AHIP Media Coverage
Affordability of Coverage
Wisconsin Reporter
October 24, 2012
“In the case of the individual market in particular, ACA effectively takes from the young to give to the old,
said Robert Zirkelbach, spokesman for Washington, D.C.–based America’s Health Insurance Plans, or
AHIP, the national trade association representing the health insurance industry. ‘There is broad agreement
that the younger and healthier people are needed in the system to keep coverage affordable,’ he said… For
the young and healthy who have forsaken insurance coverage for just that reason, the requirement to have
insurance or pay a penalty immediately hits the pocketbook. But there are additional pressures on the cost
structure. A new premium sales tax will cost insurers $8 billion in 2014, and tens of billions of dollars in
the years to come. Somebody has to pay for that, and as the law of expense pass-through goes, it will be
health insurance consumers. AHIP projects a 2 percent to 3 percent average rate increase just from the
premium tax.”
Law360
September 21, 2012
“The head of America’s Health Insurance Plans on Friday provided fodder for Democrats and Republicans
in an election-year clash over cuts to Medicare Advantage, telling Congress that trade group members have
weathered payment reductions so far but are deeply concerned future belt-tightening will harm patients.
Karen Ignagni, AHIP’s chief executive, told the health panel of the House Ways and Means Committee
that ‘high-quality, affordable health plan choices’ continued to be available in Medicare Advantage even as
the federal government’s spending on the private policies begins to decline. However, because roughly
$200 billion in savings approved under the Patient Protection and Affordable Care Act are backloaded over
the next decade, the full impact remains to be seen, and very well might cause premiums to surge and
enrollment to plummet, Ignagni said. ‘We’re doing everything we can to bring costs down and improve
quality,’ Ignagni said. ‘[But] we’re very concerned about the future impacts.’”
Kaiser Health News
September 16, 2012
“On the national level, America’s Health Insurance Plans, the insurance industry’s lobbying group, is
pushing for a lower minimum of coverage, to keep prices down for consumers. ‘The imposition of broader
benefit packages than what consumers and small businesses are purchasing today will force consumers to
'buy up' [to] coverage that they may not want or need,’ said Dan Durham, AHIP’s executive vice president,
during a subcommittee hearing on Capitol Hill last week.”
Bloomberg
September 11, 2012
“‘Health plans are doing everything they can to keep coverage as affordable as possible for the millions of
individuals, families, and employers they serve,’ Robert Zirkelbach, a spokesman for America’s Health
Insurance Plans, the industry’s lobbying group in Washington, said in an e-mail. ‘Data clearly demonstrate
that premiums track directly with the underlying cost of medical care.’”
Los Angeles Times
September 11, 2012
“A spokesman for America's Health Insurance Plans, an industry trade group, said companies are ‘doing
everything they can to keep coverage as affordable as possible for the millions of individuals, families and
employers they serve.’”
Politico
August 28, 2012
“Still, the D.C. Chamber of Commerce isn’t convinced. The group, which is worried about health plans’
ability to meet new federal requirements, says shutting down the market outside the exchange stifles
competition. The Affordable Care Act allows states to make this move, but America’s Health Insurance
Plans spokesman Robert Zirkelbach said it runs counter to the law’s purpose. ‘One of the goals of health
care reform is to maximize choice and competition for consumers,’ Zirkelbach said. ‘Limiting where they
can get health care coverage has the opposite effect.’”
Connecticut Mirror
August 2, 2012
“That's a concern to insurers, who worry they won't be able to offer reasonably priced policies that include
all of the coverage required by the mandate. ‘The basic principle of economics is when you add benefits, it
increases cost," said Robert Zirkelbach, spokesman for America's Health Insurance Plans. ‘Some
individuals may see a significant bump-up.’”
Politico
July 30, 2012
“‘This adds to the cost of coverage,’ America’s Health Insurance Plans President Karen Ignagni said last
week at a briefing hosted by the Congressional Health Care Caucus, a GOP congressional forum that also
included leaders from the business community. ‘This is something we’ll want to take a look at prior to
2014, during tax reform.’ An AHIP-funded report found that the tax would increase premiums as much as
2.3 percent in its first year, and ultimately by about 4 percent in 2023.”
