The health insurance industry's opposition to Clinton's healthcare reform

¶ … Lobbying of the Government by Health Insurance Association of America (HIAA} the body of this paper is not to exceed 4 (four) pages.

Health Insurance Association of America HIAA: Lobbying efforts

Health Insurance Association of America HIAA: Lobbying efforts

Economic interests of the Health Insurance Association of America (HIAA)

Ordinary citizens may not be familiar with the Health Insurance Association of America

(HIAA) but they are familiar with Harry and Louise. Harry and Louise are HIAA's creation, the fictional protagonists of a $14 million advertising campaign orchestrated by the health insurance lobbying group to rally public as well as Congressional support against President Clinton's attempt to reform the nation's health system (Tarbell 2009). Today, administrative health insurance costs represent 10-20 cents of every dollar spent on healthcare in the United States (Hilzenrath 2009, p.1)

Ironically, Clinton's insurance proposal would have been beneficial for insurers in some respects. Although health insurance companies "would not have been able to charge people more because of their health conditions…they could have charged higher rates based on age. In exchange, Congress would have required employers to offer insurance to their workers; this would have guaranteed that insurers would have a broader population among which to spread costs" as even healthy individuals would have had to buy coverage from insurance companies (Adams 2009, p.1). "From the perspective of health plans, when you have a mandate for insurance, there isn't any need to charge individuals higher rates or deny them coverage if they have pre-existing conditions…if more healthy people are required to join the pool of people with insurance, then insurers don't have to work as hard to attract healthy, low-cost patients to help pay for the care of the sick" (Adams 2009, p.1). HIAA seemed more reflexively than logically opposed to the relatively modest Clinton reforms. However, the fear was that government oversight and regulation would compromise industry profits -- and consumers were encouraged to fear that 'the government' would choose their doctors, although under most insurance plans today, company bureaucrats limit healthcare consumer's choice.

HIAA has been accused of being overly involved in the machinations of politics at the expense of the public health. There can be no denying the 'revolving door' nature of its leadership. During the Harry and Louise campaign, which accused Congress of 'choosing' doctors for patients, the group's president was former Representative Bill Gradison (R-Ohio). HIAA only pulled its Harry and Louise ads in 1994 at the request of Dan Rostenkowski, an Illinois Democrat who was then chairman of the House Ways and Means Committee and a friend of Gradison. "HIAA opened talks with lawmakers to see if they could reach a deal" but ultimately the deal fell through (Adams 2009, p.1).

Given the large political campaign contributions made by the health insurance industry to Congress, combined with the presence of politicians on its governing board, HIAA could be said to represent three core special interests: health insurance companies; individuals who are happy with their health insurance plans and fear a public option would require their care to be rationed; and members of Congress who support the healthcare insurance industry and receive contributions and other favors from the industry (such as jobs upon their retirement from public office).

Political incentives used by the HIAA

Since the Harry and Louise advertising campaign, HIPAA has become even more politically powerful. In 2003, members of the Health Insurance Association of America (HIAA) and another lobbying group, American Association of Health Plans (AAHP) voted to merge their organizations. The umbrella organization represents insurance companies that provide coverage for more than 200 million Americans. The conglomerate organization is now known America's Health Insurance Plans (AHIP) (Pisano 2003). The lobbying group's increased strength has made it even more powerful as an industry actor.

Once again, in the current healthcare debate, AHIP appears to be cherry-picking its facts. Karen Ignagni, AHIP's president asserts that 77% of all Americans are satisfied with their health insurance coverage. However, the same June survey by the New York Times and CBS News cited by Ignagni also found that 72% of all Americans support the creation of a universal public option of insurance coverage. The public option is opposed by AHIP. Significantly, those who described their health as "excellent -- people who presumably had relatively little experience pursuing medical care or submitting claims -- were almost twice as likely as those in good, fair or poor health to rate their private health insurance as excellent" (Hilzenrath 2009, p1.).

By cleverly spinning such poll results, AHIP has been able to frighten even some moderate and conservative Democrats about their ability to be reelected. Republicans have tried to play a populist 'card' by crowing that their opposition to the Obama Administration's proposed reforms is the people's will. This has become a self-fulfilling prophesy. The public, told that they do not support healthcare reform, has begun to perceive the current bill as a product of meddlesome government.

Ethical Dilemmas

The dirty little secret about healthcare is that rationing is inevitable, no matter what system is adopted. Individuals with excellent coverage may get unnecessary tests; others have no coverage at all. "Economists generally agree that if costs are to be brought under control, someone must say no to care that doctors propose and patients demand. So far, that role has fallen primarily to insurers. Private insurers have effectively engaged in rationing, so they're doing the dirty work" rather than government (Hilzenrath 2009,p.1) America remains unique amongst all of the industrialized democracies in that it allows healthcare to be a commodity (Andre & Velasquez 2010). For insurers, this has been a profitable bargain. It has been a deadly bargain for Americans who are too wealthy or young to qualify for government programs, yet who cannot obtain healthcare from their employers.