The first time I remember speaking with Karen Ignagni was via a TV satellite, for a debate about health care policy on CNN. It was the summer of 2007, not long after the debut of Michael Moore's Sicko, and each of us was playing our usual role. Ignagni is the telegenic president of America's Health Insurance Plans (AHIP) and arguably Washington's most influential health-industry lobbyist. She was on the show to explain why her members' business practices weren't nearly as awful as the Michael Moore film suggested, and to assure Americans that AHIP would work to make coverage more affordable and accessible. My role, as the author of a new book critical of the insurance industry, was to remind viewers that Ignagni was full of it--that the insurance industry really did do everything it could to avoid covering sick people and to thwart efforts at reform. This was, after all, the same industry that gave us all "Harry and Louise." The discussion got a bit heated, as these things go; I basically accused Ignagni of lying when she said she wanted everybody to have access to insurance; and, by the end, Ignagni was (according to the cameraman) complaining that I'd landed a few low blows.
The second time I spoke with Ignagni was in person, at AHIP's Washington offices, earlier this year. This time, we were sitting just a few feet from each other, at a long conference table overlooking Pennsylvania Avenue. Ignagni appeared exactly as I'd seen her on television--thin with short, lightcolored hair.But this time her own communications people had been reaching out to me; and this time, her statements weren't nearly so predictable. When I asked my first question, Ignagni asked--very politely--if she could put off answering in order to provide me with some important background about AHIP's changing position on health reform. "People sent a strong message to us, that we needed to do more with respect to market rules and performance," Ignagni went on, "that came through loudly and clearly." And she said people were particularly concerned about having to pay disproportionate rates for having pre-existing medical conditions.
I was dubious. Would AHIP and its members give coverage to anybody willing to pay for it? "Yup." Would they provide "community rating," meaning everybody buying the same policy would pay the same price? "Yes." What about letting the government define a basic, minimum benefits package that all policies would have to include? "We're for that." And what about letting the government practice some kind of risk equalization--in effect, taking money away from insurers that cover mostly healthy beneficiaries and giving it to those that attract disproportionate numbers of unhealthy ones? "Yes, the Europeans do this. ... We think it has a great deal of merit."
Of course, her answers left out a lot of key details. She'd let the government define a set of minimum benefits, but would the benefits be sufficiently generous? Community rating usually includes some exceptions for smoking, geography, and sometimes age; what kinds of exceptions would she allow--and how much power to discriminate among customers would she want to preserve? People had told me that Ignagni was a master communicator: When challenged, they said, she deflected so delicately you didn't even notice that she was disagreeing. This turned out to be true. When I asked her about a proposed public insurance plan, into which people could enroll voluntarily, she spent several minutes charitably describing underlying motivations before reaffirming, gently, her opposition.
Still, something had changed. A few years ago, even these hedged policy commitments would have been largely unthinkable. Now, Ignagni and AHIP are doing more than just talking the talk. For the last two years, AHIP has been participating in ongoing, confidential discussions among health care interest groups representing everybody from the medical industry to consumer advocates. Convened in some cases by members of Congress, in other cases by the groups themselves, these discussions have brought together longtime adversaries to find common ground on reform. It was some of these discussions (organized, according to sources, by AHIP and the Service Employees International Union) that led to the meeting of industry groups, including AHIP, at the White House in May--and to the signing of a letter, in which the groups pledged to help the president reduce the cost of medicine.
Earlier this month, New York Times columnist Paul Krugman offered some advice to Democrats: "Don't trust the insurance industry." Like most longtime supporters of health care reform, that has been my position as well. But the things Ignagni is saying publicly--and the things her group is doing privately--are enough to make even this hardened skeptic wonder: Can we trust the insurance industry? Or, at least, can we work with it? To answer "yes" you don't have to believe that the industry has grown a conscience--merely that its self-interest has changed. And there's reason to think that it has.