Reuters Op-Ed
July 10, 2012
“Healthcare affordability is an issue that touches every part of our nation: single parents struggling to make
ends meet; two-income families trying to get ahead in challenging times; and retirees trying to stretch their
budgets. Equally important, rising medical costs crowd out government spending on other priorities, such
as education and infrastructure, and put our nation’s businesses at a competitive disadvantage in a global
economy. The first priority is to address a number of the reforms taking effect in 2014 that will make
healthcare coverage more expensive.”
Atlanta Journal-Constitution
July 3, 2012
“As the nation’s insurance companies prepare to approach their business in an entirely new way, they
worry about whether all the pieces of the law will fit together so that it benefits both the healthy and the
chronically sick. ‘We have long supported expanding coverage for people with pre-existing conditions, and
millions of people are now going to be covered and that’s a great thing,’ said Robert Zirkelbach,
spokesman for America’s Health Insurance Plans, a trade association for the insurance industry. ‘If this is
going to be something that can be sustained, we have to focus on affordability.’ When 2014 hits, insurers
won’t be able to charge people more because of their health conditions. They also won’t be able to mark up
premiums as much for older people as they do now. Those requirements will drive up the cost of coverage
for the young and healthy, Zirkelbach said.’ ‘Faced with much higher premiums, a lot of those people may
choose not to purchase coverage,’ he said. ‘If people do that, that will drive up overall costs for everybody.
You need to have those younger, healthier people to purchase coverage if you’re going to have a health
care system that works.’”
HealthDay
June 29, 2012
“Karen Ignagni, president and CEO of America's Health Insurance Plans (AHIP), said in a statement that
she anticipates financial obstacles as a result of the ruling. AHIP is a Washington, D.C.-based trade
association representing the health insurance industry. ‘The law expands coverage to millions of
Americans, a goal health plans have long supported, but major provisions, such as the premium tax, will
have the unintended consequences of raising costs and disrupting coverage unless they are addressed,’ she
noted. ‘Health plans will continue to work with policymakers on both sides of the aisle to make coverage
more affordable, give families and employers peace of mind, and promote choice and competition,’ she
said. Figures reviewed by AHIP indicate that the minimum essential health benefits requirement ‘will result
in less affordable coverage for individuals, families and small employers by forcing them to 'buy up' and
purchase more coverage than they may want or need,’ she added.”
Greenville News
June 29, 2012
“And Karen Ignagni, CEO of the trade group America’s Health Insurance Plans, said while the law
expands coverage to millions of Americans, ‘major provisions, such as the premium tax, will have the
unintended consequences of raising costs and disrupting coverage unless they are addressed.’”
The New American
June 29, 2012
“America’s Health Insurance Plans (AHIP), the industry’s chief lobbying group, issued a statement
following the ruling, stressing the importance of ‘secure, affordable coverage choices,’ but saying that
‘major provisions, such as the premium tax, will have unintended consequences of raising costs and
disrupting coverage unless they are addressed.’ AHIP CEO Karen Ignagni suggested that due to the inflated
costs, ‘it’s time for people to roll up their sleeves and look very carefully at those provisions.’...AHIP
counters those claims, citing a study by the Urban Institute that shows premiums for single policy holders,
aged 18 to 34, will boost by $1,400, from $3,600 to $5,000 a year.”
CNN
June 28, 2012
“The trade group that represents health insurance companies - American Health Insurance Plans (AHIP) says in their statement that ‘health plans will continue to focus on promoting affordability and peace of
mind for their beneficiaries. The law expands coverage to millions of Americans, a goal health plans have
long supported, but major provisions, such as the premium tax, will have the unintended consequences of
raising costs.’ But citing research by other sources, AHIP suggests that the health care law will also
increase the cost of health care coverage, by way of premiums, forcing young Americans to buy artificially
high premiums and affordable coverage will be less available.”
