Face-Off: Sebelius Confronts Insurers

Mar 10, 2010 — Politico

Carrie Budoff Brown

Health and Human Services Secretary Kathleen Sebelius confronted insurance executives at their annual conference Wednesday — challenging them to divert millions in anti-reform advertising dollars toward cutting premiums and reciting a litany of insurance horror stories, to a decidedly chilly response.

The head of the insurance lobby made clear later that she’s heard enough industry-bashing out of the White House.

"There has been a relentless attack on the men and women who work in our industry," said Karen Ignagni, head of America’s Health Insurance Plans. "But the politics as usual in Washington won't address the underlying affordability issues, so we have to move beyond the politics of vilification and get to the process of problem solving."

It was a snapshot of the biggest fight in health reform, inside a ballroom at the Ritz-Carlton, with one of President Barack Obama’s top lieutenants giving the insurance industry an earful about how it should stop fighting reform and get on board, or risk seeing its industry laid low.

Sebelius said she did not show up to “vilify” insurers and even said, “It’s not too late to work on this issue together.” But she spent much of her 20-minute speech recounting the tales of Americans who have lost their coverage because of skyrocketing insurance prices and reminded the audience that major insurers have poured millions of dollars into ad campaigns against the bill.

“I know a number of you think we should take it slowly, or break it apart or start over again, bit by bit,” Sebelius said. “How many years in a row can we have the same discussion over and over again? How many years can we look at a marketplace that is frankly getting more segmented and more difficult? And how much pressure can we put on the remaining customers before the business model collapses under its own weight?”

She received only brief applause at the close of her speech. Sebelius didn’t take questions and immediately exited the ballroom for an event at the White House.

Ignagni spoke with reporters immediately after the remarks, saying the Democratic campaign against the industry needed to stop. Obama on Monday, for instance, turned up the rhetoric against health insurers, saying the system can’t work better for companies than for the American people.

Ignagni said the industry is committed to reform, but the current legislation won’t cut costs as much as Democrats promise.

“Our concerns are very simple and straightforward: We have been concerned that the legislation will make the system more expensive, not more affordable,” Ignagni said.

Sebelius called on the industry to provide transparency to consumers about what business factors contribute to rising premium costs and urged the audience to work with the administration to pass a bill.

“I would also like to ask you to think about doing what AHIP had talked about doing last March, to work with us and listen to Americans who say the system isn’t working and help us pass comprehensive health care reform,” Sebelius said.

She added that the resistance to the plan might be justified if the “president or Congress was proposing something radically different than [what] you put forward yourself,” but they did not.

Ignagni said her group would take up the secretary’s offer to work with the administration in strengthening the cost control provisions in the bill.

"The secretary invited us this morning to submit to her and to work with the administration on specific strategies," Ignagni said. "We do not believe all the strategies have been included. We will take that challenge very seriously, and very, very quickly the secretary will hear from us."