- The Washington Times - Wednesday, January 27, 2010

A desire to score political points at the expense of sound policy is undermining the drive to reform the nation’s health care system, one of the health insurance industry’s top executives said in an interview Tuesday.

James G. Carlson, chairman and chief executive officer of Virginia Beach-based Amerigroup Corp., said the decision by President Obama and congressional Democrats to cut health insurance companies out of the debate and vilify them was a misguided strategy because insurers were the primary interest group intent on reining in costs.

“This is a market where unlimited demand meets insatiable supply,” he said, noting that other industry players such as the hospitals and drug companies cut their own lucrative deals with the White House as the reform plans advanced.

“The whole debate has been a real mixed bag for us,” Mr. Carlson said in a meeting with editors and reporters at The Washington Times. “The administration clearly made a choice to demonize the industry, and in the process kicked out of the room the one group most motivated by the profit margin to improve the system.”

Panel eyes deals with special-interest groups

With Mr. Obama’s hopes for a health care overhaul bill hanging by a thread on Capitol Hill, Mr. Carlson said the country is looking at a huge missed opportunity.

“We’re frankly conflicted,” he said. “You can’t spend the years we’ve spent looking at the problems of health care and costs and ever think that this is a situation that can solve itself. Even though there’s plenty not to like for us in the reform bills, all things considered we still would like to see something pass and think the Senate version is more workable for us.”

On Capitol Hill, congressional Democratic leaders continued to scramble to save Mr. Obama’s top domestic priority, still reeling from last week’s Massachusetts Senate election that cost them their filibuster-proof Senate majority. One possibility being discussed is to pass immediately the Senate’s more modest version, coupling it with changes in another bill that would not be subject to a Senate filibuster.

But with the polls turning against the bill and many moderate Democrats balking, “there are no easy choices” on how to proceed, House Majority Leader Steny H. Hoyer, Maryland Democrat, told reporters Tuesday.

Mr. Obama, expected to focus heavily on health care in his Wednesday evening State of the Union address, accepted some of the blame for what he called the “ugly process” of deal making in Congress to put together a bill.

“I think it’s my responsibility … to own up to the fact that the process didn’t run the way I ideally would like it to, and that we have to move forward in a way that recaptures that sense of opening things up more,” Mr. Obama said in an interview Tuesday with ABC News.

Mr. Carlson acknowledged that companies such as Amerigroup, the bulk of whose business involves managing services for states under Medicaid, the state-federal program for the poor, could benefit from the current reform proposals on Capitol Hill. In particular, the bills’ mandate that everyone purchase health insurance coverage — with subsidies to low-income Americans to help pay the premiums — could potentially produce millions of new customers.

He said the mandate — which some have attacked as unconstitutional — must be included if the reform is to work, because private insurers are being asked to accept all customers regardless of their health or any “pre-existing conditions.”

“Without the individual mandate to purchase insurance, the whole argument for health care reform just falls apart,” he said. “The math simply is not going to work.”

But after initially seeking to work with the Obama administration and the Democrats, industry groups such as America’s Health Insurance Plans have quickly turned against the emerging proposals on Capitol Hill. AHIP has warned that new premium taxes, regulations and program cuts included in the House and Senate bills will drive up costs and harm the quality of care.

“Our industry was stiff-armed as the debate went on. It was expedient to cast the insurers as the villain in the drama,” said Mr. Carlson.

Even if Mr. Obama and the Democrats do manage to pass a substantial bill, Mr. Carlson said it will still be years before the effects of the reform — for good or ill — are felt.

He said, “There will be a lot of celebrations, but I’ve always cautioned my investors that there is so much work to do just to implement the plans. You’re talking about 100 new federal boards and agencies to reform one-sixth of the economy. It won’t be the beginning of the end, but just the end of the beginning.”

• David R. Sands can be reached at dsands@washingtontimes.com.

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