After a year when insurers’ high-profile pullouts and critiques of the marketplaces set up by the Affordable Care Act became fuel for Republican arguments the law was about to explode, the industry at large has been restrained recently, neither strongly supporting nor opposing the bill.
In part, this reflects a strategy for a volatile political environment. Health care groups that have other items coming up on their agenda may be hesitant to burn bridges by antagonizing Republicans by being openly strident, several health care lobbyists said.
But it also reflects a larger splintering within the health-care industry, in which businesses are being guided by their direct financial interests. While the bill may represent an existential threat to some insurers, others see it as neutral.
“There’s no question the constituencies are fractured,” said Sheila P. Burke, a strategic adviser at the law firm Baker Donelson.
The bill grants insurers many of the short-term measures they have been seeking to make the individual marketplaces more stable and a tax repeal worth $145 billion over a decade. Drug and medical device companies would get major tax repeals. The trade groups representing those industries issued measured statements instead of an endorsement, narrowly supporting or disagreeing with specific elements of the bill.
In contrast, the hospital industry, physician groups and patient advocacy groups have all come out in strong, united opposition to the bill. Hospitals, often among the largest employers in a region, are a powerful industry, but they were vocally supportive of the Affordable Care Act, a position that did not endear them to Republican lawmakers.
Adding to that, the bill’s harshest effects will be borne by the poor, a group without deep-pocketed organizations to represent their interests.
“There really is no not-for-profit that really speaks up on behalf of low-income patients” akin to the AARP, said J. Mario Molina, an outspoken critic of the Republican health-care bill who was recently ousted from running the insurer, Molina Healthcare. “You look at what’s happening — hospitals don’t like this bill, physicians’ organizations don’t like this bill, the cancer society doesn’t like this bill, but there’s no one that can unify them and lead the charge.”
When the Affordable Care Act was being implemented, many health-care industries stood to benefit due to coverage expansion that was likely to bring them more insured customers. But the Senate bill is a cut, and industries — even sub-sectors of industries — are affected in different ways.
Health insurance is a diverse business, made up of for-profits, non-profits, community plans and national companies.
Some are big players in the Medicaid space, while others have little exposure to cuts in that area. Many of the big companies had already exited the Affordable Care Act markets that will be reshaped by the law. The industry's largest trade organization, which must balance the interests of a variety of members, has expressed concern about deep cuts to Medicaid. But plans that are heavily dependent on that business have been far more direct, launching highly critical attacks of the bill on an individual basis.
That is far different than the past, where insurers have unified to wage war, launching the “Harry and Louise” ads to bring down health reform under the Clinton administration or even the aggressive opposition insurers marshaled against the Affordable Care Act toward the end.
“I did say to my board, I thought that we, as a plan, needed to be more vocal than our trade association, so that our 2 million members would know we were their advocates and our thousands of providers would know we are their advocates,” said John Baackes, chief executive of L.A. Care Health Plan, which has 2 million Medicaid members.
The hospital industry has mobilized, bringing hundreds of hospital representatives to Capitol Hill and flooding Senate offices with calls from employees, Rick Pollack, president of the American Hospital Association said in a conference call Tuesday.
That pressure is also being exerted locally.
Joseph Letnaunchyn, president of the West Virginia Hospital Association said that he brought his board’s leadership to a meeting with Sen. Shelley Moore Capito (R-W.V.) two days before the bill was released, to air their concerns about a variety of issues, including the loss in Medicaid coverage. He sent a follow-up letter on Monday, reiterating their concerns.
But one reason for the lackluster response is that many industries are looking beyond the health-care bill. There’s the prospect of tax reform, various legislative issues for each industry and the simple fact that they will continue to have to work closely with the government, a major health-care payer.
“I think first and foremost, they have to think about if they want to play scorched-earth lobbying when they have a lot of things they need to do in Washington,” said Kim Monk, a managing director at Capital Alpha Partners, a firm that provides political research for investors. “They want to be careful what they do here — pick their battles.”
Take the medical device industry, which would unequivocally benefit from the bill, but nonetheless hasn’t come out in support of it. Greg Crist, a spokesman for AdvaMed, the medical device lobby, said that the group two weeks ago hosted its largest fly-in in years, bringing 54 chief executives to Capitol Hill. Their priorities were getting rid of the device tax that was in the Affordable Care Act, and a completely separate issue — pending medical device user-fee legislation.
The organization put out a statement applauding the inclusion of the tax repeal in the Senate bill but did not weigh in on the rest. Crist said that was in part because the majority of their patients — people who need pacemakers, stents or knee implants — are elderly and covered by a different government program, Medicare.