Top Insurance Lobbyist Says Industry Won’t Point Fingers, Then Blames Hospitals For Higher Premiums

Cross-posted from the Wonk Room

During the AHIP’s insurance conference on Tuesday, AHIP President and CEO Karen Ignagni claimed that health insurers were “very concerned about insurance premiumsand the trajectory” of health care spending and promised that the industry remained committed to controlling costs. “We understand that begins also with us. So we are fully committed to cost containment,” Ignagni said.

But just several hours later, on Fox Business’ Neil Cavuto, Ignagni blamed hospitals, doctors, and the pharmaceutical industry for rising costs. Ignangni also falsely claimed that insurers cannot negotiate prices with providers:

IGNAGNI AT 10 AM: “So we are fully committed to cost containment, not finger pointing to other sectors.”

IGNAGNI AT 6PM: “Health care costs are surging. We have our health plans Neil, that are getting quotes from hospitals of up to, they want 40% increases, we see pharmaceutical prices surging. We see tests increasing, exploding…we’ve had consolidation of the hospital arena.”

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Ignagni’s hypocrisy exemplifies the industry’s two-pronged strategy of publicly supporting reform while secretly funding efforts to undermine it. Similarly, while the industry’s “charm campaign” has argued that insurers would “lead the charge” on supporting insurance reforms and controlling costs, insurers have continued rescinding policies and increase rates. In August, the Energy and Commerce Subcommittee on Oversight and Investigations investigated insurance practices and concluded that far from “leading the charge” on reform, Assurant Health, UnitedHealth Group, and WellPoint have “continued to rescinded policies for almost 20,000 individual insurance policyholders” and avoided paying more than $300 million in medical claims” over the last five years.

Ignagni isn’t entirely wrong in arguing that large provider groups use their market leverage to raise reimbursement rates and increase health care costs. But her claim that insurers can’t lower these rates through negotiation is wrong. In fact, at the insurers’ own conference, Mark Miller — executive director of the Medicare Payment Advisory Commission (MedPAC) — took insurers to task for overpaying hospitals and doctors and criticized the industry for failing to use their market power (in areas of high market concentration) to secure lower reimbursement rates.


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