IBJNews

Execs from WellPoint, peers meet to hone health-law lobby

Back to TopCommentsE-mailPrintBookmark and Share

Top executives from WellPoint Inc. and UnitedHealth Group Inc. are meeting almost monthly with their counterparts from Aetna Inc., Cigna Corp. and Humana Inc. in an informal lobbying alliance aimed at blunting parts of the health-care law, say sources with knowledge of the sessions.

The arrangement began about six months ago, growing out of unrest over decisions by America’s Health Insurance Plans, or AHIP, the Washington-based lobbyist that also serves hundreds of small plans and nonprofit insurers, said the sources who requested anonymity because they aren’t authorized to speak publicly. The effort started with meetings between the companies’ Washington lobbyists, and now includes at least three committees that get together weekly.

This group “was not, probably, adequately represented” by AHIP, said Ana Gupte, an analyst for Sanford C. Bernstein & Co. in New York. As a result, “they had to do their own lobbying,” she said in a telephone interview.

The unofficial alliance, pulling together the nation’s five largest commercial health insurers, may hire a director and formally organize in the next two months, the sources said. The companies also may also try to ally with large employers to rally around mutual health-care interests, they said.

The five for-profit companies control 39 percent of the commercial, Medicare and Medicaid health-insurance market with 106 million customers projected this year, according to data compiled by Bloomberg. Indianapolis-based WellPoint is the largest health insurer by enrollment.

Although the group’s members don’t plan to leave AHIP, according to the sources, they are joining to lobby on issues where AHIP won’t or can’t support positions that differ from those held by the trade group’s other members. AHIP represents almost 1,300 companies that cover 200 million Americans, according to its website.

WellPoint CEO Angela Braly and Minnesota-based UnitedHealth's chief executive, Stephen J. Hemsley, have been directly involved in the monthly meetings, the sources said. They have been joined by top officials from Hartford, Conn.-based Aetna, Philadelphia-based Cigna and Humana, of Louisville, Ky.

Spokesmen at all five companies declined to comment on the sessions or didn’t return e-mail and telephone inquiries.

One distinction between the interests of smaller state-based or regional plans and the five largest commercial companies involves a provision in the health-care law signed in March that dictates the percentage of premium revenue to be spent on medical care.

State regulators charged with drafting the rule have required insurers to meet the 80 percent spending threshold in each state, a decision Washington-based AHIP supported in a letter dated May 20, 2010. WellPoint and Aetna, in letters to the regulators written in May and July, argued that the spending be averaged nationally across all their premiums.

Karen Ignani, AHIP’s chief executive officer, declined to answer questions about the split.

“Any trade association deals with competitive issues all the time,” Ignani said in an interview. “It’s palace intrigue, and I’ve said all I’m going to say on that.”

The overhaul also outlines how health plans will be treated in markets, called exchanges, that will be started in 2014 to sell coverage, and includes a $60 billion tax on insurers that begins in 2014 and will be passed on to consumers, Gupte said.

The U.S. Department of Health and Human Services will be setting rules for the exchanges, where insurers will sell coverage to consumers with federal tax credits. They will outline criteria the companies must meet to be allowed into the markets and determine what types of plans can be sold.

The five companies began meeting in July. The issues discussed then included how to improve their image after more than a year of public criticism from the administration of President Barack Obama and its congressional allies, according to the people with knowledge of the discussions.

The insurers called in public relations firms, including Washington-based APCO Worldwide, and Weber Shandwick, a unit of Interpublic Group of Cos. Inc. in New York, to solicit proposals for campaigns. The companies haven’t decided whether to move ahead, said two people with knowledge of those meetings.

The group has also hired the law firm Alston & Bird LLP to advise them on antitrust matters, according to two of the people familiar with the arrangement. Barbara Bryant, a spokeswoman for Atlanta-based Alston, said in a voicemail that the firm wouldn’t comment on clients.

Further discussions among the group of five have centered on the extent to which it may become involved in politics, say two of the people familiar with the discussions.

When the group considered creating a $20 million election fund before the midterm elections, some companies wanted to steer money to opponents of lawmakers who had been critical of the industry. At least one company opposed coordinated political donations, said two people with knowledge of the talks.

The political effort never moved beyond those discussions, according to the two people familiar with discussions.

“When you have companies that have different operating environments, at some point they’ll go do their own thing,” said Les Funtleyder, a health-care portfolio manager for New York-based Miller Tabak & Co.

“Everybody’s demands are different based on their size and their market share and their tax status, so it doesn’t surprise me that the publics might want to do their own thing,” Funtleyder said in a telephone interview.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Liberals do not understand that marriage is not about a law or a right ... it is a rite of religous faith. Liberals want "legal" recognition of their homosexual relationship ... which is OK by me ... but it will never be classified as a marriage because marriage is a relationship between a man and a woman. You can gain / obtain legal recognition / status ... but most people will not acknowledge that 2 people of the same sex are married. It's not really possible as long as marriage is defined as one man and one woman.

  2. That second phrase, "...nor make or enforce any law which shall abridge the privileges or immunitites of citizens..." is the one. If you can't understand that you lack a fundamental understanding of the Constitution and I can't help you. You're blind with prejudice.

  3. Why do you conservatives always go to the marrying father/daughter, man/animal thing? And why should I keep my sexuality to myself? I see straights kissy facing in public all the time.

  4. I just read the XIV Amendment ... I read where no State shall deprive any person of life, liberty, or property ... nor make or enforce any law which shall abridge the privileges or immunitites of citizens ... I didn't see anything in it regarding the re-definition of marriage.

  5. I worked for Community Health Network and the reason that senior leadership left is because they were not in agreement with the way the hospital was being ran, how employees were being treated, and most of all how the focus on patient care was nothing more than a poster to stand behind. Hiring these analyst to come out and tell people who have done the job for years that it is all being done wrong now...hint, hint, get rid of employees by calling it "restructuring" is a cheap and easy way out of taking ownership. Indiana is an "at-will" state, so there doesn't have to be a "reason" for dismissal of employment. I have seen former employees that went through this process lose their homes, cars, faith...it is very disturbing. The patient's as well have seen less than disireable care. It all comes full circle.

ADVERTISEMENT