During the campaign, Barack Obama promised his cheering crowds that, when he rolled up his sleeves to work on health care, he would “have insurance company representatives and drug company representatives at the table. They just won’t be able to buy every chair.” Now is the time to look at just what kind of seats special interest groups are having at Obama’s table and what they’re doing to bring the public around to their ways of thinking. This is the thirteenth of an occasional series of posts that will analyze their activities and how the media are covering them. The entire series is archived here.
BusinessWeek has finally done the story I have been waiting all year to see—an in-depth analysis of insurance company efforts to influence the outcome of health reform. The cover story by Keith Epstein and Chad Terhune, who did excellent insurance reporting during his days at The Wall Street Journal and knows the terrain, took on United Healthcare, the country’s largest insurer.
United Healthcare is the same company that provides the insurance coverage seniors buy from AARP; the same company that is now using billboards to advertise its family option plans; the same company that bought Golden Rule Insurance a few years back, and with it its expertise in cherry-picking only the healthiest customers; the same company whose subsidiary owns the Lewin Group, whose studies are influencing the direction of the debate; the same company that got in trouble with New York’s attorney general for overcharging policyholders. Yes, United Healthcare is everywhere, especially in and outside Congress.
BusinessWeek’s story goes far beyond lists of campaign cash which insurers and other big, important stakeholders have lavished on elected representatives. Instead it gets to the nitty gritty of influence peddling that shows why insurance companies will rule once again. It’s no secret that insurance giants like United, Aetna, WellPoint, and Cigna will be the biggest winners in reform legislation that will require every American to carry insurance. Millions of people who now have no coverage will have to buy policies from these very companies—and that, of course, means billions in new profits. But to make this happen, they need to kill any chance of a public plan option that would compete with private insurers. BusinessWeek reports that the industry is driving the final stake through the heart of a public plan, which may be all but dead anyway.
United and the other biggies have focused on shaping the views of moderate Democrats and the Blue Dogs, and the strategy seems to be paying off. Says BusinessWeek:
UnitedHealth has distinguished itself by more deftly and aggressively feeding sophisticated pricing and actuarial data to information-starved congressional staff members. With its rivals, the carrier has also achieved a secondary aim of constraining the new benefits that will become available to tens of millions of people who are currently uninsured.
Reporters Epstein and Terhune illustrated this strategy with the story of Rep. Jim Matheson, D-Utah, a leader of the influential Blue Dog Coalition. In mid-summer, United parked an eighteen-wheeler mobile diagnostic center, full of high-tech medical gear, near the Capitol and invited members of Congress to stop by for a look. BusinessWeek reported that Matheson “didn’t disguise his wonderment.” “’Fascinating, Amazing,’” the congressman exclaimed. He told the magazine that “the tried and true message of their advocacy is making sure the information they provide is accurate and considered.” And from the looks of the ups and downs of the public plan, it does seem that United’s material is being considered.
BusinessWeek also showed how the insurer worked closely—very closely—with rookie senator Mark Warner, a Democrat from Virginia, providing research and analysis to support his initiatives. When, in June, Warner introduced legislation that would expand Medicare and Medicaid coverage for hospice stays and other end-of-life treatment, United was at the ready with facts and figures to support Warner’s argument that, in the long run, the new coverage would save money. Although this was not a top priority for United, it brought lots of good will. Warner thanked the company and put a letter from United applauding his work in the Congressional Record.
BusinessWeek added that Warner echoes United’s stand on a public option, saying it could be a “Trojan horse for a single-payer system.” The CEOs of United’s biggest corporate clients, like Delta Airlines, have come to see the senator. In the long run, such access trumps money in the lobbying game.
Adding fertilizer to its grass tops advocacy, United hired Simon Stevens, who once served as an advisor to former British prime minister Tony Blair. Stevens has been making the rounds in Congress, telling members that they need not follow the British example. He even hand-delivered a report on cost savings measures to key senators. While noisy grassroots advocates have focused on all the money that insurers have given to Senate Finance chairman Max Baucus and other members of his committee, United has quietly been working its magic on the committee’s draft legislation.
As we have pointed out, the media has scarcely mentioned the subject of minimum benefits and comprehensiveness of coverage. While the media has been hyper-focused on the political horserace, United has been hyper-focused on ensuring that consumers shoulder more of the cost of their care. As BusinessWeek notes, the company benefits when policyholders pick up more of the tab, and United has been trying to make that happen.
In late spring, the Finance Committee was considering making consumers pay, on average, 24 percent of their medical costs, in addition to their normal insurance premiums. After Stevens and other company officials got involved, the committee upped the amount policyholders would have to shoulder to 35 percent—a number that was much more to the company’s liking. The final number is still up in the air. But that number is crucial to whether reform will be meaningful or fanciful.
Last week, the industry’s uber-lobbyist Karen Ignagni, who heads the trade group America’s Health Insurance Plans, was upset that her industry is being “demonized.” Ignani decried “the same old Washington politics of find an enemy and go to war.” What a puzzling remark! BusinessWeek’s story shows beyond a reasonable doubt that, for her industry’s biggest player, it is the same old Washington politics and then some. And it is United Healthcare that has gone to war.