Insurers and HMOs Spent $769 Million to Block Health Reform

source http://www.politicalaffairs.net/article/articleview/9540/

Companies Now Focus on Influencing State Insurance Commissioners

Original source: Health Care for America Now

Washington, DC – The HMO and insurance industries have spent a breathtaking $768,864,642 since 2007 on federal lobbying to influence public policy and elected officials, according to Health Care for America Now (HCAN), the 1,000-member coalition that led the successful fight for health reform. The pace of spending in 2010 hasn't let up since last year's national debate over health reform, as the insurance companies now are trying to undermine the health reform law with intense pressure on state officials to water down the federal provisions and interfere with their implementation. The lobbying spending data was collected by the Center for Responsive Politics.

"The insurance industry mounted a massive campaign to defeat health care reform and maintain their stranglehold on our health care," said HCAN Executive Director Ethan Rome. "Now the insurance companies are trying to undermine the new law so they can continue profiteering and denying care while they keep giving their CEOs jaw-dropping pay packages."

The top five health insurance companies reported a record $12.2 billion in net earnings last year, and the top executives at 10 for-profit health insurers have pocketed nearly $1 billion in compensation in the last decade. As a group they received a 167 percent pay raise in 2009 while average American workers saw wages grow about 2 percent.

Led by the Washington-based trade group America's Health Insurance Plans, the $892 billion-a-year health insurance industry laundered $20 million through the U.S. Chamber of Commerce this year to blanket the airwaves with anti-reform TV ads. The Chamber has announced a $75 million campaign against pro-reform members of Congress running for re-election in November. Insurers also are reportedly considering spending another $20 million to create their own front group to attack reform supporters and elect pro-industry lawmakers. Now the insurance companies are coordinating a lobbying assault on regulators.

This weekend, more than 1,000 insurance lobbyists and executives are expected to converge in Seattle to pressure the National Association of Insurance Commissioners (NAIC) to undercut important new rules intended to control costs and make health insurance more affordable for families and businesses. The new health reform law includes a provision (medical-loss ratio) that requires insurers to spend on patient care at least 80 percent of health plan premiums collected from individuals and small employers and 85 percent of premiums paid by large employers. The insurance companies are trying to protect their profits and divert premium dollars away from patient care by having non-medical costs, such as lobbying, profits, executive pay and administration, defined as "medical" under this new regulation.

In a letter to the NAIC president in July, Senator Jay Rockefeller of West Virginia, chairman of the Senate Commerce Committee, urged the insurance commissioners not to succumb to the pressure applied by the industry.

"It is clear that health insurance companies are sparing no expense to weaken this new law and the protection it promises to America's consumers," Rockefeller said. "Health insurance companies and their allies have been furiously lobbying the NAIC to write the medical-loss ratio definitions in a way that will allow them to continue doing business as they did before the passage of health reform. The resources health insurance companies are throwing into their effort to weaken the medical-loss ratio appear almost limitless."

Unlike federal lobbying disclosure rules, health insurers aren't required to reveal what they are spending to influence state insurance commissioners, but the numbers are high. In New York alone, health insurers have spent $10,602,387 on lobbying since 2007, according to an HCAN review of data maintained by the New York State Commission on Public Integrity. No figures are readily available on how much money health insurers spend on lobbying in 49 other state capitals.

This gap in reporting is troubling because this category of state officials—insurance commissioners—has never been subjected to a nationally coordinated pressure campaign to use their state authority to block implementation of consumer protections enacted by Congress. The NAIC is due to make its recommendations soon—perhaps even this weekend—to the U.S. Health and Human Services Department.

"The insurance companies are spending an unprecedented amount of money to stampede regulators into gutting critical consumer protections before they even take effect," said Rome. "These massive lobbying expenditures must be disclosed. The public has a right to know how much the insurance companies are spending to protect their excessive profits and outrageous CEO pay."

The health insurance industry wants to expand the definition of allowable medical expenses to include costs that are not directly related to the delivery of care and have not historically been classified as medical. Instead of reducing costs and improving the efficiency of their operations, they simply want to change how certain expenses are classified so they don't really have to alter their business practices to make their products more valuable. Already, WellPoint, the nation's largest private health insurer by enrollment and operator of Blue Cross plans in 14 states, has reclassified $500 million in administrative costs as medical expenses in their communications with investors—a unilateral move to create a new status quo. The stakes in this battle are huge. If the new law had been on the books in 2009, the six largest for-profit health insurance companies would have been required to give $1.9 billion back to health plan members for that year alone under the rebate rules enacted by Congress.

"The MLR standards in the Affordable Care Act are critical to curbing the worst of the health insurance industry's consumer abuses, controlling rising premium costs, increasing the value of premiums paid by private and public customers, and reining in the profiteering of health insurance companies," Rome said. "If the lobbyists are thwarted and rules governing medical-loss ratios, rate review and other consumer protections are implemented as intended, the health reform law will hold accountable an industry that abuses millions of customers when they need health benefits the most."