!! History Commons Alert, Exciting News
Profile: Karen Ignagni
Karen Ignagni was a participant or observer in the following events:
BlueCross BlueShield logo. [Source: TopNews (.us)]Health insurers have mobilized tens of thousands of employees to fight against the Democrats’ health care reform initiative, according to reports by the Los Angeles Times and the Wall Street Journal. The insurance industry’s primary motive seems to be financial gain, according to the Times reporters. Many of the nation’s largest insurers, including UnitedHealth, have urged their employees to become involved in protesting health care reform, and provided advocacy “hot line” telephone numbers, printed “talking points,” sample “letters to the editor,” and other materials in almost every Congressional district throughout the nation. And many insurers, including BlueCross Blue Shield, have sponsored anti-reform television ads targeting conservative “Blue Dog” Democrats, many of whom are considered vulnerable to pressure from the industry. The insurance industry is paying for over 900 lobbyists, spending $35 million in the first half of 2009 lobbying Congress and the White House. AFL-CIO spokesman Gerald Shea says: “They have beaten us six ways to Sunday. Any time we want to make a small change to provide cost relief, they find a way to make it more profitable.” [Los Angeles Times, 8/24/2009; Wall Street Journal, 8/24/2009]
Jamming the 'Town Halls' - Insurers like UnitedHealth and others are sending their employees to “town hall” meetings to protest against reform. The Journal reports, “[T]he industry employees come armed with talking points about the need for bipartisan legislation and the unintended consequences of a government-run health plan to compete with private insurers.” But they are instructed not to become contentious and argumentative, according to a “Town Hall Tips” memo provided by the industry’s chief lobbying organization, America’s Health Insurance Plans (AHIP—see Before August 6, 2009). The memo warns those attending the meetings to expect criticism, and to stay calm. “It is important not to take the bait,” the memo cautions. AHIP president Karen Ignagni says the town hall meetings are an opportunity “to strongly push back against charges that we have very high profits. It’s very important that our men and women… calmly provide the facts and for members of Congress to hear what these people do every day.” Larry Loew, who works for the insurance administration firm Cornerstone Group, says he attended a recent town hall meeting hosted by Representative Alan Mollohan (D-WV) because “my whole industry is being threatened.” Loew claims he was not coached by AHIP, but admits to preparing for the meeting by gathering talking points from hospital and insurance company Web sites. AHIP spokesman Robert Zirkelbach says about 50,000 employees have been engaged in writing letters and making phone calls to politicians or attending town hall meetings. [Wall Street Journal, 8/24/2009]
'Hallelujah!' - One industry proposal that is gaining traction among some in Congress is the so-called “individual mandate,” which would require all citizens to buy some form of health insurance. That provision would guarantee insurers tens of millions of new customers—many of which would receive government subsidies to help pay the premiums. Robert Laszewski, a former health insurance executive who now heads the consulting firm Health Policy and Strategy Associates, says of the provision, “It’s a bonanza.” The industry’s reaction to early negotiations can, Laszewski says, be summed up in a single word: “Hallelujah!” Linda Blumberg, a health policy analyst at the nonpartisan Urban Institute, says, “The insurers are going to do quite well” with health care reform. “They are going to have this very stable pool, they’re going to have people getting subsidies to help them buy coverage, and… they will be paid the full costs of the benefits that they provide—plus their administrative costs.” Aetna’s chief executive, Ron Williams, says: “We have to get everyone into the insurance market. That is a huge, big deal [and] everyone has coalesced around that.” [Los Angeles Times, 8/24/2009; Wall Street Journal, 8/24/2009]
