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GOP Getting Infusion of Contributions from Health Insurers

Source: Chicago Tribune

Posted on 05 Oct 2010

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The health insurance industry is pouring money into Republican campaigns in hopes of scaling back regulations recently passed. 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 since January.

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

The largest insurers also are paying hundreds of thousands of dollars to lobbyists with close ties to key Republican lawmakers who could be shaping 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."

The insurance industry, attracted by the prospect of millions of new customers as a result of the coverage mandate, initially backed President Barack Obama's campaign to overhaul the nation's health care system. And insurers scored a key victory when Democrats abandoned plans to create a new government insurance plan, or public option.

But insurers are increasingly balking at myriad new directives in the health care law.

Among other things, it 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 also will get new rights to appeal denied claims and win new access to preventive care without being asked for co-pays.

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

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

Insurers also are 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.

Karen Ignagni, America's Health Insurance Plans president and one of the industry's lead Washington lobbyists, said several of these new requirements will exacerbate already skyrocketing health care 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 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. That requirement may make insurance more expensive for young people even as it restrains premiums for older people.

Now, the industry is looking to Republicans for more relief.

That is a delicate task at a time when many GOP leaders have promised to repeal the law, starting with the unpopular mandate that will require Americans to get health insurance starting in 2014.

Insurers and independent health care experts see the requirement as critical to controlling costs for everyone by spreading risk. The health care 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 firm PricewaterhouseCoopers.

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."

When Republicans controlled Congress, they greatly expanded Medicare's use of commercial insurance companies to administer benefits through Medicare Advantage Plans.

These plans, which often offer more benefits than traditional Medicare, have been very profitable for insurers, though they cost the government more money. The new health care law will scale back federal subsidies to these plans.

With the help of Republican legislation, insurers have also increasingly shifted costs to consumers through high-deductible plans coupled with health savings accounts, which also are more profitable for insurers.

And Republicans have pushed to allow insurance companies to sell their plans across state lines, thus avoiding state regulations. Many states require insurers to cover dozens of benefits, such as cancer screenings and home health care, protections that consumer groups say are critical but insurers say push up costs.

The GOP's health care agenda historically meant hefty checks from the insurance industry and a clear edge over Democrats.

That changed last year when insurers spread their political donations more equitably. But after a bruising battle with Democrats over the health overhaul, the industry is rallying behind its traditional GOP allies.

"We generally support candidates whose views align with our business and health care 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 this year for proposing huge rate hikes in California, has given nearly nine times as much to Republicans this year.

WellPoint's lobbying team includes a former senior aide to Wyoming Sen. Mike Enzi, who would head the Senate health committee should Republicans take the Senate. 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 also would play an important role in modifying the health care law.

Cigna's team includes the former Republican chairman of the House Energy and Commerce Committee, another key health care panel.

Ignagni said she wouldn't speculate about what Republicans would do if they retake the House and Senate in November.

But she acknowledged the industry's interest in the GOP. America's Health Insurance Plans has given the party twice as much as it has given Democrats this year.

"The numbers speak for themselves," Ignagni said.