Insurance industry says no to repeal of health care reform, but reticent on details

WASHINGTON–As House Republicans make their first run at the health care reform law, Democrats say the GOP is doing the bidding of big insurance.

“Why are they engaged in this effort?” asked Rep. Rosa DeLauro, D-3rd District. “Because, quite frankly, I believe it’s what the insurance companies want.”

It just ain’t so, comes the response from Hartford, where insurance giants such as CIGNA, Aetna, and UnitedHealthcare all have major corporate offices.

“Our focus remains on implementing the law and the various provisions that just recently took effect, from extended dependent coverage to enhance preventive care and tax credits for small businesses,” said Daryl Richard, a spokesman for UnitedHealthcare.

The true role of Connecticut’s big insurance firms, and other industry players across the country, remains to be seen. But there’s little question they have much at stake as this new twist in the debate over health reform gets underway.

The House proposal to repeal the health care law is almost certain to pass, but it will likely die in the Senate. (The House vote was originally set for this week, but it has been delayed in light of the Arizona shootings that targeted, among others, a Democratic congresswoman from that state.)

If full repeal fails, Republican opponents have promised a fresh offensive, going after the law in bits and pieces.

Health insurance interests spent millions of dollars on lobbying in 2009 to help shape the original overhaul. And they’ve spent millions more in 2010 trying to influence federal bureaucrats charged with writing regulations to implement the law.

It’s unlikely they will sit on the sidelines now as this new skirmish gets underway. At least two insurance company CEOs–at Aetna and CIGNA–have said they don’t support overturning the health care law, even if they’re not thrilled with all its particulars.

“I don’t think it’s in our society’s best interest to expend energy in repealing the law,” Cigna CEO David Cordani said at a health care conference in November, shortly after the elections that swept the GOP to power in the House and trimmed Democrats’ majority in the Senate. “Our country expended over a year of sweat equity around the formation of it.”

Aetna President Mark Bertolini told that same audience: “We can’t go back. We need to keep moving forward.”

Consumer groups say it’s no wonder the industry is taking this stance.

“There’s a very good reason for that,” said Carmen Balber, director of the Washington office for Consumer Watchdog, a liberal advocacy group that has been closely tracking health reform.

“They spent over $80 million lobbying on the bill and they got their two main goals–they killed the possibility of a public option and they got a mandate included that requires every American to buy their product,” Balber said. “That mandate is a money-maker for the industry.”

The requirement that nearly all individuals purchase insurance, which goes into effect in 2014, could bring some 30 million new customers to the doors of Aetna and other firms.

“That was something that they adamantly insisted was necessary to make insurance market reforms actually work,” said Rep. Joe Courtney, D-2nd District.

To be sure, the mandate and the market reforms went hand-in-hand. The latter include new consumer protections that prevent insurance companies from denying coverage to patients with pre-existing conditions, that allow young adults to stay on their parents’ policies until age 26, and that end lifetime caps on insurance coverage.

Among the American electorate, those are among the most popular elements of the law. The mandate is among the least popular.

“If the public had its way, the most unpopular piece of reform would be repealed and that’s the mandate,” said Balber. “But I certainly believe the industry would pull out all the stops to preserve that provision.”

Aetna, United, and CIGNA all declined to answer specific questions related to heath reform repeal, such as what provisions they might like to see undone and what they’d like to see saved.

“We will remain compliant with the new health care law, and we will continue to advocate for a stronger focus on improving quality and affordability in the health care system,” said Aetna spokesman Mohit M. Ghose.

A CIGNA spokeswoman provided some “talking points” from a recent presentation by the company’s top health reform implementation executive, Tom Richards  The reform teams at Cigna “are busy at work and these efforts will only intensify as we ring in the New Year,” Richards’ talking points say.

The insurance industry’s lobby group in Washington, America’s Health Insurance Plans, was only a little bit more forthcoming.

Robert Zirkelbach, AHIP’s spokesman, said the industry wants to see changes in the law “in order to minimize coverage disruptions and cost increases.”

“While the new law will bring more people into the system, major provisions will raise costs and disrupt the coverage people have today,” he said. “We will continue to work with members of Congress from both parties to address these issues.”

The provisions AHIP sees as problematic include, for example, limits on how much more insurers can charge older patients versus younger patients and scheduled cuts to Medicare Advantage subsidies, which uses private insurers to deliver Medicare services.

AHIP and other insurance interests have also opposed strict regulations allowing review of “unreasonable” rate increases and new rules requiring insurance companies to spend at least 80 percent of their customers’ premium payments on medical care, as opposed to administrative expenses or CEO salaries.

Critics say the industry would probably like to see those provisions undermined, if not nixed entirely.

“The industry won’t be publicly for full repeal, but they may be working behind-the-scenes as hard as they can to weaken enforcement of some of their least favorite requirements,” Balber said, citing the 80 percent requirement as one juicy target for big insurance firms.

Once the full repeal vote is over, House Republicans have vowed to go after narrow provisions in the law. They’ve also called for trying to block funding to enforcement and implementation of the law.

It’s unclear just how the insurers will react to these more targeted strikes. Some industry critics predict they will support any effort to weaken the measure.

But industry officials say that blocking funding or implementation could cause chaos and uncertainty.

Bertolini, of Aetna, said such efforts could lead the healthcare industry to “a bad place.” A stalemate with a total funding shutdown “would be problematic,” he said at the November conference.

Ghose declined to elaborate on his boss’s remarks.

But another industry source said that defunding implementation of health reform, while leaving the law in place, is far from ideal. For starters, health insurers have spent millions of dollars trying to shape key regulations and then complying with them.

“If we still have to abide by it, but there’s no ability for federal agencies to give us clarity on how to do that, I can’t imagine that being very good for us,” said the source, who asked for anonymity to be more candid. “Either have the law, or get rid of it. Having a big in between” would not be good.

DeLauro acknowledged the industry’s perspective might be more “complicated” than a full-throated push for repeal. But she said she still believes the GOP is driven in large part by the industry’s wishes. And she said she thinks that means overturning major protections for consumers.

Insurance companies “want to make it as difficult as possible to move forward” with the law, said DeLauro.