By now, you know the story of the PricewaterhouseCoopers’ report that came out this week. It was commissioned by the health insurance industry to show how private rates might rise under health reform. It used narrow, worst-case scenario assumptions, and ignored other parts of the reform effort that would lower costs. It was widely condemned by Democrats in Congress and at the White House, and prompted Republican complaints of crippling costs hidden in the current legislation.
In public, it was a typical Washington squabble: Public attack, counter-attack, recrimination, move on. Much less attention has been paid to just how personal the confrontation was for some major health reform players behind the scenes. For this week’s TIME magazine (subscribe here; get link here) Jay Newton-Small and I spoke with a number of people, at the White House, in the Senate and in the insurance lobby, and found a remarkable level of mistrust between people who were meeting regularly as recently as last week. Most alarmingly, they disagree over basic facts.
On Oct. 6, five days before the report came out, a senior Finance Committee aide and Nancy-Ann DeParle, who runs the reform effort at the White House, called Karen Ignagni, the top lobbyist for America’s Health Insurance Plans. They both say that they asked Ignagni the rumors that the industry would release a report slamming the Senate Finance Committee bill were true. “We asked her, ‘Are you about to put out a report?” DeParle remembers. “She said, ‘No, We are miles away from putting out a report.’”
Ignagni says that is simply not true. “I know precisely what I said,” said Ignagni, who runs America’s Health Insurance Plans. “I wanted to make sure that they knew that there were two studies coming out next week.”
But the disagreements do not stop there.
Both DeParle and the Senate aide say that on the same call Ignagni made a point of mentioning the issue of executive compensation. There was an amendment, sponsored by Arkansas Sen. Blanche Lincoln, that would increase taxes on high-paid health insurance industry executives by $600 million over the next ten years. “I believe I said, ‘The Lincoln Amendment? You mean the Lincoln Amendment,’ ” DeParle remembers of her phone call with Ignagni. “She said, ‘Well there is that, but there is also this thing that Henry Waxman did.’ ” DeParle said she later decided that Ignagni had been referring to an investigation into health insurance executive compensation that Rep. Henry Waxman, D-Calif., had launched. DeParle’s memory of the call was corroborated by the Senate aide who was on the line.
Ignagni again says that she never said anything of the sort. “I’m very sure about having no discussions about executive compensation,” said Ignagni. “I’m not saying that they are lying. I’m saying that maybe they are mistaken in confusing me with some other person in our industry. But I very clear about what I raised and what I didn’t.”
There was one other element of contention. DeParle said that in their three conversations during the week of Oct. 5, Ignagni brought up the issue of her CEOs being unhappy, and of negative Wall Street analyst reviews of the Senate Finance Committee plan, multiple times. “She said her CEOs were really up in arms. They felt that they had been constructive,” DeParle remembers. “And I told her, ‘I think you have been constructive. I think you have worked to try to figure out how to get this done.’ She said that my guys feel like they have been vilified, and this is what we get, and it’s not a good result.”
Ignagni admits to repeatedly raising several issues of concern for the industry, including the many millions of Americans that would remain without insurance under the Senate Finance plan. But she says it was DeParle who raised the issue of Wall Street Analysts, not her. “Nancy Ann asked us to provide external validation of what we were seeing in the market and what the effects of the health reform legislation was and she asked specifically about analyst reports, which I provided,” said Ignagni.
Suffice it to say, the depth of the disagreement over basic facts point to the pool of distrust that has grown between Democrats and the insurance industry in just the last week. It’s one thing to have a public battle over the meaning of reform. It’s another thing when the major players in negotiations lose faith in each others ability to correctly remember basic conversations.