Defeated, Health Insurers Cut Lobby Costs, Thank You Obamacare!


Still My Proudest Moment - When We Got Health Care Done with President Obama!

It turns out that Republicans might be right about health reform costing some jobs. The jobs of health insurance company lobbyists. Aww. From the second to third quarter of this year, the health insurance industry is cutting lobbying budgets.
WellPoint Inc. ( WLP ), the largest health insurer based on membership, spent $870,000 on lobbying in the third quarter, up 9% from the prior-year quarter. However, the cost was down by a substantial 34% from the second quarter of 2011.

The second-largest health insurer based on membership and largest in terms of total revenue, UnitedHealth Group Inc. ( UNH ), also recorded a significant 18% year-over-year hike to $650,000, while it witnessed a sizeable 24% decline from the prior quarter.

Meanwhile, CIGNA Corporation ( CI ), the fourth largest health insurer on the basis of membership, bucked the trend by reducing its lobbying cost by a considerable 34% from the year-ago quarter to $470,000, while the amount was 24% higher than $380,000 spent in the second quarter of 2011.

Humana Inc. ( HUM ), which is the fifth-largest on enrollment basis, recorded a 43% year-over-year and 11% sequential decline in lobbying expenses to $160,000.
Now what could be causing this decline? Oh, I don't know, maybe the fact that despite their best efforts, ObamaCare continues to make people's lives better. Despite all their lobbying, the HHS just issued regulations that refused to count broker's fees as health care costs. Despite all their big money efforts, Barack Obama became their worst nightmare, passed health reform, and is now implementing it full speed. And oh, beginning this year, the insurance companies are going to have to start writing checks to their subscribers if the companies don't spend at least 85% of premium revenue in large group markets (80% in individual and small group markets) on you know, providing actual health care services.

Don't take my word for it. Let's return to the story by Zacks Equity Research at the opening of this article:
The insurers are worried about the annual charges and restrictions imposed on them by the health care reform bill, which is the main reason for the high spends on lobbying in both the second and third quarters of 2011. [...]

Thus, all health insurers focused their lobbying on the health care overhaul, while simultaneously lobbying on a variety of other issues as well. However, WellPoint lobbied solely on the various provisions of the reform bill, such as insurance exchanges, rate regulations, essential health benefits and minimum MLR.
Summary: their lobbying scheme didn't work. They know it and are finally resigning to the fact that health reform is the law of the land and that they are going to have to comply with it. And since they can't count lobbying costs as proving you with health care, lobbying costs are now in direct competition with shareholder gain. If the insurance companies want to make more money but can't do it by kicking people off their insurance or counting everything and its mother as a "health care cost," there are only a few ways of doing it: cut administrative costs (hello, industry lobbyists, hi! Waving atcha!), and raise revenue by attracting more customers in a level playing field.

We have counted a lot of benefits of the President's health reform. Whether it's the massive expansion of Medicaid and community health centers, improved Medicare benefits, tough and smart insurance reforms, a patients' bill of rights on steroids, banning pre-existing conditions discrimination (for children now and for everyone in 2014), or the high risk pools that are saving lives now, health reform, day by day, is improving real lives.

But beating the insurance industry lobbyists is a no smaller feat, if political in nature. Forcing insurance companies to reduce lobbying spending - both because their efforts have failed and because they need that money elsewhere (like for shareholders) - is an amazing win for this President and for the American people. Let us not forget that the health insurance lobby is a billion dollar profiteer that, at the height of the health care debate, employed six lobbyists per lawmaker. But the dedication of Democratic members of Congress who did what was right even if it cost them an election, the commitment of activists and supporters who never gave up on pushing reform getting it done, and the tenacity of a President who was determined to get health reform done and stop just talking about it beat that billion dollar lobby.

obama-approved-health-reforThis president has done a lot of great things for the American people. And he will do a lot more next year and in the four years after that after he is re-elected. Presidents are fond of saying how they always have ordinary Americans in their hearts, but no president in recent memory has proved that saying more than President Obama, and no legislation has proved it more than the Affordable Care Act. Health Reform is the president's signature achievement not simply because of the amount of reform contained in it, but because of what it had to beat in order to come to be: Unprecedented political hostility by the Republicans, a gazillion dollars and an army of industry lobbyists, and a political process so corrupted by money that it seems hopeless a lot of the times. It was in that environment that this President got this done for the American people. And that is something to be darn proud of. I will never cease to be proud of that moment - proud of my president, proud of my country, proud to be an American.

Thank you, Mr. President!