With the Supreme Court of the United States upholding the constitutionality of most of the Patient Protection and Affordable Care Act (PPACA), now is a good time to examine the tortured relationship between the health insurers and health care reform.
Key to such an understanding is realizing that the insurance industry often conducts a “deception-based PR strategy [with] two active fronts:” “a ‘charm offensive’ designed to create an image of the industry as an advocate of reform” and “a secret, fearmongering campaign using front groups and business and political allies as shills to disseminate misinformation and lies, with the sole intent of killing any reform that might hinder profits.” (http://www.amazon.com/Deadly-Spin-ebook/dp/B0049195R0/ref=sr_1_1?s=books&ie=UTF8&qid=1342447040&sr=1-1)
The two front PR strategy was certainly in full swing when one compares Karen Ignagni’s White House statement of support for the PPACA with America’s Health Insurance Plans (AHIP) secret funneling of money to the Chamber of Commerce’s efforts to derail health care reform.
Following the “charm offensive” playbook, Ignagni, the president of AHIP who makes $1.5 million in salary and bonuses as the industry’s chief lobbyist, spoke at President Obama’s health care summit on March 5, 2009:
“Thank you, Mr. President. Thank you for inviting us to participate in this forum. I think, on behalf of our entire membership, they would want to be able to say to you this afternoon and everyone here that we understand we have to earn a seat at this table. We’ve already offered a comprehensive series of proposals. We want to work with you. We want to work with the members of Congress on a bipartisan basis here. You have our commitment. We hear the American people about what’s not working. We’ve taken that seriously. You have our commitment to play, to contribute, and to help pass health care reform this year.”(http://www.amazon.com/Deadly-Spin-ebook/dp/B0049195R0/ref=sr_1_1?s=books&ie=UTF8&qid=1342447040&sr=1-1)
Ignagni did not speak about the second front, the fearmongering campaign in which AHIP would play a central role. Three years after the 2009 White House Summit, the National Journal revealed that AHIP sent the Chamber of Commerce a total of $102.4 million to be used in lobbying against the PPACA.
“The backchannel spending allowed insurers to publicly stake out a pro-reform position while privately funding the leading anti-reform lobbying group in Washington. The chamber spent tens of millions of dollars bankrolling efforts to kill health care reform.” (http://influencealley.nationaljournal.com/2012/06/exclusive-ahip-gave-more-than.php/)
While the Chamber and AHIP efforts to kill the health reform legislation were ultimately unsuccessful, they have certainly contributed to the confusion and division among the American people about the PPACA. The talking points created by the Strategic Communications Advisory Committee of the AHIP were disseminated to the American public by an array of conservative groups (US Chamber of Commerce, Karl Rove’s Crossroads GPS, and the American Action Network) that spent $235 million on ads attacking the PPACA since its passage in March 2010. Only $69 million was spent by groups supporting the law. (http://www.nytimes.com/2012/06/21/health/policy/health-care-law-loses-ad-war.html?pagewanted=all) A group of Aetna shareholders is challenging the insurer for donating over $7 million through AHIP to the US Chamber of Commerce and to the American Action Network. Mercy Investment Services and the Sisters of Charity of Saint Elizabeth claims Aetna “is not in compliance with its corporate political and lobbying disclosure policy.” (http://thinkprogress.org/health/2012/07/14/517291/aetna-shareholders-dismayed-over-insurers-donations-to-anti-obamacare-campaigns/)
An article titled “Distaste for Health Care Law Reflects Spending on Ads” documents how citizens who live near me in the Philadelphia suburbs and would be helped by the PPACA regard it negatively. They have seen the ads from the fearmongering PR campaign, and the ads work. (http://www.nytimes.com/2012/06/21/health/policy/health-care-law-loses-ad-war.html?pagewanted=all)
Today (July 16, 2012) two years after the passage of the law, there is an op-ed in the New York Times titled Five Obamacare Myths. The piece, subtitled “Cutting through slogans and scare stories,” lists five myths: PPACA is a job-killer; PPACA is a federal takeover of health insurance; the unfettered marketplace is a better solution; the States will fix health care without federal involvement; running on the PPACA as an achievement is a bad idea. (http://www.nytimes.com/2012/07/16/opinion/keller-five-obamacare-myths.html?ref=opinion)
The Kaiser Family Foundation has done a number of polls and found that the American public is evenly split 41% to 41% between those who favor the PPACA and those who oppose it. The surveys also demonstrate that many Americans do not really understand what is in the law, but after the Supreme Court ruling a majority (56%) believe the detractors should stop trying to repeal the law and move on to other problems facing the nation (http://healthreform.kff.org/en/public-opinion.aspx)
What does the insurance industry do now that the Supreme Court has largely upheld the PPACA? Keeping in mind the industry’s history of having a two front PR campaign with a public and secret private face, it seems apparent that the health insurance companies need to reinvent their business model.
Aetna CEO Mark Bertolini has been the most outspoken industry leader in declaring the old profitable business model dead. “The system doesn’t work, it’s broke today. The end of insurance companies, the way we’ve run the business in the past, is here.” Bertolini identifies a convergence of regulatory, demographic, and economic factors including the PPACA ban on medial underwriting and the medical loss ratio rules as resulting in a traditional business model that no longer works. And Bertolini does not see the results of the presidential election changing what insurance companies need to do to reinvent themselves. “Reform is not going to stop. It won’t go away.” At least publicly, Bertolini is embracing the PPACA. “We got pulled through the crucible against our will and have been reshaped because of it. For most of what has already been implemented, it has been a pretty good thing.” (http://www.healthdatamanagement.com/news/HIMSS12-Aetna-CEO-insurers-face-extinction-44041-1.html)
Part II will examine how health insurers are trying to reinvent themselves and their business model to respond to health care reform.