Battling the Public Option, - Insurers have fought most strongly against the so-called “public option,” which would create a government-run, non-profit alternative to private health insurance. Some polls are showing public support for the public option has declined, and stock prices for the insurance corporations have tracked upwards. Other insurance industry proposals are gaining ground. The Senate Finance Committee is considering a proposal to lower the proposed mandatory reimbursement rate for insurers to policyholders from 76 percent to 65 percent, and the industry is pressuring Congress to lower the limit that insurers must meet to cover a policyholder’s medical bills, leaving more of the money it gleans from premiums as profits. “These are a bad deal for consumers,” says J. Robert Hunter, a former Texas insurance commissioner who works with the Consumer Federation of America. Insurance companies would reap huge profits by providing less insurance “per premium dollar,” he says. Former Cigna executive Wendell Potter says, “It would be quite a windfall” for the insurance industry. [Los Angeles Times, 8/24/2009]
Entity Tags: Consumer Federation of America, UnitedHealth Group, Urban Institute, Wall Street Journal, BlueCross Blue Shield, Alan Mollohan, Senate Finance Committee, AFL-CIO, Aetna, America’s Health Insurance Plans, Wendell Potter, Robert Laszewski, Health Policy and Strategy Associates, Gerald Shea, Cornerstone Group, J. Robert Hunter, Robert Zirkelbach, Ron Williams, Linda Blumberg, Karen Ignagni, Larry Loew, Los Angeles Times
Timeline Tags: US Health Care
America’s Health Insurance Plans (AHIP), the health insurance industry’s largest lobbying organization, releases a study that claims the Democrats’ health care reform initiative would send health insurance costs sharply upward. The study is released the day before the Senate Finance Committee votes on its version of the reform proposal. [The Week, 10/12/2009] AHIP says it intends to circulate the study among lawmakers on Capitol Hill and use it as the basis for new advertisements attacking the health care reform proposals. [Washington Post, 10/12/2009] NBC Washington calls the study “a surgical strike against Democrats’ best hope for passing health reform,” specifically targeting the Finance Committee’s legislative efforts, which it calls the “Baucus bill” for committee chairman Max Baucus (D-MT). Until now, AHIP has operated largely behind the scenes to delay or terminate Congressional efforts to reform US health care; the study marks its most public and overt effort to influence the discussion. According to the study, which was carried out by accounting and services firm PriceWaterhouseCoopers (PWC) and paid for by AHIP, the average cost increase would be $1,700 per family per year by 2013. “[T]he cumulative increases in the cost of a typical family policy… will be approximately $20,700 more than it would be under the current system,” the report claims. “[T]he cost of coverage for both single and family policies in the individual, small group, large group, and self-funded insurance markets” will rise dramatically. AHIP official Karen Ignagni says private insurers would almost certainly pass cost increases to consumers for a number of reasons, including her claim that too many people with pre-existing conditions would sign up for insurance. “The report makes clear that several major provisions in the current legislative proposal will cause health care costs to increase far faster and higher than they would under the current system,” she writes. Baucus calls the study “seriously flawed.” A spokesman for the Finance Committee, Scott Mulhauser, says: “Now that health care reform grows ever closer, these health insurers are breaking out the same, tired playbook of deception to prevent millions of Americans from getting the affordable, accessible care they need. It’s a health insurance company hatchet job, plain and simple.” [America's Health Insurance Plans, 10/11/2009; NBC Washington, 10/12/2009; Washington Post, 10/12/2009] An analysis of the committee’s proposal by the Congressional Budget Office (CBO) shows that while some people’s premiums would go up, the subsidies to be provided by the government would make health insurance considerably less expensive for most consumers. According to the CBO, premiums under the government “exchange” option proposed in the Baucus bill would cost consumers $14,400 per year in 2016, while the average private insurer would charge their customers $21,300 by 2016. [Think Progress, 10/12/2009] Nancy-Anne DeParle, director of the White House Office of Health Reform, says PWC is not the firm to have carried out such a study. “Those guys specialize in tax shelters,” she says. “Clearly this is not their area of expertise.” [Washington Post, 10/12/2009] Almost immediately after the study’s release, critics begin attacking it, calling it deeply flawed and an “industry hit job” (see October 11-12, 2009). And PWC itself will back away from the study’s central claims (see October 12, 2009).
