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Health Insurers Bristle at Tough Rhetoric But Stick to Reform Path

Source: Washington Post

Posted on 04 Aug 2009

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As Congress heads to its August recess at the end of the week, one of the big questions hanging over the health care debate is: Will the insurance industry hold its fire?

For months, the industry has decided that it is better off trying to work with the Obama administration and congressional leaders to shape health reform legislation to its liking than launching an all-out effort to block reform. The thinking was that the industry could live with some tougher regulations in exchange for the new customers that would be provided by an effort to broaden coverage -- as long as reform stopped short of a public insurance option, which the industry is dead-set against.

But last week, the landscape shifted. Worried about whether the industry's message was getting through, President Obama began referring to "health insurance reform" instead of "health care reform" on the theory that voters might respond more positively to proposals targeting the unpopular industry than they had to more abstract talk about making the health care system more cost-efficient. Congressional Democrats followed his lead with a vengeance, with House Speaker Nancy Pelosi declaring that the insurance industry leaders were the real "villains" in the debate and that they had been "immoral all along." Would the industry stand for this rhetorical turn, figuring that it was just political posturing -- or would it fight back during the crucial August recess?

In an interview Friday with The Atlantic's Marc Ambinder, the president of America's Insurance Health Plans (AHIP), Karen Ignagni, sounded a sanguine note while hinting that there might be a limit to the industry's tolerance.

"We understand that this has been a political strategy, and we think that it's been an unfortunate decision because the American people need to understand that if we are going to pass legislation in the fall, there is strong consensus around insurance industry reform.... As a result of the decision to find the target and go to war, this whole consensus is being obscured," she said.

"We're going to continue to work with the White House and continue to work with members of Congress.... The strategy is being adopted in the Congress and elsewhere is the same old politics. Find a target, go to work. The problems are much too great for that old style strategy to be followed. At the same time, we're going comment on where we think the rhetoric is going."

More blunt in an interview today was a member of AHIP's board of directors, James Roosevelt Jr., the grandson of Franklin D. Roosevelt who runs the Tufts Health Plan in Massachusetts and is a longtime Democratic National Committee official. He said he had no problem with reform proponents shifting the framing of the debate to "health insurance reform." But, he added, the increasingly harsh anti-industry bent to the rhetoric was "offensive."

"I like the focus on health insurance as opposed to trying to accomplish everything at once in trying to reorder health care -- this is the great trap that Democrats fall into, that they try to change the system as a whole, and then people get scared and it falls to pieces," he said. "But the part about calling insurers villains and morally bankrupt I find offensive and ineffective. The polling says we're an easy target, and it's easy to see the political motivation, that to get this to the goal line you need to create a villain. But I do worry that that does ramp up the opposition as much as it ramps up support."

Were his colleagues on AHIP discussing jettisoning their collaborative stance for full-bore opposition? "What I see is people being very irritated but so far staying committed to universal coverage and the things you have to do to get there," he said.

The industry is holding a conference call tomorrow to discuss its strategy.