group, Assurant, and WellPoint specifically refused to “commit” to ending the controversial practice of rescinding coverage after an applicant files a medical claim.
With DDC’s stealth lobbying assistance, AHIP may well kill the public option too.
A spokesman for America's Health Insurance Plans, the industry's trade group, admitted in an article published Monday that as many as 50,000 industry employees are involved in an effort to fight back against aggressive healthcare reform.
The admission, published in the last sentence of a Wall Street Journal article, highlights the stakes of potential healthcare reform for the private health insurance industry. Insurers and investors alike are terrified at the prospect of a so-called “public option,” which would create a government-run health insurance program to compete with private insurers. Because the government plan wouldn't have to earn a profit, the plan would be able to undercut the premiums of private firms, pressuring profit margins.
The industry that helped scuttle health reform 15 years ago with its "Harry and Louise" ads is back, voicing support for a central element of the Obama administration's plans: making sure everyone is covered.
That does not mean the industry is backing the administration. Indeed, the leader of the insurance lobby has sent lawmakers a message: Be careful what you change, because "77 percent of Americans are satisfied with their existing health insurance coverage."
Karen Ignagni, president of America's Health Insurance Plans (AHIP), invoked the statistic to argue against the creation of a government-run insurance option. But the polls are not that simple, and her assertion reveals how the industry's effort to defend its turf has led it to cherry-pick the facts.
The poll Ignagni was citing actually undercuts her position: By 72 to 20 percent, Americans favor the creation of a public plan, the June survey by the New York Times and CBS News found. People also said that they thought government would do a better job than private insurers of holding down health-care costs and providing coverage.
In addition, data from a Kaiser Family Foundation poll last year, compiled at the request of The Washington Post, suggest that the people who like their health plans the most are the people who use them the least.
Those who described their health as "excellent" -- people who presumably had relatively little experience pursuing medical care or submitting claims -- were almost twice as likely as those in good, fair or poor health to rate their private health insurance as excellent.
The level of satisfaction expressed with private insurance was essentially the same as that with Medicare, the government program for the elderly and disabled.
The industry's stance against a public health plan revives shades of 1994, when it was instrumental in blocking President Bill Clinton's health-care proposals.
"A government-run plan would turn back the clock on efforts to improve the quality and safety of patient care," AHIP has argued. Such a plan "will ultimately limit choices and access," the big insurer WellPoint contends.
But systemic problems have persisted for 15 years, and it is not clear how much private insurers have done, or can do, to solve them.
"Insurers promise choice, they promise innovation, they promise a lot of things, but I think they've delivered very little," said Alan Sager, professor of health policy and management at Boston University. "I think net they give us very bad value for the 10 to 20 percent share of the health dollar they skim off the top."
Instead of choice, they offer "the illusion of choice," he said.
Health-care costs have continued to rise faster than personal incomes and economic growth. Even the industry agrees that much of the spending is wasted, exposing patients to unnecessary risk.
Insurers argue that a government plan could dominate the market, reducing consumers' options. But in the private market, options are limited by employers who restrict employees' choice of insurers and by insurers who restrict their choice of doctors.
Cigna, one of the nation's largest insurers, took away its own employees' alternatives in 2006 and left them with only high-deductible coverage.
"There were a lot of unhappy people," said Wendell Potter, who until last year was Cigna's head of corporate communications. For many people enrolled in such plans, "the deductibles are so high that they forgo care," he said.
Long a defender of the industry, Potter has become an outspoken critic of what he calls its "duplicitous" public relations and lobbying campaigns.
Few people have a better vantage point on the industry's efforts to improve quality and efficiency than Joseph P. Newhouse, professor of health policy and management at Harvard University, editor of the Journal of Health Economics and member of the board of insurance giant Aetna. Asked what results the industry's innovations have yielded, Newhouse said: "It's just very difficult to give much of an evidence-based answer to those questions . . . in either direction."
With respect to the disease-management programs the industry touts -- efforts to make sure people with chronic illnesses get the care they need -- "by and large, the literature suggests it works in some cases, but those cases are fairly limited," he said.
AHIP has produced a stack of glossy reports describing health insurers' efforts to improve care. In recent testimony, Ignagni said private health plans serving the elderly have been highly successful in reducing hospital admissions and readmissions for patients with diabetes and heart disease.