Within minutes of the release of a new study by health insurance lobbying firm America’s Health Insurance Plans (AHIP) that claims health care reform would drastically raise costs to American families (see October 11, 2009), critics from different sides of the political divide dispute the study’s accuracy and question its impartiality.
White House: Study Ignores Key Elements of Reform - White House assistant press secretary Reid Cherlin says the study “conveniently ignores critical policies that will lower costs for those who have insurance, expand coverage, and provide affordable health insurance options to millions of Americans who are priced out of today’s health insurance market or are locked out by unfair insurance company practices.” [MSNBC, 10/12/2009]
'Blowback' from Study Possible - White House and Senate officials say that the insurance industry may suffer “blowback” over the report. Democrats may well close ranks behind either the Senate Finance Committee (SFC) bill or another version of the legislation, and liberal lawmakers may go after the insurance companies, maybe by proposing a cap on premiums or solidifying support for the government insurance plan. “They have opened themselves up,” says a senior Senate Democratic aide. “It is an incredibly stupid strategic blunder. If you are going to fire a shot like this, you fire a good shot.” Former industry executive Wendell Potter, who has become an industry whistleblower (see July 10, 2009), says AHIP is responding to critical analyses from Wall Street that the legislation will hurt private insurers. “Karen [AHIP official Karen Ignagni] had no alternative because the CEOs were so determined to do something to try to sway the committee to back off the reductions,” he says. “She didn’t have an alternative. They are obviously doing this on the eve of the vote in the Senate Finance Committee, hoping enough members of the committee would be concerned, to restore it. I think the strategy will backfire.” [Politico, 10/12/2009]
Economist: Study Fundamentally Flawed - MIT economist Jonathan Gruber analyzes the PWC study and concludes that it is fundamentally flawed. He writes: “The nonpartisan analysis based on information from the CBO [Congressional Budget Office] shows clearly that for those facing purchase in the non-group market, the SFC bill will deliver savings ranging from several hundred dollars for the youngest consumers to over $8,500 for families. This is in addition to all the other benefits that this legislation will deliver to those consumers—in particular the guarantee, unavailable in most states, that prices would not be raised or the policy revoked if they became ill.” On MSNBC, Gruber notes: “If the report had came out and said, ‘look we need stronger penalties, or premiums will go up,’ that’s a very valid point to make. But what the report says is that it went too far. It said with the current structure, premiums will be much higher than they are today. And that’s just wrong. I mean, the nonpartisan Congressional Budget Office has came out and said that for this bill, premiums in the exchange will be lower than they are in the none group market today. So they just drew the wrong comparison.” [Massachusetts Institute of Technology, 10/12/2009; Think Progress, 10/13/2009]
Democrats: Proof that Industry Needs Further Regulation - Representative Anthony Weiner (D-NY) says, “[T]he health insurance lobby today fired the most important salvo in weeks for the public option,” and adds that the study proves the industry needs further regulations imposed on it by Congress: “If you have the health care industry complaining that we’re going to raise costs because of these changes, it is them putting us on notice that we haven’t put enough cost containment in the bill. You know, the health care industry themselves is putting out a whole report saying that. That should be a tell to the [Senate Finance Committee] that you know what, maybe it’s time for them to go back and revisit the public option. In a strange way, and look, obviously they didn’t mean this, the health insurance lobby today fired the most important salvo in weeks for the public option, because they have said, as clear as day, left to their own devices, according to their own number crunchers, they’re going to raise rates 111 percent.” [Think Progress, 10/12/2009] Senator John D. Rockefeller (D-WV) charges the insurance industry with releasing a false study for political purposes. “The misleading and harmful claims made by the profit-driven insurance companies are politicking for corporate gain at its worst,” he says. “Their recent statements only further highlight that our focus here in Congress must be on the inclusion of a public health insurance option in the marketplace to protect families and put more money back in their wallets by creating greater competition and driving down costs.” [Politico, 10/12/2009]
