The powerful trade group that lobbies on behalf of the health insurance industry, America’s Health Insurance Plans, has much to celebrate as it holds its national health policy conference at the Ritz-Carlton in Washington this week.
Among other changes long sought by the industry, the draft Republican proposal for a health care overhaul released on Monday would allow insurers to charge older American more for their premiums and rewrite tax law to make it easier for insurance firms to pay executives even higher pay.
Not surprisingly, one of the AHIP conference’s keynote speakers on Thursday will be Congressman Kevin Brady, the Texas Republican who chairs the House Ways and Means Committee, which starts marking up the bill on Wednesday morning.
The trade group represents the largest health insurance companies in America, including Cigna, Humana, Kaiser, Blue Shield of California, and Anthem.
Rep. Kevin Brady, R-Texas, is scheduled to appear before America’s Health Insurance Plans
The new Republican legislation, called the American Health Care Act, includes sweeping changes sought by health insurance companies.
The proposal, for instance, shifts the age ratio for premiums, allowing insurance companies to charge older Americans up to five times as much as young people. The AARP, in a letter to legislators, notes that the new 5:1 ratio could cost the average 64-year-old on a silver plan an additional $2,100 per year. Under the Affordable Care Act, the premium cap was 3:1.
AHIP specifically recommended a move to the 5:1 ratio.
The GOP legislation would replace Obamacare’s individual mandate — the requirement that all Americans purchase health insurance — with an idea that similarly penalizes people who go without health coverage. But under the Republican legislation, the penalty will be paid to insurance companies instead of the federal government. Insurers, under the bill, are granted the ability to require a premium surcharge of 30 percent for any individual who loses coverage for a period of at least two months.
The proposal also includes a direct handout to the chief executives of health insurance companies. The Affordable Care Act contained a provision that limited health insurance firms to deducting only $500,000 in taxes of the pay of executives and other employees. The provision was designed to rein in out-of-control health insurance executive compensation, and to encourage insurance firms to pay for health care instead of bonuses for company leadership.
Before the Affordable Care Act, insurance company executives had little incentive not to steer company revenue to executive leadership. UnitedHealth Group chief executive Stephen Hemsley received $109 million in pay in 2009 alone.
The Republican health legislation repeals the Affordable Care Act’s cap. “The Republican plan calls for allowing insurers to write off as a business expense the entire amount of their executives’ salaries on their taxes, and not just the first $500,000, as is the case now under the Affordable Care Act,” CNBC reported. Taking away the limit on corporate pay tax deductions will not only encourage higher executive pay, but will mean companies will pay way less in taxes. The Institute for Policy Studies estimated that the cap generated $72 million in additional revenue in 2014.
AHIP has written to Congress to complain about the cap on deducting executive compensation. The Ways and Means Committee draft of the Republican health overhaul provides for the elimination of the cap on the first page of the bill.
Finally, the legislation creates a backhanded financial giveaway to health insurance companies by nearly doubling the amount individuals and families may save in a tax-free health savings accounts — an idea originally designed by insurance companies as a source of additional income. The accounts are used to pay for out-of-pocket expenses, such as deductibles. But as Los Angeles Times columnist Michael Hiltzik has explained, HSAs primarily benefit wealthy individuals, by shielding their income from taxation, while the accounts themselves are often managed by insurance companies, allowing them to collect revenue by charging fees.
The health insurance lobby has long played a pivotal role in American health care. In 1993, AHIP’s predecessor, the Health Insurance Association of America, helped sink President Bill Clinton’s health reform proposal through a national advertising campaign called “Harry and Louise.”
In 2009, then-AHIP president Karen Ignagni promised President Barack Obama that her group would not repeat its behavior from the early ’90s, telling an audience at the White House that her industry would work towards a positive solution. “You have our commitment to play, to contribute and to help pass health care reform this year,” Ignagni declared.
But the pledge was quietly broken. While Democrats debated the Affordable Care Act, AHIP secretly funneled at least $86.2 million to a third-party business group to air relentless negative campaign commercials and lobby against the plan. Inadvertent filings later revealed that insurance company Aetna also provided at least $7 million in covert funds to groups airing anti-health reform ads.
