‘Diverse Opposition?’ California Health Insurers Spread Cash To Groups Opposing Rate Regulation Bill

CAHP, the lobbying federation for California health insurance companies

The San Francisco Chronicle is reporting that Kaiser Permanente plans to raise rates by more than 10 percent for about 300,000 Californians enrolled in policies offered through small businesses. Kaiser Permanente, which operates as a quasi-nonprofit, has reported record profits of $921 million in the first quarter of 2011 alone. The company reportedly has healthy reserves, and has filed disclosures noting that it has rewarded top executives with million-dollar bonuses in recent years.

While public outcry temporarily stalled California insurers from forcing through egregious rate hikes last year, pending legislation may provide a better path. This week, the California state Senate is expected to vote on AB 52, legislation sponsored by Assemblyman Mike Feuer’s (D-Los Angeles) to allow regulators to review proposed rate hikes by health insurance companies. However, California health insurance companies are fighting back with an onslaught of lobbying.

Like the national legislative battle over President Obama’s health reforms, insurance companies in California are attempting to undermine AB 52 by showcasing widespread opposition to the bill. The California Association of Health Plans — the trade association representing major insurers in the state like Kaiser Health Plans, Anthem Blue Cross (WellPoint), Aetna, UnitedHealth, HealthNet, and Cigna — is leading the charge, firing off press release after press release noting the “diverse group” of California organizations against the rate review bill. However, a closer look at the groups the insurers are touting reveals multiple financial ties to insurers opposed to AB 52:

— The California Chamber of Commerce has announced that AB 52 is on the top of its list of “Job Killers,” meaning they will make killing the legislation a top priority. The Chamber purports to represent all businesses in the state, but its board membership reveals mostly multinational corporations. Health insurers have a seat at the table. California Chamber board members include Greg Adams, a top Kaiser Health Plans official, David Anderson, CEO of UnitedHealthcare of Southern California, and Pam Kehaly, President of Anthem Blue Cross of California. Diamond membership to Chamber requires annual dues of at least $100,000, suggesting that top insurers have funneled hundreds of thousands of their customers’ premium money to a right-wing lobbying group, rather than spending it on actual medical services. Although the Chamber has not registered with the Secretary of State for grassroots lobbying, the Chamber’s e-lobbying platform is calling for members to contact legislators to oppose the bill.

— The Pacific Research Institute (PRI), a conservative think tank based in San Francisco and Sacramento, has attacked the legislation. PRI fellow John Graham has claimed there is “little or no evidence” rate review provides relief to consumers. In fact, numerous studies, like this one from Families USA, have found broad benefits to consumers through rate reviews instituted in other states. Perhaps PRI’s opposition is partially rooted in the fact that Michael Carpenter, a top lobbyist for Kaiser Health Plans, is a former board member of the group who has been featured at PRI events.

— A number of the other local chambers of commerce touted as opponents of AB 52 are funded by health insurance companies. For example, the Los Angeles Area Chamber of Commerce receives annual donations of at least $50,000 from Kaiser Health Plans.

— The Civil Justice Association is paraded around as an opponent of the AB 52. Health insurers like Kaiser Health Plans and Anthem Blue Cross are among the dues-paying board members.

ThinkProgress has learned that the lobbying firm Fiona Hutton and Associates has been charged with helping to recruit and push these insurer allies.

Earlier this month, Los Angeles Times columnist Mike Hiltzik absolutely eviscerated the policy arguments insurers have advanced to discredit AB 52. But policy arguments are only part of the equation when it comes to legislative debates. According to disclosures filed with the state, health insurers like UnitedHealth, Cigna, and Anthem are hiring top Sacramento lobbyists and pouring more than $1 million dollars into lobbying. As the Courage Campaign highlighted in a recent letter, despite its registration as a nonprofit, Kaiser is spending vast amounts of money on direct lobbying as if they were a normal for-profit insurer. Sadly, the searchable donations reveal only part of the picture. Health insurers have not only purchased lobbyists with their customers’ premium money, they have purchased friends to build their anti-AB 51 “coalition.”