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Very interesting reporting and analysis.
One important point is that the interests of the health insurers (this also goes for businesses more generally) are not necessarily the same.
Hillary Clinton recognized this in 1993-4, and tried, largely unsuccessfully, to take advantage of it.
Some insurers make much of their money processing paperwork, and they can perform that function on their own account or, potentially, doing contract work for governmental (or other quasi-public) payers (as well as for businesses that self-insure financially, but don't want to be burdened with all the paperwork internally). Others depend to a greater extent on exploiting the difference between pre ... view full comment
Very interesting reporting and analysis.
One important point is that the interests of the health insurers (this also goes for businesses more generally) are not necessarily the same.
Hillary Clinton recognized this in 1993-4, and tried, largely unsuccessfully, to take advantage of it.
Some insurers make much of their money processing paperwork, and they can perform that function on their own account or, potentially, doing contract work for governmental (or other quasi-public) payers (as well as for businesses that self-insure financially, but don't want to be burdened with all the paperwork internally). Others depend to a greater extent on exploiting the difference between premiums (and investment earnings on the float), which they seek to maximize, and payouts for medical care, which they seek to minimize (both by trying to exclude customers likely to be expensively sick and by seeking to deny claims and/or delay making payments).
It was largely the smaller companies that were more dependant on the later, and who would tend to be crushed by a public option. Hillary tried to split them off from the majors, who would, she hoped, be bought off by the lure of processing government paper. It was the smaller companies, recognizing they were at lethal risk, who gave birth to Harry and Louise. (One can tell a similar story about large industrial companies who already paid hefty health insurance premiums for their unionized work forces, and would not necessarily be disadvantaged by a government takeover of health care costs). Unfortunately, whether out of ideological or other concerns, the big players didn't stay bought off, and Hillarycare went down for the count.
I'd be interested in author Cohn's further thoughts on whether this dynamic is still in play, and how it is reflection in the evolution of Ignagni's organizational homes and policy positions. As we have seen, there continue to be diverse interests and complex organizational dynamics within the big organizational players, as well as among them.
I would also be cautious as to the loyalty of constituent businesses to stay with the (policy) positions of even so well-regarded a figure as Ignagni when their individual business prospects may be sacrificed in the service of other members of their trade organizations (let alone the public interest). That is, even if Ms Ignagni is fully sincere, it is not clear that (all of) her troops will follow and respect the commitments she appears to make on their behalf.
I think the Wise Bard has it correct. There are many interests in the Health Care system, for which Ignagni owes no allegiance to except the people that pay her.
The disturbing part of Mr. Cohn's reporting is that he wants to turn the debate into a morality play, as opposed to a competition of economic interests. If you want to use an insurance model, you must allow the underwriters to manage risk. Health insurers no more want to insure people with long-term illnesses than Auto insurers want to insure drunk drivers. If Mr. Cohn wanted to solve that narrow problem, he would look at ways of underwriting that specific risk pool instead of moralizing about the Insurance Industry.
I think the Wise Bard has it correct. There are many interests in the Health Care system, for which Ignagni owes no allegiance to except the people that pay her.
The disturbing part of Mr. Cohn's reporting is that he wants to turn the debate into a morality play, as opposed to a competition of economic interests. If you want to use an insurance model, you must allow the underwriters to manage risk. Health insurers no more want to insure people with long-term illnesses than Auto insurers want to insure drunk drivers. If Mr. Cohn wanted to solve that narrow problem, he would look at ways of underwriting that specific risk pool instead of moralizing about the Insurance Industry.
Make way for underinsurance for all. Just pay the damn premium, or else.
Make way for underinsurance for all. Just pay the damn premium, or else.
Reply to jbwinklhofer: The health reform debate IS a morality play, gawldarnit! Leading actors can smile and schmooz, yet be a villain. As for high drama--I enjoyed Michael Moore's take-down of Ignagni on Oprah.
