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January 15, 2016 at 07:51 AM
(Bloomberg) — America’s Health Insurance Plans (AHIP) is one of Washington’s most powerful lobby groups, spending millions of dollars a year to influence lawmakers, the White House and scores of state officials on the industry’s priorities.
Yet its latest fight isn’t in the halls of Congress, but inside its own headquarters. UnitedHealth Group Inc. (NYSE:UNH), the U.S.’s biggest health insurer, quit the group in June over a difference in strategy. Aetna Inc. (NYSE:AET), another giant that will grow even larger with its upcoming purchase of Humana Inc. (NYSE:HUM), left at the end of 2015. Together, the exiting insurers cover about one in four Americans.
“The departures of these two big members has been a blow to the industry’s ability to represent itself with one voice,” said Terry Holt, a Republican strategist who focuses on health care issues at HDMK.
The departures are also a challenge to the trade group’s new chief executive officer, Marilyn Tavenner. The former Obama administration official took over in August, and her Democratic background has little political overlap with some of AHIP’s biggest members. Now, she has to lure back the wayward insurers.
Win them back
“One of our primary goals is to make sure we meet them at their space and have them rejoin AHIP,” Tavenner said in an interview. “From my perspective, the door is open and we want them back, and both of them know that.”
She disputed the idea that she was too tied to Democrats, and said that she’s spent much of her career in private industry roles. “I think I’m probably seen as a pretty bipartisan person.”
AHIP is one of Washington’s biggest spenders, according to data from the Center for Responsive Politics. It spent $9.2 million on lobbying in 2014, the most recent year available, ranking it 36th out of 3,514 organizations. That total doesn’t include individual spending by companies — UnitedHealth, for example, spent $2.6 million on lobbying in 2014.
See also: Drugmakers turn up heat on insurers
Tensions and splits inside the lobbying group have been developing for years, said people familiar with its inner politics. AHIP is filled with companies who have very different businesses and policy needs. It contains health insurers large and small, including regional nonprofits and some of the biggest publicly traded companies in America.
Long tensions
Even within the large companies, there are splits. Humana focuses on Medicare, while Cigna Corp. (NYSE:CI) is weighted toward covering employees of businesses. The group’s board also includes Genworth Financial Inc. (NYSE:GNW), which sells life insurance and long-term care, and Principal Financial Group Inc. (NYSE:PFG), a life and retirement company that also has a disability-insurance business.
The tensions go back as far as the passage of the Patient Protection and Affordable Care Act (PPACA), or Obamacare, in 2010. The law overhauled the industry, creating new regulations and helping fund health coverage for millions of Americans.
See also: PPACA: The lobbying horse race
Less than a year after the law’s passage, the five biggest for-profit insurers, including Aetna, UnitedHealth and Humana, were meeting secretly in a “group of five,” disgruntled with AHIP’s direction, people familiar with the matter said at the time.
Lingering discontent
The large, publicly traded health plans have long felt that they deserved more of a say over AHIP’s strategy and priorities because of their size, according to people familiar with their thinking. The big plans tend to pay more in dues, even though they each get the same say on AHIP’s governance as the group’s smaller companies, according to public disclosures and Tavenner.
