Aetna departure a major blow for insurers group

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Aetna, one of the nation’s largest health insurers, announced Tuesday that it is leaving the insurer trade group America’s Health Insurance Plans, dealing a blow to a powerful Washington lobbying group. 

“Aetna has decided not to renew our AHIP membership for 2016,” said Aetna spokeswoman Cynthia Michener. “We will continue to partner with groups that are working, as we are, toward expanding access to high-quality, affordable health care.”

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Aetna is the third-largest health insurance company in the United States and is attempting to merge with Humana, another one of the top five for-profit insurers. 

The move comes after another large health insurer, UnitedHealthcare, left AHIP in June, saying its interests and those of its customers were “no longer best represented by AHIP.”

Both then and now, AHIP defended itself as a powerful force. 

“AHIP’s successful advocacy record speaks for itself,” Marilyn Tavenner, AHIP president and CEO, said in a statement on Tuesday. “Our members depend on AHIP to advance their key priorities, to strengthen the public-private programs that provide coverage for millions of Americans, and to deliver solutions that improve access to high quality, affordable care for consumers.”

UnitedHealthcare’s move in June came one month after AHIP’s CEO, Karen Ignagni, announced that she was leaving to run the insurer EmblemHealth. UnitedHealthcare is the largest health insurer in the United States.

Ignagni, who led the insurers group for 22 years, was regarded as a very effective leader and was a major force during the crafting of the Affordable Care Act, or ObamaCare, in 2009 and 2010. 

Since then, though, AHIP has gained another major player in Tavenner as CEO. She recently stepped down as the administrator of the Centers for Medicare and Medicaid Services (CMS), the federal agency that oversees ObamaCare. 

There have been a number of other changes in the wake of Ignagni’s departure,
including announcements from two other top executives that they would be leaving by the end of the year. 

Mary Beth Donahue had served as an executive vice president at the organization for more than a decade, and Dan Durham, who was in charge of policy and regulatory affairs, also worked as the interim CEO while it picked a new leader. It has not yet been announced where the duo has gone, however.

A shake-up has been long brewing, a number of healthcare sources told The Hill in August, when rumors began swirling about an impending Aetna defection.

Although nothing was certain at the time, some of the large, for-profit companies were concerned that the group’s focus had been placed too heavily on smaller, regional insurers and the nonprofits, according to lobbyists.

Those misgivings manifested most recently during the debate over ObamaCare when the so-called “big five” — UnitedHealthcare, Anthem, Aetna, Humana and Cigna — formed their own informal coalition.

Another healthcare executive, who asked for anonymity in order to speak freely, said that, for some, “there’s a sense that AHIP has become a one-trick pony for the Obama administration,” referring to the goal of advancing ObamaCare.

With the country’s first- and third-largest health insurers gone from its ranks, the insurance group could see problems arise from the divisions between large and small companies.

AHIP told The Hill that it does not disclose individual member dues but said its board of directors began a process last year to, among other things, reform its dues structure.

The organization differs from some other industry groups in that a significant portion of its budget is derived from areas other than dues, drawing revenue from  conferences, educational programs and other events.

For the defectors — UnitedHealthcare and Aetna — leaving the group poses its own risks, some on K Street who spoke with The Hill on Tuesday said.

“If their advocacy program runs afoul of an elected official, they are going to do damage to their access on the Hill but also damages to their brand,” said an insurance industry source who asked not to be identified in order to speak freely.

Though Aetna said in its statement that it would be continuing to partner “with groups that are working ... toward expanding access to high-quality, affordable healthcare,” it would not comment further on which groups those are. 

AHIP on Tuesday said it is stronger than it has ever been and touted a range of policy developments in 2015 as lobbying wins. It pointed to Congress’s one-year suspension of ObamaCare’s health insurance tax, a part of the year-end tax and spending deal. 

Insurers, however, were unable to secure guaranteed payments if they experience a shortfall under ObamaCare’s “risk corridor” program despite strong opposition from Republicans. 

The group also pointed to its work preventing cuts to the Medicare Advantage program, where the government contracts with private insurers as an alternative to traditional Medicare. Fighting another round of cuts under ObamaCare in 2016 is a major priority. 

The group will also be dealing with the administration on its regulation of insurers on the ObamaCare marketplaces and will continue its push for action on high drug prices.

This story was updated at 8:10 p.m.