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.
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