Connecticut insurers have eyes on Washington

Aetna, Travelers, The Hartford all have to focus on what's happening on Capitol Hill.

See interactive graphic at end of story

Washington – Connecticut insurance powerhouses Aetna, The Hartford and Travelers have different lobbying agendas in Washington, but all three have stepped up their efforts to  influence lawmakers and federal policy.

Collectively, and including on-staff lobbyists, the three spent nearly $10 million lobbying Congress last year. The reason for this: Even though insurance companies are mainly regulated by states, Congress has in recent years approved bills and delved into several issues that strike at the heart of how these companies do business.

Besides the Affordable Care Act, whose implementation health insurers like the Aetna are closely following, there’s a new federal watchdog that Travelers and The Hartford are worried about. Congress’ unpredictability also causes them concern.

The state’s insurance giants “have always been a pretty strong lobby in Washington,” said Robert Hunter, director of insurance for the Consumer Federation of America. “But they are getting stronger as they worry more about federal government intrusion into their businesses.” Mike Barry, spokesman for the Insurance Information Institute, agreed that “in recent years, there has been more federal interest in insurance issues.”

Aetna officials have always kept an eye on the operations of Medicare, Medicaid and other federal health programs and federal health issues. But the Affordable Care Act spurred the company to ratchet up its activities in Washington.

For The Hartford and Travelers, concerns about the Dodd-Frank financial reform act and uncertainty about the fates of terrorism insurance and the federal flood insurance program forced them to sharpen their focus on Capitol Hill.

Although Aetna’s lobbying priorities differ from those of property and casualty insurers The Hartford and Travelers, they have many common interests when it comes to dealing with Washington.

And like most major U.S. companies, all three insurers have political action committees (PACs) that help the companies win friends and allies on Capitol Hill.

Insurers’ PACs

Aetna’s PAC began to grow rapidly in 2004, and this year, it is on its way to breaking its 2012 record of $1 million in political donations. The Travelers PAC also began to expand in 2004, peaking in 2008 when it donated nearly $1 million. It has remained nearly as active since that time.

The Hartford’s PAC peaked at $1 million in donations in 2010, when the Dodd-Frank Act was approved by Congress, and has leveled off a little since.

Barry said the growth of the companies, and subsequent growth in the number of employees willing to give to a federal PAC, may help account for the increased activities of the insurance PACs.

A Connecticut Mirror analysis of PAC donations in this campaign cycle, which began in January 2013, shows that nearly a third of the time, Aetna and Travelers gave political cash to the same select group of lawmakers, including several from Connecticut.

If The Hartford’s PAC is included, the insurers donated to the same lawmakers or lawmakers’ leadership PACs about 25 percent of the time – underscoring the importance of a small group of lawmakers to the insurance industry.

All three PACs gave to the campaigns and/or leadership PACs of Connecticut Sen. Chris Murphy and three of the state’s House representatives: John Larson, D-1^st District, Joe Courtney, D-2^nd District, and Jim Himes, D-4^th District.

While the companies boasted of a bipartisan bent, all three insurer PACs — and especially Aetna’s – donate most of their money to Republicans. Many Aetna PAC donations went to the most strident opponents of the Affordable Care Act, including Louisiana GOP Reps. Charles Boustany and Steve Scalise, and to Wyoming Sen. John Barrasso.

Millions for lobbying

Lobbying disclosure filings in the House of Representatives show that the bulk of the millions all three insurers spend annually to lobby Washington is spent on in-house lobbyists. But the companies also hire some of the biggest lobbying shops in Washington to help them, including Ernst & Young, DLA Piper, Alston & Byrd, Van Scoyoc & Co. and Steptoe & Johnson.

Aetna spent more than $3.5 million lobbying Washington last year; Travelers spent nearly $3 million  million; and Hartford Ins. Co., $2.6 million.

PAC donations buy access to lawmakers for lobbyists, with all three insurance companies contributing to a number of members on the House Ways & Means Committee.

Hunter said this is unsurprising, given the committee’s broad reach into tax and financial issues. This includes the establishment of a new Federal Insurance Office under the Dodd-Frank Act. The FIO is an agency of the Treasury Department that has no regulatory clout, but it monitors the industry and can investigate its practices.

“Some companies are worried about the prospect of more consumer protections,” Hunter said.

The FIO, for example, is investigating the way insurers price auto policies for low-income drivers.

Other industry donations go to lawmakers in positions of leadership and those who sit on committees with jurisdiction over the insurance industry, including the House Finance Committee, Senate Finance Committee, Senate Health, Education, Labor and Pensions Committee and the Senate Banking Committee.

Deciding who gets donations

A lobbyist for Travelers, who spoke on condition of anonymity in deference to the insurer, said lobbyists make suggestions about how PAC money should be spent, but the decision is ultimately left to officers of the company.

Aetna spokesman Matthew Wiggin declined to answer questions about the company’s PAC or lobbying activities. He referred, instead, to the company’s website, which says Aetna’s PAC is funded by contributions from company employees, and that the PAC’s day-to-day operations are the responsibility of the PAC’s treasurer, “subject to the oversight and supervision of the Aetna PAC Board of Directors.”

But the list of those who would receive campaign cash from Aetna is determined by a “contributions committee,” composed of lobbyists who “consider a candidate’s voting record, leadership position, committee assignment and other factors in making contribution decisions.”

Aetna also contributes millions of dollars to state candidates and third party organizations, including political party committees and Super PACs.

Aetna was sued in 2013 by a watchdog group, Citizens For Responsibility and Ethics in Washington, because, the watchdog said, the insurer failed to disclose millions of dollars in corporate donations to groups that were lobbying against the Affordable Care Act by sending out false and misleading proxy statements to shareholders in 2012 and 2013. At issue was $3.3 million to the American Action Network and $4.5 million to a Chamber of Commerce’s political fund in 2012.

Aetna also pays more than $1 million in dues every year to America’s Health Insurance Plans, a trade organization that helps the company lobby Washington.

According to lobbying disclosure reports, Aetna’s main focus this year is the ACA. The company is involved in several proposals that would change Obamacare, including one to redefine who would be considered a full-time worker. The definition now refers to someone who works 30 hours a week; Aetna wants that amended to 40-hour-a-week employees.

Travelers and The Hartford are focusing on the fate of the federal flood insurance program and are concerned about whether Congress will reauthorize the Terrorism Risk Insurance Act, set to expire at the end of 2014. The law provides insurers with a federal backstop that acts like reinsurance in the event of a terrorist incident that results in high numbers of claims.

Property and casualty insurers are also lobbying for Senate passage of a House-approved bill called the Furthering Asbestos Claim Transparency Act of 2013, which would amend federal bankruptcy law so that they may be able to challenge claims against a bankrupt company concerning exposure to asbestos.

Lobbyists for the Travelers and The Hartford insurance companies are also keeping watch on the bitter partisan fights in Congress over the federal budget, a dispute that led to the temporary shutdown of the federal government in 2013.

The shutdown resulted in business interruption claims from companies whose operations were dependent on the federal government.

“And if the government shuts down, the flood insurance program shuts down, too,” the lobbyist for Travelers said.