Top health insurance lobbyist fires back at the White House

The head of a powerful health insurance group said her industry is addressing executive compensation issues, firing back at the White House for its recent report that highlighted the salaries of senior executives.

Karen Ignagni, president and CEO of America's Health Insurance Plans, said the profits of her sector pale in comparison to others.

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In the wake of politically unpopular health premium increases in a handful of states, the Obama administration issued a report last month noting that the CEOs of America's five largest insurers were each compensated up to $24 million in 2008.

Pressed on the issue in an interview taped for C-SPAN's "Newsmakers," Ignagni said, "This issue of executive compensation is a very important question for boards of directors in every stakeholder community and every part of our economy. And in fact, we are having those discussions. Boards of directors are increasingly through proxy kinds of initiatives in their own discussions are increasingly demonstrating that the compensation is aligned with productivity and performance. ... I think this is a question that ought to be raised across the economy."

The administration's report stated, "Last year, as working families struggled with rising health care costs and a recession, the five largest health insurance companies -- WellPoint, UnitedHealthGroup, Cigna, Aetna, and Humana -- took in combined profits of $12.2 billion, up 56 percent over 2008."

Ignagni took issue with the presentation of that number, asserting that few "go the next step" and analyze profit margins. Citing Fortune magazine, Ignagni said her industry margins are in the two to three percent range while other health industries have margins between 15 and 25 percent.

She suggested she and her member companies are ready to look "at ours versus others in the healthcare stakeholder community...We see all these questions as fair game."

A year ago, Ignagni told President Barack Obama that AHIP was ready to work with the White House. At the time, she said, "You have our commitment to play to contribute and to help pass healthcare reform this year." Obama, appearing surprised, responded, "That's good news."

Since then, the White House-AHIP relationship has deteriorated. Meanwhile, the administration struck deals with other industries on health reform, including the pharmaceutical sector. Last summer, Speaker Nancy Pelosi (D-Calif.) labeled the health insurance industry "villains."

In the C-SPAN interview, Ignagni suggested that -- contrary to GOP claims -- she believes the individual mandate in healthcare reform is constitutional. However, she criticized Congress for not working on a bipartisan basis and claimed the Democrats' legislation does not adequately address healthcare costs.

"It's an issue members of Congress can't ignore," Ignagni said, adding the common refrain from lawmakers is, "It's too hard."


"Newsmakers" will be aired on C-SPAN Sunday at 10 a.m. and 6 p.m.