Washington Post: 'Industry Hit Job' - The Washington Post’s Ezra Klein calls the report “deceptive” and “a predictable industry hit job,” and notes that the study was produced by accounting and services firm PriceWaterhouseCoopers (PWC), which in the 1990s was commissioned by the tobacco industry to do a study on the economic catastrophe that would result from taxing tobacco products. That study was found to be unreliable, and, perhaps not surprisingly, made all of its errors in favor of the tobacco industry. Klein writes that the same effect can be observed in this report on health care. He concludes: “But if the [study] doesn’t offer much in the way of trustworthy policy analysis, it is an interesting looking at the changing politics of the issue. In short, the insurance industry is getting scared. After many months of quiet constructiveness, they’re launching a broadside on the week of the Senate Finance Committee’s vote. The White House, which had a pleasant meeting with the industry’s leadership last week, was shocked by the report, and so too was the Senate Finance Committee. The era of cooperation seems to be over, and they weren’t given much advance warning. But the report might have another impact, too: The evident anger and fear of the insurance industry might do a bit to reassure liberals that this plan is worth supporting, after all.” [Washington Post, 10/12/2009]
New Republic: 'Questionable Assumptions' - The New Republic’s Jonathan Cohn chastizes PriceWaterhouse for deliberately, and explictly, choosing to believe that all the new factors included in the study will raise costs, when other analyses show that many of those factors will actually drive costs down. Cohn writes that the study is based on a plethora of “strange [and] questionable assumptions.” [New Republic, 10/11/2009]
Progressive Columnist: 'This Is News?' - Progressive columnist Josh Marshall wrote before the study was released: “Let me get this right. The big news tomorrow is that ‘America’s Health Insurance Plans’ (AHIP, aka the health insurance lobby) has commissioned a study by PriceWaterHouseCoopers that comes to the conclusion that the Senate Finance Committee bill is a bad, bad thing and would lead to health care costs going up even faster than they are under the current system. This is news?” [Talking Points Memo, 10/12/2009]
Washington Times: Defending the Study, Attacking the CBO - The conservative Washington Times defends the study as essentially accurate, and instead attacks the Congressional Budget Office, whose own figures differ dramatically from the PWC study. The Times editorial board calls the CBO’s estimates “fanciful” and “grandly overoptimistic,” and accuses the Democrats of adding opportunities for consumers to “game the system”—“It’s a mystery how the CBO can make its evaluation without once mentioning that individuals easily will be able to go without insurance while they are healthy and then buy insurance after they get sick.” The entire proposal allows Democrats to “avoid electoral accountability over the urgent health care needs of the people they say they’re trying to help but won’t.” [Washington Times, 10/12/2009]
AHIP Defends Study - Ignagni defends the study and says the lobbying firm did not release it to undermine the Finance Committee’s attempt to craft an acceptable reform bill. She says the industry’s main concern is getting everyone involved in health care to work together to bring costs down. There is a strong need, she says, to “encourage all the other stakeholders to participate in a broader effort so that they can too lend a hand and get costs under control in a much more effective way than we would.… We don’t see comprehensive cost control in any legislation.” [MSNBC, 10/12/2009]
PWC Backs Off from Study - Late in the evening, PWC issues a statement noting that the study only examined “a small slice” of the health care reform initiative, and saying that if other provisions in the reform package succeed in lowering costs, then the estimates of cost increases claimed in the study would be inaccurate (see October 12, 2009).
Entity Tags: America’s Health Insurance Plans, Anthony D. Weiner, Jonathan Gruber, Congressional Budget Office, Ezra Klein, Jonathan Cohn, Wendell Potter, John D. Rockefeller, PriceWaterhouseCoopers, Karen Ignagni, Washington Times, Obama administration, Joshua Micah Marshall, Reid Cherlin, Senate Finance Committee
Timeline Tags: US Health Care
Receive weekly email updates summarizing what contributors have added to the History Commons database
Developing and maintaining this site is very labor intensive. If you find it useful, please give us a hand and donate what you can.
If you would like to help us with this effort, please contact us. We need help with programming (Java, JDO, mysql, and xml), design, networking, and publicity. If you want to contribute information to this site, click the register link at the top of the page, and start contributing.