AHIP, meanwhile, has consistently enjoyed friendly relations with Capitol Hill.
New York Rep. Joe Crowley, the former chair of the conservative New Democrat Coalition and current chair of the House Democratic caucus, is slated to speak before AHIP on Wednesday. AHIP’s political action committee sponsored a $1,000 per person fundraiser for House Majority Whip Steve Scalise, who is currently working to win over GOP support for the draft bill, shortly after the inauguration. AHIP’s largest disclosed donation in 2017 has gone to Rep. Kevin Brady, the chairman helping to lead the Republican health repeal effort this week.
Top photo: House Speaker Paul Ryan seated to the left of Ways and Means Committee Chair Kevin Brady.
These men are not your friends. Beware.
“The trade group represents the largest health insurance companies in America”
The trade group represents something not even necessary that being health insurance companies, which are nothing more than bloodsucking middlemen.
If Paul Ryan is centered in a photo representing an article relating to legislation two thing are always going to be certain, firstly that his greed obsessed psychopathic funders are being further enriched and empowered, while secondly the common man is being totally and immorally screwed.
Amazing. To recap: Obama created a gift to the insurance companies, and then Republicans went and asked the insurance companies what else they’d like to see enacted, and then complied.
This is business as usual inside the Beltway. Trump is too inattentive to understand what scumbag Paul Ryan is constructing.
Jose, yep! :(P
The AHCA will kill people.
People are stupid.
Is “insurance” the same thing as “health care”???
Nope.
Insurance companies sell incomprehensible pieces of paper written in jibberish…. for $1000 per page per year….
And then, when it comes time to “collect”…. you have to sue them from your death bed while the hospital files liens against your property.
The “nature” of an insurance contract is that the insurer and the insuree are ADVERSARIES.
The difference between the insurer and the insuree???? The insurer always gets your money, first.
I have read, by people in the healthcare industry, 85% of people would be better off pocketing their insurance premiums (health savings acct). 10% of subscribers break even with insurance. The other 5% suck away all the healthcare dollars.
Maybe TI could do an informed analysis?
Here’s a quick analysis: Health should not be treated as merchandise in a civilized society.
Amen
Congratulations, you just explained how insurance works. People take out policies against the possibility that they’re in the unlucky minority who face some kind of disaster – and get to “suck away all the dollars”. Scandalous.
I’m in that boat now.
Insurance is just a membership card that gets a foot in the door. Insurance paid $20 , (maybe) negotiated prices down a bit (though I had to make calls too) , & my bills are about 3.5x the supposed deductible, somehow. (Deductible :$4000 |Bills : ~$14,400)
It’s amazing how the insurance companies have subtracted themselves from the public discourse around Obamacare.
These companies get paid to do nothing. They don’t provide any actual medical care or service. They were solely created to control health care costs. Instead, health care costs have risen dramatically, as these paper pushers wedge themselves in between patients and actual health care providers.
I don’t think Health care Insurance companies were created to control health care costs. If I recall correctly, they were first introduced to employers as a way to offer benefits (as a substitute for pay) to workers, The appeal was that the “benefit” would be seen by the workers as being of greater value than it actually was, thereby saving the employers money.
It was always a scam, in other words, and has only evolved to get scammier.
These days, one of the more egregious parts of the scam is efforts to deny service to those who have paid into the scam. Layers and layers of bureaucracy require endless useless documentation in an effort to dissuade people from utilizing health care services, or, if they persist, from actually paying the bill.
“Insurers, under the bill, are granted the ability to require a premium surcharge of 30 percent for any individual who loses coverage for a period of at least two months.” ~ Can you provide any more clarity on this? Or information? This is incredible.
Especially paying them rather than having it affect taxes.
I was thinking of dropping my insurance, so I could pay my medical bills. Insurance got me in the door, but didn’t pay for anything, except $10ea, on 2 bottles of antibiotic eye drops, despite the bills being ~3.5x the deductible. Why bother?
Now? Paying >$1200?/yr for nothing, TO THEM!!! vs >$3700/yr for ??? Thanks, for nothing, Ryan et al. >|<