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Thursday, January 14, 2010

Health Insurers Funded Chamber Attack Ads

By Peter H. Stone

Updated at 10:30 am 1/13/10

Just as dealings with the Obama administration and congressional Democrats soured last summer, six of the nation's biggest health insurers began quietly pumping big money into third-party television ads aimed at killing or significantly modifying the major health reform bills moving through Congress.

That money, between $10 million and $20 million, came from Aetna, Cigna, Humana, Kaiser Foundation Health Plans, UnitedHealth Group and Wellpoint, according to two health care lobbyists familiar with the transactions. The companies are all members of the powerful trade group America's Health Insurance Plans.

The funds were solicited by AHIP and funneled to the U.S. Chamber of Commerce to help underwrite tens of millions of dollars of television ads by two business coalitions set up and subsidized by the chamber. Each insurer kicked in at least $1 million and some gave multimillion-dollar donations.

"There's no question that AHIP has quietly solicited monies from their members which were funneled over to the chamber for their ads," said a source. The total donated by the health insurers, according to one estimate, was as much as one-quarter of the chamber's total health care advertising budget.

A spokesman for Kaiser said it contributed funds to AHIP last year for positive ads on health care reform, and that AHIP has told the insurer that none of its monies were sent to the chamber.

Last August was bruising for the health insurance industry: Obama and congressional leaders attacked its abuses and profits and AHIP President Karen Ignagni warned publicly that "the vilification strategy isn't going to get health reform passed."

In late October, Ignagni wrote in a letter to the Washington Post defending a health insurer-funded study critical of congressional cost estimates, "Let me be clear and direct, health plans continue to strongly support reform." However, by that time money was already flowing through AHIP to the chamber to fund its negative ads.

The fundraising started last September and continued through December using AHIP as a conduit to avoid a repeat of the political flak that hit the insurance industry after it famously ran its multimillion-dollar "Harry and Louise" ads to help kill health care reforms during the Clinton administration.

"AHIP wanted to do this through a third party because of what happened with the Harry and Louise ads," said a lobbying source. "The goal was to get a message out there to make sure the public understood the serious shortcomings of the legislative proposals."

Asked about the health-insurer funding for its ad blitz, the chamber's top lobbyist Bruce Josten said, "No comment. We never disclose funding or what we're going to do."
However, after the story hit the blogosphere Tuesday, Josten confirmed the money transfer from AHIP to several news outlets.

AHIP originally did not return several calls requesting comment for this story. It supplied a written statement Tuesday evening after the story broke. "Reform needs to make health care more affordable, particularly for small businesses that struggle to provide coverage to their employees. We share the very serious concerns employers have raised about provisions that will increase health care costs, including new premium taxes that will hit small businesses hard. So when the employer community--our customers--asked us to contribute to their campaign, we readily agreed."

Since last summer, the chamber has poured tens of millions of dollars into advertising by the two business coalitions that it helped assemble: the Campaign for Responsible Health Reform and Employers for a Healthy Economy.

In late October, the chamber helped cobble together a larger coalition, Employers for a Healthy Economy, which became the key advertising vehicle for attacking provisions in the House and Senate bills being developed. The newer coalition includes such business giants as the National Association of Manufacturers, the National Retail Federation and the National Association of Wholesaler-Distributors.

The ads sharply criticized the high costs of the separate bills, especially the House version. The commercials warned the legislation would raise taxes for Americans and hurt the economy as it tries to recover from the recession. And some chamber-financed commercials attacked setting up a government run plan to compete with private insurers -- a special sore point for the insurance industry -- which is part of the House measure.

The U.S. Chamber has spent approximately $70 million to $100 million on the advertising effort, according to lobbying sources. It's unclear whether the business lobby group went to AHIP with a request to help raise funds for its ad drives, or whether AHIP approached the chamber with an offer to hit up its member companies.

The House passed its health care reform measure in November; the Senate's didn't pass its version until December. Late last week, Employers for a Healthy Economy launched a new round of TV ads on national cable that are slated to run for a week. Sources say that the chamber-backed ads will likely continue as the two bills are combined in coming weeks.

"You don't quit. You fight this thing all the way," said Dirk Van Dongen, the president of the Wholesaler-Distributors.

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