The Insurance Industry Plays Both Sides

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In a terrific piece of reporting, National Journal’s Peter Stone has revealed that even as the health insurance industry was publicly supporting the Obama Administration’s drive for health care reform last summer, it was secretly funding ads against it during that crucial period:

That money, between $10 million and $20 million, came from Aetna, Cigna, Humana, Kaiser Foundation Health Plans, UnitedHealth Group and Wellpoint, according to two health care lobbyists familiar with the transactions. The companies are all members of the powerful trade group America’s Health Insurance Plans.

The funds were solicited by AHIP and funneled to the U.S. Chamber of Commerce to help underwrite tens of millions of dollars of television ads by two business coalitions set up and subsidized by the chamber. Each insurer kicked in at least $1 million and some gave multimillion-dollar donations.

“There’s no question that AHIP has quietly solicited monies from their members which were funneled over to the chamber for their ads,” said a source. The total donated by the health insurers, according to one estimate, was as much as one-quarter of the chamber’s total health care advertising budget.

A spokesman for Kaiser said it contributed funds to AHIP last year for positive ads on health care reform, and that AHIP has told the insurer that none of its monies were sent to the chamber.

Last August was bruising for the health insurance industry: Obama and congressional leaders attacked its abuses and profits and AHIP President Karen Ignagni warned publicly that “the vilification strategy isn’t going to get health reform passed.”

In late October, Ignagni wrote in a letter to the Washington Post defending a health insurer-funded study critical of congressional cost estimates, “Let me be clear and direct, health plans continue to strongly support reform.” However, by that time money was already flowing through AHIP to the chamber to fund its negative ads.

So why do this secretly? Two reasons: One was to keep the industry’s seat at the table in health negotiations, and the other was to prevent an echo of the past:

The fundraising started last September and continued through December using AHIP as a conduit to avoid a repeat of the political flak that hit the insurance industry after it famously ran its multimillion-dollar “Harry and Louise” ads to help kill health care reforms during the Clinton administration.

“AHIP wanted to do this through a third party because of what happened with the Harry and Louise ads,” said a lobbying source. “The goal was to get a message out there to make sure the public understood the serious shortcomings of the legislative proposals.”

All of this gets us back to the old adage about Washington: No matter how cynical you get, it’s hard to keep up…

UPDATE: This statement from Robert Zirkelbach, the press secretary for America’s Health Insurance Plans, the health insurance lobby group:

“Reform needs to make health care more affordable, particularly for small businesses that struggle to provide coverage to their employees. We share the very serious concerns employers have raised about provisions that will increase health care costs, including new premium taxes that will hit small businesses hard. So when the employer community—our customers—asked us to contribute to their campaign, we readily agreed.”

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