The Insurers’ Real Agenda for Change
The media had lots of health care news to obsess about last week. A federal judge ruled the health care reform law unconstitutional, and Senate Republicans tried in vain to repeal the law. But most of the press paid virtually no attention to a potentially much more important development - a multi-pronged effort by five major insurers to strip from the law key regulations and consumer protections that aren't to their liking.
The insurers do not want the bill repealed or declared unconstitutional. Congress gave them exactly what they wanted by including in the legislation a requirement that all Americans not eligible for Medicare or Medicaid buy coverage from a private insurance company. That provision alone will result in hundreds of billions of dollars in revenue and profits the insurers otherwise would never see.
Officially, the insurers are maintaining neutrality on the court challenges to the law and the repeal efforts. They understand that Republican attorneys general who filed the lawsuits and the Congressional Republicans who voted to repeal the law - most of whom received campaign contributions from the insurers' political action committees - must go through the motions to satisfy "the base."
The court challenges and repeal efforts are, in reality, a useful smokescreen for the big insurers, whose real agenda is to gut the law while preserving the mandate. Expect a big lobbying and PR campaign - financed by our insurance premiums - to persuade us that the new regulations and consumer protections will make those premiums skyrocket.
The story much of the press missed was the revelation that the CEOs and lobbyists for the five biggest for-profits - UnitedHealth, WellPoint, Aetna, CIGNA and Humana - have been meeting frequently to plot their attack on the law.
Bloomberg's Drew Armstrong reported that three committees formed by the group have been meeting almost weekly. While Armstrong didn't indicate what those committees are doing, I can speculate from previous experience as an insurance company executive that the committees are developing strategies in these areas: lobbying, strategic communications the formation of alliances with other political and business groups and the creation of fake grassroots, or "Astroturf" organizations.
Bloomberg and The National Journal also reported that the for-profits have solicited proposals from three big PR firms that have done extensive work for the industry: APCO WorldWide, Weber Shandwick and Public Strategies. It sounds familiar. While I was serving as head of corporation communications at CIGNA, I hired APCO and Weber Shandwick to help direct similar efforts and to enhance CIGNA's reputation.
The for-profits reportedly formed the new coalition - as yet unnamed - because they were upset that America's Health Insurance Plans (AHIP), their umbrella trade association, had been unsuccessful in keeping the new regulations and consumer protections out of the law in the first place.
So they're going back to a familiar and successful playbook. Over the past two decades, the big insurers have formed such coalitions to defeat reform initiatives or to persuade the public and lawmakers to see things their way.
When the Clinton reform plan was being debated in 1993 and 1994, Aetna, CIGNA, Prudential and United formed the Alliance for Managed Care (AMC) to argue for a "market-based" solution - managed competition, as it came to be called - as an alternative to broader government involvement in health care. The AMC described itself as "a private-sector approach to health care system reform that uses the marketplace and the power of informed consumer choices to achieve better coverage, while improving quality and cutting costs."
The AMC later joined a broader coalition that included the U.S. Chamber of Commerce and the National Association of Manufacturers to defeat the Clinton plan.
A few years later, within weeks of being named as defendants in two massive class-action lawsuits, the for-profits formed a new group, America's Health Insurers (AHI), designed to redirect scrutiny away from them and toward the trial lawyers behind the suits. Attorney Richard "Dickie" Scruggs alone cost the companies billions of dollars in market capitalization when the Wall Street Journal reported on Sept. 31, 1999, that Scruggs was planning to file charges against the insurance firms. On that day, stock prices of Aetna and United alone had plunged nearly 20 percent by the time the closing bell rang at the New York Stock Exchange.
I was CIGNA's main representative to America's Health Insurers. My counterparts from other big insurers and I met secretly in hotel conference rooms in Washington and elsewhere with APCO to plan the PR strategy. The idea was to "reframe the debate" - shift attention away from the reasons the insurers were being sued - onerous policies and cheating doctors out of payments-and toward those trial lawyers who were getting filthy rich filing "frivolous" lawsuits. The lawyers - not the insurers - were the real villains. APCO reactivated the front group it had created for the tobacco industry-the Coalition Against Lawsuit Abuse-to generate letters-to-the editor and op-ed pieces in cities where the lawsuits had been filed - particularly Miami, where suits were eventually consolidated. The intent was to influence both the federal judges and potential jurors. (The suits were ultimately settled, with the defendants agreeing to change many of their practices and to pay the plaintiffs hundreds of millions of dollars.)
I was also CIGNA's representative to yet another organization - the Coalition for Affordable Quality Healthcare (CAQH) - that the big insurers created later. We mounted a huge PR and advertising campaign designed to restore Americans' faith in managed care, which had taken a beating in the press for such well-publicized practices as "drive-through mastectomies" and "drive-though deliveries." So this new grouping is just the latest variant on an oft-used tactic to influence public opinion and public policy. This time, however, the stakes are even higher, for both the insurers and for consumers. What don't the companies like? Well, for starters, the rules that now require insurance firms to devote at least 80 percent of what we pay in premiums for actual medical care.
But their sights are also on other provisions of the law that might impair profits. AHIP spokesman Robert Zirklebach provided a glimpse of what insurers really want when he told a reporter last week that industry lobbyists have embarked on a campaign to "educate" members of Congress about ‘flaws' in the law. For instance, the industry will be trying to persuade lawmakers that young people, many of whom are being charged too much already, will see their premiums go sky high. How do you fix that? The insurers, of course, have an answer: get rid of the requirement that insurers can only sell policies that meet minimum benefit requirements and jettison the prohibition against charging older Americans any more than three times as much as young people. They want to charge them five to ten times as much.
If the latest coalition of big for-profit insurance firms meets its objectives, many of us will eventually be convinced - through sophisticated, behind-the-scenes PR campaigns - that those protections are not in our best interests after all. If those campaigns help the big insurers eliminate such protections, that would be ideal for their bottom lines - but devastating for consumers.
Commentator Wendell Potter, a former insurance company executive, is the author of Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR is Killing Health Care and Deceiving Americans.