Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Life Health > Health Insurance

Powerful health insurance lobby’s new goal: win back members

Your article was successfully shared with the contacts you provided.

(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.

When UnitedHealth quit AHIP, the company said its interests were “no longer best represented by AHIP,” and that AHIP’s strategy didn’t match its own. “AHIP has to respond to its needs and interest of many members, which understandably resulted in a more limited and complicated advocacy focus,” UnitedHealth said at the time.

AHIP’s board is now weighing adjustments to both how AHIP is run and how dues are set, Tavenner said. Still, it’ll have to find a balance that keeps its roughly 200 members happy.

“I’m going to do everything I can to win them back,” Tavenner said of Aetna and UnitedHealth. “Part of that is about strategy, part of that is about input. The board here recognizes that and wants to work with them as well.”

Tavenner said lawmakers are still turning to AHIP for the industry’s position. Among the group’s recent wins was a one-year suspension of a tax on health insurers that was enacted as part of PPACA.

More of a say

Mark Bertolini, Aetna’s CEO, said at an investor conference this week that Aetna might be willing to rejoin AHIP if the group gives his insurer more of a say, according to a report by Inside Health Policy.

Financially, the departures will make at least a small dent in AHIP’s $64.5 million in revenue, which comes from member dues and fees from conferences and education, according to public records. Aetna accounted for about $1.1 million in dues, and UnitedHealth a similar amount. The money goes to pay for lobbying, staff salaries, advertising and events.

Anthem Inc. (NYSE:ANTM) and Cigna — No. 2 and No. 4 in the industry by membership, respectively — both said they find membership in AHIP to be valuable. “An industry that can work through policy issues and speak with a unified voice is a stronger industry,” Anthem said in a statement.

It’s not unusual for there to be discord when big companies, and egos, come together to try to bend lawmakers’ ears in Washington. But companies usually realize they’re better served by working together, said Dan Mendelson, president of Washington health-consulting firm Avalere Health LLC. He thinks UnitedHealth and Aetna will eventually come back.

“When a member of Congress is fashioning legislation, they’re not going to go to every company in the industry,” Mendelson said. “They’re going to need to come back because there needs to be one consistent voice.”

See also: 

Blues’ Lobbying Spending Keep Washington in the Black

Insurers Spend Big To Sway Health Reform: Report


Have you followed us on Facebook?


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.