Insurers trot out a time-honored fear campaign to reduce health benefeits

The special interests seeking to gut those portions of the health reform law that  would be of greatest benefit to consumers clearly believe there is no such thing as historical memory in Washington.

Why else would they bring one of their old front groups out of the storage locker, with just a single new word added to its name? A front group designed to persuade Americans that what they might have thought was in their best interests really isn’t after all.

In the late 1990s, health insurers and their most reliable business allies — including the U.S. Chamber of Commerce and the National Federation of Independent Business (NFIB) — set up a front group called the Health Benefits Coalition. Back then, the industry’s target was the Patient’s Bill of Rights, which would have made insurance firms behave in a more consumer-friendly way. Among other things, the bill of rights would have forced insurers to make an external review process available to health plan enrollees who were denied coverage for doctor-ordered treatments. It also would have given enrollees an expanded right to sue their insurers for wrongful denials of coverage.

The Patient’s Bill of Rights was popular with the public, health care providers and members of Congress on both sides of the aisle. It attracted bipartisan support in both the House and Senate. The sponsors of the Senate version of the bill, in fact, were none other than Republican John McCain of Arizona and Democrat Ted Kennedy of Massachusetts.

Insurers hated it, of course, but knew they would not be able to kill it without the support of other powerful groups. They set out to persuade the Chamber, the NFIB and other groups with clout in Washington, including the National Association of Manufacturers, to join them in creating a new front group that would be operated out of a big PR firm in Washington, Porter Novelli.

It was an easy sell. The insurers convinced the business groups that they too should be worried about the bill because it could also lead to lawsuits against companies whose workers get their coverage through the workplace. The groups gladly signed on, especially after being told that it wouldn’t cost them much. What the insurers really wanted was the ability to use the names of those other groups on the coalition’s letterhead. Most of the money to carry out the PR and lobbying work of the Health Benefits Coalition would come from a handful of big insurance firms and their trade groups. I know this because I attended many meetings of the coalition as CIGNA’s representative at Porter Novelli’s office.

The core element of the coalition’s communications strategy: fear-mongering. The objective was to convince the public and lawmakers that enactment of the Patient’s Bill of Rights would lead to a tidal wave of frivolous lawsuits that would cause health insurance premiums to skyrocket.

It worked brilliantly, as do most fear-based campaigns. No Patient’s Bill of Rights was ever enacted. Patients still have little recourse in the courts if they have been denied coverage for needed care. The feared tidal wave of lawsuits was averted. Health insurance premiums, well they skyrocketed anyway.

Remembering the success of the Health Benefits Coalition, the insurance industry last month brought it out of storage, rechristened it and gave it a new mission. It is now the Essential Health Benefits Coalition, and its goal is to persuade the Obama administration to allow insurers and employers to continue selling policies that are swelling the ranks of the underinsured.

The health care reform law contains a provision that prohibits insurers from selling coverage that doesn’t contain certain “essential benefits.”  The law gave the Department of Health and Human Services the responsibility of determining exactly what those benefits should be. Consumer advocates believe HHS should consider the adequacy of benefits first and foremost. If the essential benefits package is too skimpy, they argue, more and more insurance plans in the future will fall well short of meeting the needs of most American families. But through their new front group, the insurers and their allies insist that HHS must consider cost first, not adequacy.

It already is clear that the Essential Health Benefits Coalition’s campaign of persuasion will be fear-based, just as its predecessor’s campaign was more than a decade ago. The executive director of the coalition contends that if HHS sides with consumer groups, then health plans sold beginning in 2014 — the effective date of many of the reform law’s provisions—will be so “overpriced” that employees and employers won’t be able to afford them.

That executive director, by the way, is Brendan Daly, a former aide to House leader Nancy Pelosi who will run the coalition from his office at the big PR firm he joined late last year, Ogilvy Washington. Apparently with a straight face, Daly is telling the media that the coalition “is simply trying to make the law more affordable.”

If you’re persuaded to believe affordability is the coalition’s real agenda, keep in mind that the groups behind it include the insurers’ two big trade PR and lobbying groups — America’s Health Insurance Plans and the Blue Cross and Blue Shield Association — both of which spent millions trying to shape the reform law to their liking, and the Chamber and NFIB, which spent millions more trying to defeat it. And if you soon find yourself among the underinsured, now you don’t have to wonder why.