Political Group's Health Reform Ad Slams Cigna, Its CEO

WASHINGTON, Aug 04, 2009 (A. M. Best via COMTEX)  -- Insurance companies are increasingly being targeted by political leaders pushing health care reform, often accusing the industry of being the central obstacle to improving the system. Now, their allied organizations are taking that battle to people's televisions. The latest advertisement from Americans United for Change, a progressive group supporting Democratic politics, strikes directly at health insurer Cigna Corp. (NYSE: CI | Quote | Chart | News | PowerRating) and the pay of its chief executive officer.

"Why do insurance companies and Republicans want to kill President Obama's health insurance reform?" the ad begins. "Because they like things the way they are now."

The ad shows an image of Cigna CEO H. Edward Hanway. Next to it is the phrase "$12.2 million a year." It criticizes Hanway's compensation, saying, "Ed makes more in one day than the average worker makes all year long." Then the 30-second spot closes with a stab at the Republican's plan for health care: "Be as rich as Ed. You'll be happy, too."

AUC, a group founded in 2005 to combat the privatization of Social Security, is also a member of Health Care for America Now. When asked why Hanway was singled out, group spokesman Jeremy Funk said, "It's just a shining example -- kind of a poster child of what big insurance is all about." He argued that the industry is about letting "guys like Ed Hanway make $5,883 an hour, raising premiums every other day and denying more and more people coverage because of pre-existing conditions."

Cigna spokesman Chris Curran said, "The debate on health care reform is not about how industry executives are paid; rather, it's about what kind of health care reform can be passed for the greatest benefit of the American people." He said, "we agree with Americans United For Change that health care reform is needed. In fact, we also support the president?s goal of expanding access, controlling costs, and improving the quality of care. However, we do not see how a government-sponsored plan accomplishes that."

Funk argued that the opposition is trying to delay the debate on reform "so they can kill it." He said, "they'll do and say anything to maintain the status quo, because it's all about the bottom line." In Funk's view: "It's time to call these guys out for what they're trying to do."

Curran said that "Cigna and the industry have already put forth a plan that 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."

In November, America's Health Insurance Plans proposed guaranteeing coverage to people with pre-existing medical conditions, coupled with an enforceable mandate that everyone buy coverage. Health plans in the individual market would be required to offer coverage to all applicants, known as guarantee-issue, as part of a universal plan in which all individuals were required to maintain health insurance (BestWire, June 22, 2009).

In June, the former head of public relations for Cigna, Wendell Potter, testified before the U.S. Senate Committee on Commerce, Science and Transportation. He told the committee he "saw how they confuse their customers and dump the sick -- all so they can satisfy their Wall Street investors." He worked as a senior executive at health insurance companies for 20 years, with the last 15 at Cigna (BestWire, June 26, 2009).

Hanway is set to retire by the end of the year. Replacing him as CEO will be David Cordani, 43, president and chief operating officer, starting Jan. 1, 2010, the company announced (BestWire, June 26, 2009).

Cigna HealthCare companies have current Best's Financial Strength Ratings of A- (Excellent).

(Jesse A. Hamilton, Washington bureau manager: Jesse.Hamilton@ambest.com)