Morning Consult’s Meghan McCarthy sat down with America’s Health Insurance Plans President Karen Ignagni this week to discuss the Affordable Care Act nearly 4 years after it was signed into law, where the insurance industry is headed, and what Iganagni is most excited about at AHIP’s upcoming national policy conference. This interview has been edited and condensed.
Morning Consult: We are approaching the four year anniversary of the Affordable Care Act passing. What do you think could’ve been done differently? What should have been done differently?
Karen Ignagni: I think there was a strategic decision made to not have a robust cost containment program in an effort to pass the legislation. And I think one of the most unfortunate things that happened during the summer of 2009 was that health reform become insurance reform.
I think that limited the ability of the framers of the legislation to actually go along in terms of cost containment. One of the things that I’m particularly proud of, and the reason I say this is our moment, is CBO has said that premiums are 15 percent less than what they expected them to be. That almost never happens. The only other time that happened is during Part D, which the plans are also implementing.
I think we are reaching a fork in the road, though, in terms of if we’re going to continue down this path, the role of the public sector—at the federal level and state level—is very important. Are they going to bend to political pressure to limit our ability to use our tools? That will effect affordability. But I think those are the kinds of conversations that will come out in this conference.
We know that from a health plan perspective, this is our moment. And we have significantly demonstrated the ability to marshal tools, to leverage tools to actually move in the direction of more affordability. And there’s a sentinel effect associated with that. How do we put that together with what is the role of the public sector, what is the role of government, and not handcuffing plans in using their tools.
MC: Politicians like to bash insurance companies but then require you to come to the table to make the Affordable Care Act work. How do you balance that public and private push and pull?
KI: Job number one is to get the work done. And to do what consumers expect. And make sure you are hitting the mark from a consumer point of view. And to telegraph to policymakers, whether it be in Washington or at the state level or in the NAIC, to telegraph what is necessary to allow us to deliver on the expectations that consumers have.
That’s why what you are probing is so important. The whole issue of tools. To the extent that politicians—whether at federal or state level—start basically creating an unequal situation, where we can’t do differentiation, where we couldn’t do networks, where we couldn’t do tiering, then they have just vitiated some of the tools necessary to reduce costs.
And I think for the first time consumers are indicating very, very clearly that their priority is to see high quality but affordable health care. So we just have to take what we’re doing at the ground level and what is being demonstrated every day by the men and women who work in our industry and give voice to that in the political arena in the policy community. That’s our job.
MC: The Affordable Care Act clearly cuts the Medicare Advantage program. Is it more than you expected? Is it playing out in a way that was not foreseen?
KI: It’s precisely what we expected, which is why we raised significant challenges and urged members of Congress not to cut $200 billion out of the program. But the 6 percent last year, the 6 percent this year, that’s not all ACA cuts. The ACA cuts are roughly 2 percent of that, so there are many more levers that the agency has to actually address this issue.
And the one thing we have been scrupulous about in our campaign on Medicare Advantage and just to make it clear to members of Congress is that we are not attempting to relitigate the ACA. We are attempting to shine a spotlight on things we think the agency could do that does not have anything to do with the ACA cuts, in an effort to save this program right now.
[The reimbursement reductions] cannot be incorporated into the system without significant cuts in benefits for seniors, or priver network changes or, actually, limits on competition and people being forced to withdraw from markets. Having lived through this before, and what happened about ten years ago, not only do I have no desire to live through that again, I know tangibly what those cuts meant ten years ago to seniors and I don’t think anyone wants to see that again.
MC: Are exchanges something that private employers have to consider in their future? How do you prepare AHIP for something like that?
KI: It’s going to be very interesting to hear how two very prominent employers are thinking about this space and thinking about their own benefit plans. I am excited to hear about that, to have the perspective of what employers are thinking from the horse’s mouth. Are they approaching them simply from the standpoint of that it is helpful administratively, or does it make them back up and think more structurally about what they do in the future?
MC: Narrow networks in health plans on the ACA insurance exchanges are getting a lot of attention now. What are your thoughts on that?
KI: If consumers and individuals purchasing coverage on their own want to have high quality, affordable coverage, then health plans need to be allowed to mobilize and use a variety of tools in the area of care coordination, predictive modeling and data; to identify individuals who are likely to need chronic illness prevention, and to get them in early.
And whether you call it tiering, whether you call it high-performing networks, we are really looking at networks to provide maximum value to consumers. That’s part of a whole moving to affordability. Plans are giving consumers choices, so that’s the most important thing, just like Part D.
We created opportunities for consumers to be empowered. To see tiering in prescription drugs and see what the alternatives were, and make the most appropriate economic decisions for them. And I see the same developing on the provider network side for them. I also see that that is going to have a sentinel effect in terms of provider pricing across the country.
I think the health plans are the dominant piece that gets the cost containment train rolling. And we’ve already seen some evidence of that across the country.
MC: What are the key ideas you want people to take away from your conference?
KI: We think about this as an effort to set the table on the macro policy issues that are effecting the country. Not only at the federal level but increasingly, also, at the state level.
Unlike some other conferences in town that you see, we focus on the here and now, what’s hitting people immediately. What do they need to know to have a very keen idea what’s going on, what are the hot issues, how should they think about them, how does it affect what they do. But also, we think about how we tee up the more inchoate issues, discussions, developments and debates, frankly.
And it’s important to have the perspective of different states. Every state is different, but there are common issues that they are wrestling with.
MC: Have you found that your conference has changed as outside influences take a larger role in Washington? Has the role of the trade association changed?
KI: It’s about policy. It’s about, really, the nexus between policy, economics, and consumer experience and we really look at it from those three perspectives. And from a consumer experience perspective, it’s what do people want to hear, and whom do they want to hear from on informing them about their own plans and what they’re doing in terms of setting their agenda.