Thanks to Jonathan for this overview of Ignagni's career which follows the historical time line of attempts at reform--and the powerful monied interests and strange bedfellows that have defeated most initiatives.
Unfortunately, Families USA has joined AHIP in its call for "universal coverage" and the public has been duped. The insurance companies want everyone covered, but covered by their profit-making policies. If Congress passes a Mass style universal mandate, we will see the insu ... view full comment
Reply to jbwinklhofer: The health reform debate IS a morality play, gawldarnit! Leading actors can smile and schmooz, yet be a villain. As for high drama--I enjoyed Michael Moore's take-down of Ignagni on Oprah.
Thanks to Jonathan for this overview of Ignagni's career which follows the historical time line of attempts at reform--and the powerful monied interests and strange bedfellows that have defeated most initiatives.
Unfortunately, Families USA has joined AHIP in its call for "universal coverage" and the public has been duped. The insurance companies want everyone covered, but covered by their profit-making policies. If Congress passes a Mass style universal mandate, we will see the insurers' profit-making market enlarged by the stoke of the President's pen.
We will all be delivered up to AHIP to cover as they see fit. If they win the mandate, the insurance juggernaut will resist all attempts at regulation. As bsemple says--make way for "underinsurance for all."
As a taxpayer, I'd be happy to pay for "expanded and improved" Medicare-for-all, a single payer system, but I sure as heck do not want to contribute to insurer profits and CEO salaries--including Karen Ignagni's.
As for trusting insurance company spokespersons--Did anyone see the latest congressional hearing on policy rescisions? I'm sure it's available online at C-SPAN.
While personalities and character development make for interesting stories, my own experience leads me to believe that the true character development story, if you care, is about someone, Ms. Ignagni, who was susceptible to earning a higher income by adopting her clients' positions. As for the issues that are not story driven but more people driven, the reality is that the cry against single-payer has resulted in representatives to Congress trying to re-jigger finances in a way that just won't pencil out easily. What pencils out is single-payer national health care. It eliminates huge and unnecessary salaries to health insurance industry executives, such as Ms. Ignagni, and spreads the he ... view full comment
While personalities and character development make for interesting stories, my own experience leads me to believe that the true character development story, if you care, is about someone, Ms. Ignagni, who was susceptible to earning a higher income by adopting her clients' positions. As for the issues that are not story driven but more people driven, the reality is that the cry against single-payer has resulted in representatives to Congress trying to re-jigger finances in a way that just won't pencil out easily. What pencils out is single-payer national health care. It eliminates huge and unnecessary salaries to health insurance industry executives, such as Ms. Ignagni, and spreads the health risk broadly. Rest assured that Ms. Ignagni's current position is identical to the spreadsheets that insurance industry financial analysts have been working on for years. It shows that requiring that everyone purchase health insurance from private insurers leads to higher and more consistent profits than having a smaller number of customers (both group and individual plans). That's why health insurance industry executives and their representatives earn the big bucks, because they're not stupid, but they are profit-driven, even on the backs of the terrible life stories of others who can't afford adequate medical care. Now that they've managed to buy their way out of the one approach that works world-wide, they can shoot down the other approaches as being "too expensive." But I have another idea: since the private insurance companies, like the banks, have failed, we need to nationalize them with everything in place. That way, a skilled manager can come in, use the system that's there missing nary a beat and lay off everyone we no longer need, like the group that earns its money doing recission work or Ms. Ignagni.
Wise Bard and jpwinklhofer - excellent points.
Wise Bard and jpwinklhofer - excellent points.
jpwinklhofer fails to understand that the whole point of reform (and the only hope for any meaningful change) is to realize that health care is in fact more than a competition of economic interests. Of course one must be realistic about the economic interests involved, but the proximal cause of conservatives' functional stupidity on this issue is their inability to accept the obvious fact that free market ideas fail in health care, and that health care is more than an economic phenomenon. There is in fact a significant moral dimension.
jpwinklhofer fails to understand that the whole point of reform (and the only hope for any meaningful change) is to realize that health care is in fact more than a competition of economic interests. Of course one must be realistic about the economic interests involved, but the proximal cause of conservatives' functional stupidity on this issue is their inability to accept the obvious fact that free market ideas fail in health care, and that health care is more than an economic phenomenon. There is in fact a significant moral dimension.
