Insurers Know Exactly What They Want

21 Oct

The enemy in health insurance reform is well understood to be the health insurance industry. America’s Health Insurance Plans (AHIP) is the public face of the health insurance industry in Washington. Ergo, AHIP is the enemy of health insurance reform. But what about those days long ago when the push to fix health care in this country was actually called health care reform? Did AHIP oppose it then? They should have, because substantively little has changed in the legislation being proposed in Congress. The shift from health care reform to health insurance reform, in other words, is one of semantics–of more accurately framing the debate to reflect what these reforms aim to do.

The reality is, however, that only after they came under direct fire did AHIP begin to become so outspoken against reform–or at least certain elements of it. As I’ve written previously, the counterstrike came when AHIP had PriceWaterhouseCoopers release a now notorious study report showing that health reform as currently proposed would raise the premiums of those who are currently insured. That created a huge backlash, and on Tuesday, AHIP President Karen Ignagni went on the defensive in the op-ed pages of the Washington Post to set the record straight. What she actually did, for those who read between the lines, is make it abundantly clear that AHIP wants health reform that works solely in their favor and wants to improve their public image–no organization enjoys being vilified.

Here’s how Ignagni sees it:

“Health plans continue to strongly support health reform….The shared promise of health-care reform is guaranteeing access to affordable coverage for those outside of the system while ensuring that those who have coverage can keep what they like. That promise can be kept only if Congress puts the nation on a path to universal coverage and confronts what lawmakers have thus far been unwilling to address: the need for tangible, effective steps to reduce the growth in health-care costs and make the system sustainable for generations to come. “

Yet she also (predictably) opposes the excise tax that Congress wants to levy on the most expensive health care plans (the so-called “Cadillac Plans.”):

“…the proposed new taxes on health plans, pharmaceutical manufacturers and medical-device makers will increase the cost of coverage….[M]ore costs [will be] shifted to individuals and employers who purchase private coverage….[and] in a few years, far more employees’ health plans would be subject to the new tax on comprehensive benefit packages than is currently projected, quickly turning the so-called Cadillac tax into a Chevrolet tax.”

Do you see it? AHIP certainly doesn’t want to be seen as opposing reform, because they know that that’s not a popular position to take given that they are the object of reform. This is the old “If you can’t beat them, join them” mentality. Besides, many aspects of reform (e.g., mandating everyone to have coverage) would benefit insurers greatly. But AHIP takes the familiar saying and inserts its own clause: “If you can’t beat them, appear to join them, but once you’re on their side work like hell to make them see things your way.” Thus, AHIP’s strangely paradoxical position that controlling health care costs should be priority number one, but that Congress should abandon one of the primary means of bringing costs down (i.e., the excise tax) because it is unfavorable to insurers. Make sense?

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Posted by on October 21, 2009 in Uncategorized


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