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Dems Play with Private Insurance Industry, Get Burnt
Et tu, Ron?
As President Obama read former Aetna CEO Ron Williams’ op-ed in The Wall Street Journal renouncing his support for a key provision of the health care reform law, he must have felt like Julius Caesar when Caesar realized, as he drew his last breath, that his close friend Brutus was in cahoots with his assassins.
Williams’ betrayal appeared in last Monday’s edition of the Journal under the headline, “Why I No Longer Support the Health Insurance Mandate.” The fact that it was published just days before the Supreme Court was expected to rule on the constitutionality of the mandate made it clear that Williams was not the trusted advisor the President thought he was, that, like Brutus, Williams had thrown his lot with those plotting against the commander-in-chief.
The reason why that opinion piece was such a knife in the back was because it was Ron Williams who possibly more than anyone else had persuaded the President to reconsider his campaign pledge to enact reform without making people buy coverage from a private insurer. Candidate Obama’s reform platform differed from those of Hillary Clinton’s and John Edwards’ in only one significant way: both Clinton and Edwards embraced the mandate, which Williams was championing, first behind the scenes and then publicly, on behalf of the insurance industry. Candidate Obama said he didn’t believe it was right for people to be forced to buy something they couldn’t afford.
Williams was the industry’s most visible CEO on Capitol Hill during the debate on reform. He testified at numerous congressional hearings about how essential it was to move the millions of uninsured Americans into private health insurance plans and how an individual mandate was necessary to make that happen. He also never missed an opportunity to trash the idea of a “public option” to compete with private insurance companies, which candidate Obama had said was essential “to keep private insurers honest.”
Capitol Hill was not the only place Williams was frequenting during the reform debate. In an August 2009 article in Forbes, Williams was quoted as saying that he already had met with the President six times. When I called the White House to confirm that, a top aide told me it was true Williams had been there many times, adding, “We’ve found him to be one of the more reasonable ones.” More reasonable, presumably, than many of the other lobbyists seeking to influence the President. So reasonable, in fact, that in March of last year Obama appointed Williams to the President’s Management Advisory Board.
I was still head of corporate communications and a member of the public policy team at Cigna when Williams began speaking out about the need for an individual mandate. Many in the industry, including my former CEO, Ed Hanway, were initially skeptical, so Williams set out to convince them he was right. He argued that if Democrats took control of both Congress and the White House, which was looking increasingly likely, they would set their sights on the insurance industry. They most certainly would attempt to ban many of the industry-wide practices that enabled insurers to be so profitable, such as refusing to sell coverage to people with preexisting conditions. If that were to happen, the best way to guarantee that insurers wouldn’t be saddled with just the sickest Americans would be to get the Democrats to agree to a requirement that everybody, including the youngest and healthiest among us, buy private coverage if they weren’t eligible for a public program like Medicare or Medicaid. The government would also have to agree to tax credits or subsidies to help low- and moderate income Americans pay their premiums.
Before long, the CEOs of the other big insurers were indeed on board. They came to realize that if Democrats would agree to an enforceable mandate and premium subsidies, their companies would be getting billions of dollars in new revenue every year — forever. AHIP as a group soon endorsed the mandate, and Williams, who articulated the rationale for it so persuasively, became the industry’s chief emissary to both Congress and the White House.
I’m sure the President was led to believe that industry leaders would do their best to get some of their Republican friends to support reform if he would agree to the mandate and drop the idea of a public option. No doubt the President was reminded that the mandate was, after all, a Republican idea, that, in fact, it had been the centerpiece of legislation introduced in both the House and Senate by Republicans as an alternative to Bill and Hillary Clinton’s reform bill back in the early 1990s.
Tapping Williams to be the industry’s front man paid off. Soon both the President and Democratic Congressional leaders were endorsing the mandate. And in a joint address to Congress in September 2009, Obama threw the public option under the bus, saying that although he still thought it was a good idea, it wasn’t essential. Williams, who retired from Aetna last year, had won on both counts.
The problem for the President, of course, was that industry executives could not deliver any Republican votes for reform — or decided not to try when they were realized that lawmakers were not going to impose significant penalties on people who thumbed their noses at the mandate. In addition, the GOP leadership had planned from the get-go to denounce any reform legislation the Democrats came up with as a “government takeover of health care.” Not only that, the President’s political foes decided to build their legal challenge to the law around the mandate, arguing that it represented an unprecedented overreach of the federal government and, consequently, was most certainly unconstitutional.
Williams’ op-ed would never have appeared in the Journal if industry leaders weren’t nervous about what the high court will do. Their worst fear is that the mandate will be struck down but the rest of the law will be allowed to go forward. Knowing they can’t rely on Obama and the Democrats to get rid of the new regulations and consumer protections under that scenario — they’ve tried without much success so far — they will need to help flip the White House and the Senate to Republican control to be certain the job gets done.
Williams’ real audience for that op-ed was Republicans lawmakers and kingmakers. It was a signal to the GOP that the industry’s brief and often rocky affair with Obama is over and done with, that they were just playing the Democrats all along.