Wise Bard-
You are indeed wise. The initial draft of my article discussed divisions within the insurance industry extensively. But it was too much material, given that the article had to fit within a confined space for print. It was also a bit confusing, although that may have been my failure as a writer.
In any event, we took that out. But I was already planning on discussing these very issues in a follow-up discussion, over at The Treatment -- the health care blog here at tnr.com. I hope to write something next week.
Wise Bard-
You are indeed wise. The initial draft of my article discussed divisions within the insurance industry extensively. But it was too much material, given that the article had to fit within a confined space for print. It was also a bit confusing, although that may have been my failure as a writer.
In any event, we took that out. But I was already planning on discussing these very issues in a follow-up discussion, over at The Treatment -- the health care blog here at tnr.com. I hope to write something next week.
I think a key observation is the idea of embracing regulation with the idea that this will allow a chance to get around it. This is the ongoing philosophy of almost all industries in dealing with Washington. It allows a good cover from the public dismay (after all we are regulated") and allows the congressional members good coverage to explain their actions to voters and over time they will "adjust" the regulations just as the banking Industry did.
The only answer is a very competitive public choice and if private Insurers are as good as they claim they should be able to compete with better service,outcomes etc. Competition is the driving force and whether it is from a public or privat ... view full comment
I think a key observation is the idea of embracing regulation with the idea that this will allow a chance to get around it. This is the ongoing philosophy of almost all industries in dealing with Washington. It allows a good cover from the public dismay (after all we are regulated") and allows the congressional members good coverage to explain their actions to voters and over time they will "adjust" the regulations just as the banking Industry did.
The only answer is a very competitive public choice and if private Insurers are as good as they claim they should be able to compete with better service,outcomes etc. Competition is the driving force and whether it is from a public or private source it should be a top priority.
As a Physician I quit taking Blue Cross and Blue Shield and some others since they were impossible to deal with and changed the rules every few months, The most consistent and reliable provider was Medicare.
Why Is The Most Powerful Health Care Lobbyist Playing Nice?...
Because they've figured out it's the Medical Insurance Industry's turn at the trough, of course.
Obama handed over the writing of the stimulus bill to congress, where members helped themselves to the pork barrel.
Obama bailed out Wall Street, and allowed the executives to keep their ill-gotten gains and carry on business as usual.
Obama let the banking industry write his regulation reform bill.
Now, Obama has said that single payer medicare is off the table, and is letting the Medical Insurance industry write his health 'reform' bill. HMO's will still ration care and keep the profits for themselves. Co-payment amounts will continue to ... view full comment
Why Is The Most Powerful Health Care Lobbyist Playing Nice?...
Because they've figured out it's the Medical Insurance Industry's turn at the trough, of course.
Obama handed over the writing of the stimulus bill to congress, where members helped themselves to the pork barrel.
Obama bailed out Wall Street, and allowed the executives to keep their ill-gotten gains and carry on business as usual.
Obama let the banking industry write his regulation reform bill.
Now, Obama has said that single payer medicare is off the table, and is letting the Medical Insurance industry write his health 'reform' bill. HMO's will still ration care and keep the profits for themselves. Co-payment amounts will continue to rise, and lifetime caps will still be in place. The insurance industry will still practice screening to be sure most of their clients are healthy, but they'll just be a bit more sneaky than they already are. And the race will be on between insurance providers to sign up the greatest number of young healthy government subsidized clients, and they'll be laughing all the way to the bank.
The Chicago Way, that is.