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Top Insurance Lobbyist Suggests Industry Does Not Support Complete Repeal Of Health Reform

By Igor Volsky  

"Top Insurance Lobbyist Suggests Industry Does Not Support Complete Repeal Of Health Reform"

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AHIP President and CEO Karen Ignagni appeared on Fox Business on Wednesday to lay out the insurance industry’s opposition to the Affordable Care Act. Ignagni wouldn’t say if insurers support repealing the law outright, but highlighted several provisions that she claims would increase costs for small businesses and individuals. She maintained that the law needs to be fixed:

IGNAGNI: I think the most important thing, Neil, is that what is being telegraphed all over the country is that people are worried about costs. [...] Small businesses in 2014 are going to face an unprecedented sales tax on their health insurance premiums….. Right now, going, starting January 1, there are new regulations going into effect that cap administrative costs. It’s going to be happening overnight, a shock to the system. And it is going to lead to a number of disruptions all over the country. [...]

CAVUTO: So you think that’s more likely if Republicans grab power or what?

IGNAGNI: I think that the American people are telegraphing to both sides of the aisle that this is a priority for them. They’re worried about costs. They should be worried about costs. We need to get on with that job of addressing that.

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Ignagni’s efforts to demur are telling. Even though the health insurance industry is in the process of massively shifting its campaign donations to Republicans and independent groups dedicated to defunding or repealing the law, I’ve suspected that insurers are more interested in favorable regulations that don’t cut into industry profits than outright repeal. Ignagni’s appearance only confirms this hypothesis.

While she may genuinely have some concerns about the penalties associated with the free rider provision that goes into effect in 2014 (employers with more than 50 workers wouldn’t be required to provide health insurance, but they would face fines if their work force received a government subsidy to buy health insurance), she’s probably more worried that if employers respond to the penalties by dropping coverage (and moving their workers into the exchanges), they’ll abandon their existing insurance products.

Other companies and plans operating inside the exchanges will pick up that business, but they will probably have to operate under better regulated market conditions. And, since companies would have to compete for business in the exchange (which in some states may include a public option) those products could bring in smaller profits. Ignagni is determined to shield the companies she represents form this kind of erosion and she’s happy to inflame concerns about rising health care costs to do so.

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