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

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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.


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