AFL-CIO Wants State Regulators to Probe Health Insurers' Lobbying

The president of a giant labor union is urging insurance regulators in four states to investigate whether companies' spending on lobbying against U.S. health reform legislation have led to increases in health insurance premiums.

AFL-CIO President Richard Trumka sent the letters to insurance commissioners in Connecticut, Indiana, New York and Pennsylvania. Laws in these states require them to approve rate changes, according to a statement on the union's Web site. He wants the regulators to review lobbying expenditures before they approve rate increases.

Rosanne Placey, a spokeswoman for the Pennsylvania Department of Insurance, said that to the best of her knowledge, the department hasn't received Trumka's letter. Indiana Insurance Commissioner Carol Cutter said she hadn't yet received the letter, so was unable to comment.

"The health care industry's lobbying expenditures have clearly impacted consumers' health care costs," Trumka wrote in the letter, according to a statement. "We believe that health insurance providers' lobbying expenditures have led to excessive rate hikes."

The AFL-CIO targets WellPoint (NYSE: WLP), based in Indiana; and Cigna Corp. (NYSE: CI), based in Pennsylvania.

Chris Curran, a Cigna spokesman, said premium increases are a result of claims experience and aren't related to health reform. Another "misconception" is that the industry is against reform, he said. "The fact of the matter is that we agree with the president's goal of expanding access, controlling costs, and improving the quality of care; we do not see how that can be accomplished through a government-sponsored plan," Curran said.

The Democrats' favored legislation is represented by four of five health reform proposals that have passed congressional committees. All four include a government-run insurer, an idea strongly criticized by health insurers. The fifth bill is being marked up in the Senate's Finance Committee and does not include the so-called "public option" (BestWire, Sept. 24, 2009).

Anthem Blue Cross Blue Shield, a unit of WellPoint, spent more than $9.5 million on lobbying and asked for a premium increase of up to 30% in Connecticut, the AFL-CIO said.

Cheryl Leamon, a spokeswoman for WellPoint, said the union's statement has many "inaccuracies" and also said the company is not lobbying against health reform. "We may not agree with what the AFL-CIO is advocating for health care reform," she said.

WellPoint was among the first to the table with "reasonable policy recommendations" that it thinks would reform the system from the insurance perspective, Leamon said. The company hasn't spent $9.5 million on lobbying, but lobbying isn't driving premium increases, she said.

"The rising costs of delivering health care is, and the rising utilization of health care services," Leamon said.

The AFL-CIO also targets UnitedHealthcare, a unit of Minnesota-based UnitedHealth Group (NYSE: UNH). The health insurer spent more than $2.6 million on lobbying during the first half of this year and recently proposed a premium increase for its Medicare supplemental insurance plans, the AFL-CIO said.

Attempts to speak with UnitedHealth weren't successful.

Trumka also wants UnitedHealthcare and WellPoint investigated for "forcing" employees to attend meetings intended to pressure them into helping their employers oppose pending health reform legislation.

Insurers are lobbying to defeat the public health insurance option, which would provide competition to lower costs and hold them accountable, the AFL-CIO said.

Curran said that Cigna and the industry "have already put forth a plan that requires and guarantees coverage for everyone -- including for people with pre-existing conditions -- strengthens the safety net so that no one falls through and provides subsidies for those who can't afford it, without adding to the debt burden of the country."

Cigna HealthCare companies currently have Best's Financial Strength Ratings of A- (Excellent); WellPoint's Anthem subsidiaries currently have Best's Financial Strength Ratings of A (Excellent); and UnitedHealthcare companies currently have Best's Financial Strength Ratings ranging from A to A- (Excellent).