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Health Insurers Lead Lobbying Spending

Source: A.M. Best

Posted on 06 Oct 2011

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Health insurers continue to lead lobbying spending in Washington, while the property/casualty side and life insurers are investing in influencing Dodd-Frank implementation.

Total industry spending on federal lobbying stood at $77.3 million for the first six months of 2011, on par with the $157.9 million reported for all of 2010, according to data from the independent Center for Responsive Politics and the U.S. Senate Office of Public Records.

The top spenders are Blue Cross and Blue Shield entities (combined $6.3 million spent in 2011) and America's Health Insurance Plans ($4.5 million).

This spending follows the pattern set in 2009, at the beginning of debate over what became the Affordable Care Act.

Keeping insurers' voices prominent on Capitol Hill is vital as the Obama administration continues to roll out rules and regulations for putting the health reform law into effect. Insurers, along with agent and broker groups, are advocating a rollback of at least part of medical loss ratio rules. Regulations for minimum benefits and state-based insurance exchanges remain in development. AHIP is also pushing for a reversal of cuts to Medicare Advantage subsidies.

Eighteen months after the law's passage, "We're trying to mitigate the unintended consequences as reforms are implemented," AHIP spokesman Robert Zirkelbach said.

The three main property/casualty trade associations — the American Insurance Association, the National Association of Mutual Insurance Companies and the Property Casualty Insurers Association of America — have spent a combined $2.9 million to date in 2011 (they reported $6.4 million for 2010).

As health insurers are with health reform, property/casualty insurers are with the Dodd-Frank financial reform law: minding the details of implementation for potential land mines.

"The focus going forward is obviously on the rule-making process," said AIA spokesman Blain Rethmeier said.

A top priority for the sector, and for life insurers, is to avoid strong regulatory oversight proposed for nonbank entities deemed to be systemically important financial institutions. The Dodd-Frank-established Financial Stability Oversight Council is currently debating what criteria will merit a SIFI designation and whether many insurers would qualify. Industry representatives have been shuttling between both end of Pennsylvania Avenue, expressing industry concerns before the House and Senate and the Treasury Department.

The insurance industry has faced a greater challenge in Washington, D.C., the last few years than ever in history," said Jimi Grande, NAMIC's senior vice president of federal and political affairs.

While playing defense on Dodd-Frank, NAMIC ($630,000 in reported lobbying spending for 2011) has gone on the offensive in other areas, Grande said. The association has fought for market-based reforms and other changes to the National Flood Insurance Program, which is up for renewal, as well as strict building codes in catastrophe-related legislation.

For life insurers, tax and retirement-planning issues have also been in the forefront. The American Council of Life Insurers and other groups have testified in favor of policies to promote greater annuity use. ACLI has fought annually against proposed changes to corporate-owned life insurance policies and dividends received deductions. The Obama administration recently estimated $11 billion savings if tax changes opposed by the industry went into effect.

"Our education efforts are focused on getting members of Congress to understand that proposals to reduce the deficit must recognize the sound public policy behind helping Americans plan for their financial futures and the role that life insurers play in those plans," ACLI spokesman Whit Cornman said.