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Health insurers throw support behind Republican candidates

Los Angeles TImes, 10/4/10

By Noam N. Levey
Los Angeles Times
October 4, 2010

Reporting from Washington — The insurance industry is pouring money into Republican campaign coffers in hopes of scaling back wide-ranging regulations in the new healthcare law, while preserving the mandate that Americans buy coverage.

Since January, the nation's five largest insurers and the industry's Washington-based lobbying arm have given three times more money to Republican lawmakers and political action committees than to Democrats.

That is a marked change from 2009, when the industry largely split its political donations between the parties, according to federal election filings.

The largest insurers are also paying hundreds of thousands of dollars to lobbyists with close ties to key Republican lawmakers who could shape health policy in January, records show.

"The industry would love to have a Republican Congress," said Wendell Potter, a former executive at Cigna Corp., one of the country's biggest insurers. "They were very, very successful during the years of Republican domination in Washington."

Many GOP leaders have enthusiastically embraced the call to revise the healthcare legislation, vowing to "repeal and replace" the law in the next session.

But that call to repeal poses a delicate issue for the budding GOP/insurance industry partnership. The GOP believes it has a winning position in denouncing the unpopular mandate that will require Americans to get health insurance starting in 2014, while insurers and independent healthcare experts see the requirement as crucial to controlling costs for everyone by spreading risk.

The healthcare law will penalize Americans $95 in 2014 if they fail to get insurance. The penalty rises to $695 in 2016.

"The one thing that insurance companies would love to see are penalties that are actually stronger," said Jeff Fusile, a partner at consulting giant PricewaterhouseCoopers.

The insurance industry, attracted by the prospect of millions of new customers as a result of the coverage mandate, initially backed President Obama's campaign to overhaul the healthcare system. And insurers scored a key victory when Democrats abandoned plans to create a government insurance plan, or "public option." But insurers are increasingly balking at the myriad new directives in the healthcare law.

Among other things, the law prohibits insurance companies from denying coverage to sick children and canceling policies when customers get sick. The law bars insurers from placing lifetime caps on how much they will pay when their customers get ill.

Many consumers will also get new rights to appeal denied claims and win new access to preventive care without being asked for copays.

"The health reform law did not deliver the uninsured in the way that insurers wanted," said veteran healthcare analyst Sheryl Skolnick, senior vice president at CRT Capital Group.

Some insurers have said recently they will stop selling some policies rather than comply with a mandate to insure sick children.

Insurers are also fighting efforts by the Obama administration to expand federal oversight of premiums. And many industry leaders worry about new regulations that will set minimum standards for the scope of benefits they offer.

America's Health Insurance Plans president Karen Ignagni, one of the industry's lead Washington lobbyists, said several of these new requirements will exacerbate already skyrocketing healthcare costs.

"The underlying problem is still with us," Ignagni said. "What we have to do now is focus on how we get to this issue of affordability."

Ignagni warned that the problem would worsen in 2014, when insurance companies face a new tax and are forced to limit how much they can vary premiums based on a customer's age. Now, the industry is looking to Republicans for more relief.

Cigna's head lobbyist, G. William Hoagland, a former senior Republican Senate aide, said the company hopes to get a more receptive hearing next year. "This is all political now," he said. "Once we get beyond the election, maybe cooler heads will prevail."

Insurers in the past have been able to count on the GOP, which often helped shape the market to the industry's specifications.

Republicans expanded Medicare's use of commercial insurance companies to administer benefits, which has been very profitable for insurers. With the help of GOP legislation, insurers have also increasingly shifted costs to consumers through high-deductible plans.

And Republicans have pushed to allow insurance companies to sell their plans across state lines, avoiding state regulations. Party leaders have made that a centerpiece of their 2011 healthcare agenda.

"We generally support candidates whose views align with our business and healthcare interests," said Aetna spokeswoman Anjie Coplin.

Hartford-based Aetna Inc., which gave more to Democrats in 2009, has given nearly three times more to the GOP this year. Louisville, Ky.-based Humana Inc. did the same.

And Indianapolis-based WellPoint Inc., which was vilified by Democrats for proposing huge rate hikes in California, has given nearly nine times as much to Republicans this year.

WellPoint's lobbying team also includes a former senior aide to Wyoming Sen. Michael B. Enzi, who would chair the Senate health committee should Republicans take the chamber. Enzi is a leading proponent of less state regulation of health plans.

Aetna and Humana have hired former Republican aides to the Senate Finance Committee, which would also play an important role in modifying the healthcare law.

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