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Health Insurers Attack Public Option, Cuts

The health insurance industry, which had been taking a relatively tempered approach to health care legislation, has stepped up its opposition to the overhaul efforts as it has become clear that the final product will not be to its liking.

The industry’s major advocate in Washington, D.C., America’s Health Insurance Plans, has started running television spots in 10 states, including the home state of Senate Majority Leader Harry Reid (D-Nev.), warning senior citizens that their benefits could be slashed.

Reid, of course, made it clear this week that the Senate bill would include a public insurance option — something the industry vehemently opposes.

AHIP blasted Reid’s decision.

“A new government-run plan would underpay doctors and hospitals rather than driving real reforms that bring down costs and improve quality,” AHIP President Karen Ignagni said in a statement.

AHIP released a study, prior to the vote on the legislation by the Senate Finance Committee, that warned that premiums would rise, in part, because of a lack of tough penalties for those who failed to meet the new mandate to sign up for health care plans.

AHIP spokesman Robert Zirkelbach said the health insurance industry would provide data in the coming weeks to underscore its views on the legislation that is expected to come up in both chambers.

“We’re going to continue talking to the American people,” he said. Zirkelbach also said the association plans to continue the TV spots, which include close-ups of anguished older people and claims that “Congress is proposing over $100 billion in cuts to Medicare Advantage.” The ads, which are part of a seven-figure buy, began running in the past two weeks.

Along with Nevada, the industry is also on the air in states with large numbers of Medicare Advantage beneficiaries, including New York, Pennsylvania, North Carolina and Indiana.

The media buyer for the health insurance spots is National Media. One of the partners in that firm is Alex Castellanos, a high-profile GOP media consultant whose portfolio includes top-drawer Republican clients, including George W. Bush’s 2004 presidential campaign. This summer, Castellanos sent a memo to GOP health care advocates outlining how the party should approach the debate with the Democrats. The memo stressed that the key message should be to “slow down the Obama experiment with our health care.”

The health insurance industry is experienced in using paid media to shape public perceptions. In 1994, a predecessor group to AHIP helped sink President Bill Clinton’s ambitious proposal for universal health insurance with the now-famous “Harry and Louise” ad campaign that featured an average suburban American couple discussing their qualms over the health care proposal.

During the current push for health care reform, the health insurance association had, until recently, refrained from running tough ads.

Even so, President Barack Obama and Speaker Nancy Pelosi (D-Calif.) have lambasted the health insurance industry for trying to undermine health care reform, particularly through grass-roots operations, including those at town hall events this summer.

Craig Holman, a lobbyist for Public Citizen, a liberal advocacy group, predicted that now that the public option is likely to be part of both the House and Senate versions, a number of industries will step up their lobbying against the plan.

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