Insurers vs. Dems: Battle over AHIP report leads to 'grudge match'

An industry-sponsored report forecasting soaring health insurance prices as a result of reform plans ignited a fight between insurers and Democrats, and doused a fragile truce between top insurance lobbyist Karen Ignagni and White House health adviser Nancy-Ann DeParle, TIME reports. After a years-long relationship and more-than-weekly phone calls despite tensions over reform plans, the recent episode "shattered the thin trust between the Administration and the insurance lobby."

During an Oct. 6 phone call, DeParle and a Senate aide who was also on the call say Ignagni misled them by denying that the negative report - now debunked as a one-sided, misleading and exaggerated reading of the Senate Finance Committee bill - would soon be released. DeParle recalled Ignagni saying, "No, we are miles away from putting out a report," TIME says.

"The dustup marks the end of the controversial White House strategy of keeping all the powerful industries playing nice during the months-long period of bill-drafting. But the insurance lobby's hard-line tactics may give President Obama and his aides a convenient foil just when critics on their left flank are mobilizing for more-dramatic reforms" (Scherer and Newton-Small, 10/15).

Indeed, within hours after the report was released, "there were already indications that insurers' attacks could backfire, and on Thursday Speaker of the House Nancy Pelosi left little doubt that Democrats are not only feeling more confident about reform, but are ready to make insurers pay for their sudden shift," TIME reports in another story. Pelosi could adopt a "windfall profits tax" in the House version of the bill that could extract $40 billion from insurers. She has also backed Senate Democrat's plans to repeal a decades-old antitrust exemption for the industry. "[T]he insurers seem to have done nothing so much as galvanize the often fractious Democrats" (Newton-Small, 10/16).

---

This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.