What’s More Powerful Than Politics? Profit — at Least for Health Insurers

While partisans can afford to dig in on Obamacare, many insurance companies just want the law to work.

This December 2, 2013 photo shows a woman reading the HealthCare.gov insurance marketplace internet site in Washington, D.C.
National Journal
Michael Catalini
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Michael Catalini
Dec. 3, 2013, 4 p.m.

Con­gres­sion­al Re­pub­lic­ans have re­lent­lessly at­tacked Obama­care. The White House has been equally staunch in its de­fense. Yet des­pite the polit­ic­al en­trench­ment char­ac­ter­iz­ing the health care de­bate, one group is quietly tack­ing to­ward a more prac­tic­al solu­tion.

In­sur­ance com­pan­ies are try­ing to en­sure that the law works.

While few will spec­u­late on how they’d re­act if the Af­ford­able Care Act’s troubles were to con­tin­ue, in­surers — some of whom op­posed pas­sage of the law — say they’re work­ing closely with the White House and ex­ec­ut­ive-branch agen­cies to make sure the prob­lems that plagued the law’s first few months don’t fur­ther hamper en­roll­ment.

Robert Zirkel­bach, a spokes­man for the trade group Amer­ica’s Health In­sur­ance Plans, said the group’s mem­bers are reg­u­larly provid­ing tech­nic­al feed­back to the ad­min­is­tra­tion.

While the in­sur­ance in­dustry is not mono­lith­ic — sev­er­al com­pan­ies, for ex­ample, have op­ted out of state ex­changes — most in­surers have a stake in mak­ing sure the le­gis­la­tion works.

From their point of view, the gov­ern­ment is a busi­ness part­ner, which ex­plains both their softly worded cri­ti­cisms and their be­hind-the-scenes ef­forts to get the ex­changes func­tion­ing.

“The in­sur­ance in­dustry is in a bit of an ab­us­ive, code­pend­ent re­la­tion­ship,” said Tom Miller, a res­id­ent fel­low and health in­sur­ance ex­pert at the Amer­ic­an En­ter­prise In­sti­tute. “They can’t step out too far.”

In­surers could cri­ti­cize Obama­care more force­fully, out­side ob­serv­ers say, but that could risk ali­en­at­ing the ad­min­is­tra­tion. To re­main on the side­lines would mean ced­ing a say in how the law op­er­ates.

“I kind of wish there was a deep­er con­spir­acy,” Miller said. “But the bot­tom line is that they want to stay in busi­ness.”

Polit­ic­ally, the law has be­come a lead weight for Demo­crats, with Re­pub­lic­ans re­lent­lessly ham­mer­ing the woe­ful rol­lout. The Af­ford­able Care Act is par­tic­u­larly troub­ling for vul­ner­able Sen­ate Demo­crats, who are stress­ing their at­tempts to fix it le­gis­lat­ively. A pack of Demo­crat­ic law­makers, in­clud­ing Sen. Mary Landrieu of Louisi­ana, have pro­posed le­gis­la­tion aimed at al­low­ing Amer­ic­ans whose plans were can­celed to keep them.

But in­surers by and large op­pose those fixes be­cause rates for 2014 have already been set and restor­ing can­celed plans is easi­er said than done. Zirkel­bach, for in­stance, said those kinds of pro­pos­als amount to “chan­ging the rules in the middle of the game,” and AHIP would not sup­port Landrieu’s pro­pos­al.

Therein lies the in­surers’ lever­age, say health policy ex­perts. The White House can­not af­ford to “throw them over­board,” Miller said, be­cause it needs their help with the web­site. In­surers have been for­ward about this point in par­tic­u­lar.

“In ad­di­tion to fix­ing the tech­nic­al prob­lems with Health­Care.gov, the sig­ni­fic­ant “˜back-end’ is­sues must also be re­solved to en­sure that cov­er­age can be­gin on Jan. 1, 2014,” AHIP Pres­id­ent and CEO Kar­en Ig­nagni said re­cently in a state­ment.

The ad­min­is­tra­tion has three months to demon­strate to in­surers that the Af­ford­able Care Act is suc­ceed­ing, ac­cord­ing to Ed Haislmaier, a seni­or re­search fel­low at the Her­it­age Found­a­tion’s Cen­ter for Health Policy Stud­ies. He also ar­gues that there are bell­weth­er in­surers to watch.

Well­mark, a Blue Cross Blue Shield sub­si­di­ary in Iowa and South Dakota, is not par­ti­cip­at­ing in the Obama­care ex­changes in 2014, but plans to of­fer cov­er­age in 2015. An im­port­ant in­dic­at­or of how well the law is do­ing, Haislmaier said, would be if Well­mark re­vises its 2015 plans.

Mean­while, ob­serv­ers ex­pect in­surers to co­oper­ate with the White House on set­ting up the ex­changes.

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