Insurers, White House bound by need to make overhaul a success

Although the Obama administration and insurance industry had opposing views on aspects of the health bill that Congress eventually passed, they have now found their fortunes bound together as both work to make the overhaul successful, The New York Times reports. "The political fortunes of President Obama and Congressional Democrats depend on their ability to translate its promise into reality for voters, by reining in health costs and making insurance available to everyone at an affordable price. Likewise, the financial future, indeed the survival, of the health insurance industry depends on the government — on regulations being written by federal officials and on hundreds of billions of dollars in federal subsidies to the insurance companies to cover low- and middle-income people." Members of both sides say the success of the law will depend in part on their ability to collaborate (Pear, 6/3).

Aetna, for instance, is tailoring its merger-and-acquisition strategy to the health-overhaul regulations now being drafted, Dow Jones Newswires/The Wall Street Journal reports. "Aetna M&A strategy includes investment in businesses that can help manage medical costs and quality, [Aetna chief executive Ronald A. Williams] said, noting that the health overhaul is designed to expand access to health coverage yet doesn't address affordability. … As the new overhaul goes into effect, Aetna expects to continue to 'earn an appropriate profit,' which will allow the company to make investments aimed at lowering medical costs and improving quality, 'and make certain that we're delivering both value for our customers as well as value to you, the shareholders of Aetna stock,' he said" (Brin, 6/2).

Meanwhile, some deficit hawks, including supporters of the overhaul, say the promised savings it is expected to deliver may come too late, requiring Congress to take another stab at cutting health costs beforehand, Reuters reports. "It is unclear how much more can be squeezed out of Medicare" -- the health law would extract about $500 billion -- "given the uncertainties and political realities surrounding the overhaul. But a fiscal commission asked by Obama to recommend ways to reduce the deficit and slow the growth of U.S. debt plans to tackle the issue." Andrew Stern, a member of the fiscal commission who backed Obama's healthcare overhaul when he was president of the Service Employees International Union, said, "I'm hoping that we are not going to redebate the bill that's been passed, but work with that as a foundation and then figure out ... what more needs to be done if anything" (Smith, 6/4).

The American Spectator: Many of the important decisions for implementing the new health law will fall to the secretary of Health and Human Services. "There are more than 2,500 references to the secretary of HHS in the health care law (in most cases she's simply mentioned as 'the Secretary'). A further breakdown finds that there are more than 700 instances in which the Secretary is instructed that she 'shall' do something, and more than 200 cases in which she 'may' take some form of regulatory action if she chooses. On 139 occasions, the law mentions decisions that the 'Secretary determines.'" Some of her new and "wide ranging" powers include determining "what type of insurance coverage every American is required to have," influencing "what hospitals can participate in certain plans, can set up health insurance exchanges within states against their will, and even regulate McDonald's Happy Meals" (Klein, 6/4).

---

This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.