Yet one of the AHIP reports says that in an Aetna Pathways to Excellence hospital incentive program, "readmission rates did not improve significantly."
Opponents of a public option argue that it could put government bureaucrats between patients and doctors. Today, for people with commercial or employer-sponsored coverage, care is overseen by private bureaucracies. Where government bureaucracies answer to the body politic, the corporate versions answer to Wall Street.
The issue of whether a public plan would be more successful at bringing costs under control is harder to evaluate. As a prototype for government-run health care, Medicare has failed to control costs and makes little effort to restrict care.
Economists generally agree that if costs are to be brought under control, someone must say no to care that doctors propose and patients demand. So far, that role has fallen primarily to insurers.
"Private insurers have effectively engaged in rationing, so they're doing the dirty work for everybody else," said Jeff D. Emerson, a former health plan chief executive. "It's a thankless job . . . but somebody has to do it or health care will be even more expensive than it is now."
Private insurers might be better situated than the government to do the unpopular work of saying no, said Paul B. Ginsburg, president of the Center for Studying Health System Change, because they are less susceptible to political pressure.
"Health insurers would be willing to end the practice of charging women higher premiums than men for individual insurance policies if the government agrees not to establish a public insurance plan, America's Health Insurance Plans President Karen Ignagni said Tuesday, the New York Times reports (Pear, New York Times, 5/6). Ignagni made the proposal at a Senate Finance Committee hearing that focused on ways to cover uninsured U.S. residents as part of a comprehensive overhaul of the nation's health care system. President Obama and congressional Democrats support the creation of a government-run insurance program that would compete with private insurance plans."
As the country contemplates a major reform and restructuring of the way we run our national health care system (if it can even be called that), it needs to be pointed out that the mammoth health insurance industry is nothing but a parasite on that system.
Health insurance companies add zero value to the delivery of health care. Indeed, they are a significant cost factor that sucks up, according to some estimates such as one by the organization Physicians for a National Health Program, as much as 31 percent of every dollar spent on medical services (a percentage that has been rising steadily year after year).
Insurance companies are damaging in more ways than simply cost, though.
They also actively interfere in the delivery of quality medical care, as anyone who has had to battle with some "nurse" on the phone at an insurance company to get required pre-authorization for needed procedure can attest. Just recently, the editor of a local weekly alternative paper in Philadelphia, Brian Hinkey, the victim of a near fatal hit-and-run accident last year who spent several days in a coma, and has been working hard to regain the use of all his limbs and faculties, reported in an opinion piece in the Philadelphia Inquirer on how his insurer after a few successful weeks of in-hospital rehab, denied him coverage for six critical weeks for out-patient rehab services, though every specialist on head injuries knows that early, consistent therapy is crucial to recovery of lost brain function.
This kind of human abuse is standard operating procedure for companies whose bottom lines are fattened the more services they can deny to insured clients. My own father, once doomed by a metastasized cancer following prostate surgery, was saved by a procedure offered by a physician in Atlanta that his Blue Cross plan in Connecticut refused to pay for. He had to finance the expensive treatment himself.
Now these medical system parasites are suddenly running scared, because it is clear that if everyone in America is to be guaranteed health insurance coverage--a promised goal of the new administration of President Barack Obama, and, according to polls, the desire of a large majority of the American people--they are going to stand exposed as a costly impediment to achieving that goal.
Insurance companies have managed to stay profitable and at least somewhat affordable to the private employers and workers who, together, have to pay for them, by denying care not just to policy holders, who are denied certain tests and treatments but especially to those who have known ailments, who are simply denied coverage altogether.
For decades, people with "pre-existing conditions" have been either barred from coverage, or have had to sign waivers that excluded them from getting coverage for treatment of those pre-existing conditions. In the worst case, which is all too common, people have ended up dying because they couldn't get treatment for common and easily treated ailments like high blood pressure or diabetes.
Now we hear that two big insurance trade groups, the Blue Cross and Blue Shield Association and America's Health Insurance Plans, have offered to "phase out the practice of varying premiums based on health status in the individual market" in the event that all Americans are required to obtain health insurance.
Well sure they're doing that. If they didn't, the government would force them to! The insurance industry, in saying that it would not price sick people out of coverage in a nationally-mandated health insurance scheme, is merely recognizing the political firestorm that would arise if it were not to do that, and were to force the sick and inform onto some government insurance plan, subsidized by taxpayers, while they just cherry-picked the healthy population, as they've been doing now for decades.
