Departures test clout of insurance lobby

Departures test clout of insurance lobby
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America’s Health Insurance Plans (AHIP) has been the voice of the health insurance industry for years, but questions have been swirling about whether the association carries the same political clout it once did.

Three of the country’s five largest insurance companies have left the group, and the industry has lost some key policy battles with the Trump administration and the Republican-led Congress.

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“If I market myself as the leading trade association representing insurers, the departure of some of your key companies probably puts a ding in that,” an industry lobbyist said.

UnitedHealth left AHIP in June 2015, followed by Aetna a little over six months later, in early 2016. Earlier this month, Humana also announced it was leaving the group, followed by CareFirst.

UnitedHealth said it felt AHIP no longer represented the company’s best interests, but AHIP noted that Aetna and Humana said their respective departures were business decisions, rather than due to disagreements over policy.

Health care sources told The Hill the departures stemmed from concerns among some of the large, for-profit companies that AHIP’s focus had moved too heavily toward smaller, regional insurers and nonprofit carriers.

“Clearly, some of the larger insurers are reviewing their D.C. operations and feel they can better represent themselves on their own,” an industry lobbyist said. “United started the trend, and they felt they could pursue their interests … without any sort of requirement they make policy compromises to boil it down to the lowest common denominator.”

“The evolution of health-care reform, the consolidations, all of that has changed the model to the point that AHIP doesn’t reflect the policy goals of the large companies,” said Bill Hoagland, a senior vice president of the Bipartisan Policy Center and a former executive at Cigna.

An industry source noted the policies AHIP pursues are similar to the policies advocated by Aetna, Humana and UnitedHealth.

AHIP still counts large commercial insurers like Anthem and Cigna among its members, and the group gained 12 new members this year.

The organization also turned a $1.2 million profit in 2016, compared to a $2.3 million loss in 2015.

Kristine Grow, a spokeswoman for AHIP, said the organization recognizes the changes in the industry and is adapting to them.

“Working with different voices is nothing new to AHIP, and change is something that we’re very comfortable with,” Grow said. “AHIP has been evolving with the changing needs of the industry. We don’t see it as a fractured landscape. We’re all committed to the same vision.”

The insurance industry has been instrumental in influencing the direction of past health-care reform efforts. In 1993, President Clinton’s health-care overhaul effort collapsed when insurers helped torpedo it.   

The Obama administration was able to bring AHIP on board early in the debate about passing the Affordable Care Act, and though they were conflicted about some of its key provisions, the law passed and the group has become one the law’s outspoken defenders.

Industry sources and experts argued that without the major players of Aetna, UnitedHealth and Humana, AHIP’s voice has been diminished.

“The strength of AHIP was that it represented the buying power and the delivery force in health care,” a health-care lobbyist said. “With the exit of so many dominant forces in the health insurance market, AHIP’s voice is undoubtedly quieter.”

“If you can’t walk in the room and say you represent 90 percent of the market, you’ve taken a hit on the PR side, and your clout in Congress,” another lobbyist added.

That second lobbyist, who is familiar with the workings of the trade group, said AHIP is still trying to balance the needs of all its disparate members.

“They struggle with a lot of nuances between their members day in and day out,” the lobbyist said.

An industry source said AHIP’s leadership is aware of the challenges and has set up a governance structure to make sure all of its members are heard.

Other sources stressed that even though it no longer represents some of the largest players in the market, AHIP still plays an important role for members that don’t have the resources to mount campaigns in Washington.

Independent insurance consultant Bob Laszewski said part of the frustration the large companies have with AHIP is that they have the same influence as the smaller insurers in the group, even though they pay more in dues.

“It’s a very difficult task for an organization like AHIP to be effective for everyone,” Laszewski said.

Grow said AHIP’s membership is diverse and expressed confidence that the organization can serve of all its members.

“We have been looking at health care as a broader issue,” Grow said, adding that AHIP President and CEO Marilyn Tavenner has a range of experience beyond just insurance: She was a certified nurse; she ran the Centers for Medicare and Medicaid Services under President Obama; and she previously served as an executive of a hospital system.

“We are looking ahead to the future, and we feel like we can add a lot of value to the industry,” Grow said.

Other analysts said they aren’t surprised the trade group has lost large members, given that the insurance industry is becoming fragmented, with companies pursuing mega-mergers and acquisitions.

CVS is attempting to acquire Aetna, for example, after Aetna tried and failed to acquire Humana last year. A proposed merger between Anthem and Cigna failed, but UnitedHealth bought health-care provider DaVita.

CVS is a member of AHIP through its Medicare prescription drug plans.

“Associations look for common platforms and common messaging, and that doesn’t always work where you have highly competitive, super national players emerging,” said Sam Glick, a partner in Oliver Wyman’s health and life sciences practice.

“The whole industry … is adapting more slowly than the players in the industry want it to,” Glick said.

The insurance industry at large has had mixed results in battles with the Trump administration.

The most recent government funding bill gave insurers two big wins by suspending a tax on health insurance for 2019 and delaying the “Cadillac” tax on high-cost employer-sponsored insurance plans until 2022.

But the White House has also canceled ObamaCare’s cost-sharing reduction payments, which had helped insurers reduce deductibles for low-income people.

In addition, the GOP tax law enacted in December repealed the ObamaCare requirement that every person purchase health insurance or pay a fine — a provision insurers insisted was necessary to prevent people from waiting until they are sick to buy insurance.

Grow said AHIP has notched several regulatory wins during the Trump administration, particularly when it comes to Medicare Advantage.

Aetna, UnitedHealth and Humana are three of the largest Medicare Advantage (MA) companies, but Grow said AHIP still represents more than 80 MA providers.

AHIP has been pushing for changes to improve the quality of MA plans while pushing the administration not to cut payment rates to seniors.

Grow noted that nearly 350 members of Congress signed on to a letter last year urging the administration to “protect Medicare Advantage.”

The Trump administration appears to be listening. The 2018 payment policy was industry-friendly, as it included regulatory flexibility and did not cut payments. Grow said AHIP has been ramping up its Medicare Advantage efforts this year with a new campaign.

“They have some dents in the armor, but they’re still standing,” one lobbyist said of AHIP’s interactions with the administration.