What Are Insurers Up To?

It depends on whose story you read

Two views of the insurance industry lobby emerged in the press the last couple of weeks—one an AP puff piece bordering on PR for the industry trade group, America’s Health Insurance Plans (AHIP), and the other a thoughtful, incisive article by Los Angeles Times columnist Michael Hiltzik. The stories are instructive for those following the activities of AHIP, which will be super influential as soon as there’s a health bill to mark up behind the scenes in Congressional meeting rooms.

The lede of an AP story by Ricardo Alonso-Zaldivar projected a positive spin for the insurance industry, not exactly a popular bunch these days. “The health insurance industry is working on a transformation that could come right out of ‘Extreme Makeover,’” Zaldivar wrote, reporting that insurers, long cast as villains that denied coverage and services, “now are representing themselves as indispensable partners in health care overhaul.” They are showing, he said, that they are in a unique position to improve medical quality, root out waste, and save money so everyone can be covered—with policies sold by their members, of course. Said AHIP president Karen Ignagni: “We understand we need to come to the table with very specific solutions.”

The story explained how “the industry has won a measure of respect from some longtime adversaries” such as John Rother, AARP’s chief lobbyist, and Ron Pollack, the Families USA head who has become the go-to person for quote when the media need a liberal viewpoint. It’s not clear how adversarial either Rother or Pollack really are, or whether they will be AHIP allies in the end.

AARP makes a bundle selling seniors health insurance policies offered by some of the biggest carriers on AHIP’s membership roster. Pollack’s group has strong ties to supporters of the Massachusetts health reform law that essentially delivers thousands of customers to private insurers. The current president of the Blue Cross Blue Shield of Massachusetts Foundation sits on the board of Families USA. As Campaign Desk pointed out yesterday, the Foundation served as the catalyst for the law, and is deeply involved in its implementation.

Zaldivar noted that insurance companies might become partners with the government—“that’s not as strange as it may seem”—and he pointed out how private carriers now provide Medicare’s prescription drug benefit. The story then devoted several graphs to insurance giant WellPoint, a carrier that has been in big trouble with the government for denying seniors access to critical medications they were entitled to under the drug benefit. The AP story didn’t get into that, but instead, in a bit of advance publicity for WellPoint, discussed a soon-to-be-released study by the carrier that found doctors who treat patients with back pain don’t always follow national guidelines, sometimes rushing to do expensive imaging tests and surgery before the guidelines say they should. Postponing such procedures could save some $24 million annually. “We think we can play a central role in delivering value,” WellPoint CEO Angela Braly told the AP.

An extreme makeover for the insurance industry? Hiltzik, on the other hand, made clear that there was no makeover at all. His column dissected AHIP’s current positions compared to those it held in the past. After reading the trade association’s sixteen-page policy, Hiltzik concluded that “its version of ‘reform’ comprises the same wish list that the industry has been pushing for decades.” Hiltzik ticked off those wishes for readers. The industry wants:

• The government to assume the cost of treating the sickest people.
• The government to clamp down hard on doctors’ and hospitals’ fees.
• Permission to sell stripped-down, low benefit policies without interference from state regulators.
• The government to require every American to buy insurance coverage in exchange for agreeing to accept every applicant, even those at death’s door.

Hiltzik further described what the industry has in mind for covering sick people, and he notes that its reform plan proposes a system that “spreads the costs for high-risk individuals across a broader base”—in other words, dumping more of the cost onto the taxpayers. Hiltzik told of an industry consultant who, at an industry conference last year, called those patients “clinical train wrecks.” That’s not a very nice way to talk about people seriously ill with heart disease or cancer. Like Zaldivar, Hiltzik also quoted Ignagni. At the recent White House health summit, she told attendees: “You have our commitment to play, to contribute and to help pass healthcare reform this year.” “On the coy and noncommittal scale,” Hiltzik said, “the statement rates a 10.0.”

All this reminds me, too, of the industry’s actions when the movie Sicko came out. The insurers’ PR apparatus sprang into action, sending its apostles out on press missions armed with talking points and reports to bolster its agenda while blunting the movie’s impact. At that time, the industry was pushing its manifesto, called “A Vision for Reform.” At the end of the document, the trade group proclaimed: “We stand ready to engage in a dialogue with the federal and state governments and with other stakeholders to advance these policies and to work to provide access to all of the uninsured Americans.”

Gee—that doesn’t sound much different from what Ignagni is saying now. Has the industry really undergone an extreme makeover?

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Trudy Lieberman is a longtime contributing editor to the Columbia Journalism Review. She is the lead writer for The Second Opinion, CJR's healthcare desk, which is part of our United States Project on the coverage of politics and policy. She also blogs for Health News Review. Follow her on Twitter @Trudy_Lieberman.