The whole point is that if everyone is included in the insurance pool, instead of only the healthy population, then the overall cost of being chronically or critically ill to the individual is spread over the whole of society. Premiums get adjusted accordingly.
Medicare is the model. Here we already have a government plan that covers every single elderly and disabled person.
If we were to simply extend Medicare to cover everyone in America, we would essentially have the Canadian model of health care (which, it should be pointed out, costs half what we pay in America for health care when private insurance and government programs are added together). As with current Medicare, the government would pay for treatment, with private doctors and hospitals providing the care, and with the government negotiating the permissible charges. That, in a nutshell, is what "single-payer" means--the government is the single payer for all health care. It doesn't mean, as the right-wing critics claim in their scaremongering propaganda, that people would be forced to use certain doctors and certain hospitals. Far from it. That's what private HMOs do.
Medicare is efficient (only 3.6% of Medicare's budget goes to administrative costs, compared to 31% for health care delivered through private insurance plans), its clients like it, and doctors and hospitals accept it.
We should not be tricked by this seeming sudden appearance of decency on the part of these corporate parasites. There is simply no valid reason for preserving the private insurance industry's role in any health care reform plan that is aimed at giving everyone access to health care in America. The Obama administration needs to jettison its "free market" fetish when it comes to health care. The financing of health care for all Americans can all be handled much better by the government. Medicare has proven this. Other countries--Britain, Australia, France, Canada, Taiwan and most other modern nations have proven this.
Leave the insurance industry to handle our car insurance and our life insurance. It has no more place in the delivery of health care than do tapeworms in the digestive process of our bowels.
Congressman Eric Massa (D-N.Y.) led a protest Monday outside the Ritz-Carlton hotel in Washington, site of the 2009 national conference of America's Health Insurance Plans (AHIP), a trade group for the health insurance industry.
DC often feels left out of politics. We don't have a vote in Congress, and so we can't give our Congressional delegation a call when we want reform.
But today, DC got to make its voice heard.
As noted earlier, America's Health Insurance Plans (AHIP) is having a conference on "health care reform" at the Ritz in DC today and tomorrow. This is a continuation o their sham listening tour, which Health Care for America Now has been calling out around the country for months. It's all part of their blurring strategy to try and convince the country they are for real health care reform this time around, even though the public health insurance option, the heart of President Obama's health care plan, is a dealbreaker for them.
Today, people in DC stood up to them. Video after the jump...Health Care for America Now, and the partners we worked with on this rally such as the National Nurses Organizing Committee, the California Nurses Association, the American Medical Student Association, DC for Obama, DC Fights Back, The Vineeta Foundation, MoveOn.org, the Campaign for America's Future, and the Leadership Conference for Guaranteed Health Care, aren't standing for it. The insurance industry has already come out against a key piece of President Obama's health care reform. They clearly aren't helping come up with a solution - they are the enemies of reform.
So, in DC today, these groups got together to deliver an award to Karen Igagni, CEO of AHIP.
As could be expected, she didn't want to come out, face the crowd, and get her well-deserved certificate. But a couple hundred people had a good time pointing out the insurance industry will always put profits before people.
Here's some quick video of the event:
The biggest highlight was the presence of Congressman Eric Massa's (D-NY). It's heartening that Members of Congress are willing to join a rally to send the message that we can't trust the health insurance industry with health care reform. And apparently we made so much of a splash, that Ignagni and her henchmen had to respond to our concerns during their press conference later that morning:
The protest ended when the group tried to enter the Ritz to deliver an oversized award certificate to KarOuren Ignagni, AHIP's president and CEO. The "Best Protector of Profits at the Expense of Our Health" award didn't make it past security guards or a strategically-parked car near the entrance.
"I believe in First Amendment rights," Ignagni said when asked about the protest during a subsequent press conference. "We're motivated by going through a process of taking issues off the table that are troubling the American people."
We're not giving up. We know the health insurance industry will be the main enemies of health care reform. As President Obama said, the status quo is off the table. It's time to fundamentally reform our system, and that means putting people over insurance industry profits.
This award will follow AHIP and Karen Ignagni around the country until she agrees to accept it and own up to her role in protecting profits even if it costs lives.
We'll see you next time, Karen! We're looking forward to it!
