Distinguishing Between Good And Bad Health Insurance Lobbying

Center For Public Integrity is reporting that five of the nation’s largest health insurance companies are considering forming a nonprofit organization to better influence the implementation of health care reform and bolster the industry’s image. “The insurers’ goal will be to help elect members who can be allies in the all important regulatory writing process now underway to implement key parts of the health care legislation that was signed into law earlier this year“:

The two sources tell the Center for Public Integrity they expect millions of dollars will be pumped into issue advertising in a number of races where candidates sympathetic to health industry concerns have a shot at winning.

“The objective is to make the House more accommodating to concerns that have been raised,” says one industry source. “They’re looking at toss-up candidates,” adding that the companies want to “focus resources to influence campaigns.” [...]

The sources stress that insurers are particularly concerned at this stage about a provision in the new law that mandates they spend 80 cents of every premium dollar received on the welfare of patients. The high financial stakes mean insurers have been pushing hard with state regulators to allow for broader definitions of what constitutes patient welfare expenditures. This issue is “probably the most important one right now,” explains a source.

The campaign may be an alternative to the industry’s long-time lobbying group America’s Health Insurance Plans (AHIP), which has represented the industry throughout the health care reform debate. Industry sources are telling Politico’s Pulse that “they feel the group wasn’t strong enough during the reform battle and they’re not convinced it has the muscle to deliver during implementation.” “The insurance industry sources argue that the industry got little out of the year-long Hill battle: the individual mandate is relatively weak and the industry is still getting hammered by reform supporters.”

AHIP has already promised to work alongside federal and state regulators to implement the new reform law “effectively” and to the extent that the industry’s goals intersect with the objectives of reform, a partnership with insurers could lead to some real progress. The government can rely on the industry and its expertise to adapt the payment reform models in Medicare to the private sector, develop administrative simplifications, or encrouage Americans to enroll in insurance coverage. As Jon Kingsdale, former director of the Commonwealth Connector Authority, has pointed out, the implementation process would probably benefit from this kind of industry input.

But if insurers are only looking to inflate their medical loss ratios by reclassifying certain administrative services as “medical” or undermining the rate review processes, then they’re working against the public interest and it will be up to us to publicly involve ourselves in the implementation process and counter the industry offensive.