AHIP Insists It's Still a Friend of Health Reform. Really!

by Suzy Khimm | October 22, 2009

Speaking beneath the twinkling crystal chandeliers of the Capitol Hilton ballroom this morning, America’s Health Insurance Plans (AHIP) president Karen Ignagni declared that the insurance industry is still on board with the Democratic health care reform effort, pushing back against the presumption that the two sides have declared war. “Our community was one of the first to position ourselves very actively to a massive overhaul of the insurance market,” Ignagni told the audience members, who were attending the organization’s conference on state insurance issues. She added that AHIP is still pushing for “a massive restructuring of how markets work and a massive change in the way the administrative process works” within insurance companies.  

Altogether, Ignagni was trying to present the insurance industry as one of the major visionaries behind health care reform--not one of its obstructionists. This runs counter to the message that’s only growing louder from the Democratic leadership in Congress--not to mention the activist left, who organized a mass demonstration directly outside the AHIP conference this afternoon (more on this shortly). Throughout her speech, she kept reiterating that AHIP has “very specific proposals” that would bend the cost-curve by 1.5 percent. She even concluded with an Obama-like rallying cry to encourage the state-based insurance executives and officials in attendance to support the process: “Yes, we can achieve reform, yes, we can make it work, and yes, we can contribute to that effort!”  

At the same time, Ignagni continued to defend the questionable findings of the PriceWaterhouse Cooper study that claimed the reform bill would raise costs. She faulted the “eleventh-hour change in Senate Finance Committee to gut the mandate” for prompting AHIP to push back against the legislation. She also cited the taxes in the bill as contributing to the rising cost of premiums, then added that, “unless members of Congress … step up and confront the challenge of cost-containment, they will invariably be forced into taxes that will increase the cost of coverage.” Taken together, her comments suggested a vicious cycle of taxation: Higher taxes would mean higher premiums, which, in turn, would prompt the government to resort to more taxes to pay for it all, raising costs even further. Of course, most experts think the tax will actually *reduce* health care spending.)

Ignagni’s sunny, pro-reform comments also stood in sharp contrast to those of her colleague, Scott Styles, AHIP’s senior vice president for federal legislative affairs, who spoke shortly before Ignagni. Styles singled out the Democratic-led effort to strip the insurance industry’s anti-trust exemption as “one more issue to bash the industry.” He claimed, for instance, that Chuck Schumer and Harry Reid’s “hastily arranged press conference” on the issue yesterday was simply executed “to distract attention from … this bad vote on the physician fix”-- referencing the Senate’s decision to vote down the Medicare payment freeze for doctors.  

But both AHIP officials denied that they had waged war against the reform process, despite the recent adversarial turn of the debate. Styles, for one, said the group is continuing to “float policy solutions” and work with moderate Democrats to press ahead with reform. However, he added that “there’s a long ways to go” and that the industry is waiting until the merged Senate bill comes out before deciding how to position itself in the next stretch of the process. “That will be the next product we expect.” At that point, if the Democratic bill doesn’t meet AHIP’s expectations, and if congressional leadership escalates its attacks on the industry, it's easy to imagine that anything could happen.

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