Modern Healthcare
June 28, 2012
“The insurance industry's national interest group, America's Health Insurance Plans, released a statement
reiterating its position that ‘universal coverage’ was essential to avoiding significant increases in cost and
decreases in choices for health insurance. ‘The law expands coverage to millions of Americans, a goal
health plans have long supported,’ AHIP President and CEO Karen Ignagni said in a statement, ‘but major
provisions, such as the premium tax, will have the unintended consequences of raising costs and disrupting
coverage unless they are addressed.’”
Rochester Democrat & Chronicle
June 28, 2012
“Insurers on Thursday said they remain concerned about the fees the act imposes on private insurers to help
finance the law, whose overall price tag has been estimated at $1.6 trillion. ‘The law expands coverage to
millions of Americans, a goal health plans have long supported, but major provisions such as the premium
tax will have the unintended consequences of raising costs and disrupting coverage unless they are
addressed,’ said Karen Ignagni, CEO of America’s Health Insurance Plans.”
Detroit Free Press
June 28, 2012
“Karen Ignagni, president and CEO of America’s Health Insurance Plans, an industry group: ‘As the
reform law is implemented, health plans will continue to focus on promoting affordability and peace of
mind for their beneficiaries. The law expands coverage to millions of Americans, a goal health plans have
long supported, but major provisions, such as the premium tax, will have the unintended consequences of
raising costs and disrupting coverage unless they are addressed.’”
Connecticut Mirror
June 28, 2012
“‘The law expands coverage to millions of Americans, a goal health plans have long supported, but major
provisions... will have the unintended consequences of raising costs and disrupting coverage unless they are
addressed,’ said Karen Ignagni, president of the American Health Insurance Group. AHIP, a trade
association that represents Connecticut's insurers, said it would work with policy makers ‘on both sides of
the aisle’ to amend the health care law. A key change insurers want is the end of the ‘premium tax,’ a levy
that will be imposed on insurance policies beginning in 2012. AHIP estimated the tax, which would be
passed along to policyholders, would increase premiums by 2 percent the first year it is imposed and up to
nearly 4 percent 10 years later. ‘(This is) going to add to the cost of health care coverage -- the exact
opposite of what health care reform was supposed to accomplish,’ said AHIP spokesman Robert
Zirklebach.”
Bloomberg BNA
June 28, 2012
“The two associations that represent health insurers stressed the need to control costs. ‘As the reform law is
implemented, health plans will continue to focus on promoting affordability and peace of mind for their
beneficiaries,’ Karen Ignagni, president and chief executive officer of America's Health Insurance Plans
(AHIP), said in a statement. AHIP represents about 1,300 health insurers covering about 200 million
people. Major provisions, such as the premium tax that takes effect in 2014, ‘will have the unintended
consequences of raising costs and disrupting coverage unless they are addressed,’ she said.”
AM New York
June 28, 2012
“Indeed, America's Health Insurance Plans' president Karen Ignagni issued a statement citing studies that
the ruling will increase costs but that AHIP members ‘will continue to focus on promoting affordability and
peace of mind for their beneficiaries.’”
Washington Post’s Wonkblog
March 30, 2012
“As for the insurance industry, America’s Health Insurance Plans spokesman Robert Zirkelbach says that
plans have not changed in light of oral arguments. While they are looking at ‘planning for any potential
Supreme Court ruling,’ right now they continue to treat the Affordable Care Act as the law of the land. ‘No
one knows what they’re ultimately going to decide,’ says Zirkelbach. ‘We’ll find out in June. In the
meantime, our focus continues to be on implementing the new requirements in a way that will be the least
disruptive and costly to consumers.’”
Bloomberg BNA
February 8, 2012
“‘Affordability should be the cornerstone of your consideration,’ America’s Health Insurance Plans (AHIP)
said in its comment letter on the bulletin issued Dec. 16 on essential health benefits (EHBs). The Patient
Protection and Affordable Care Act requires all ‘non-grandfathered’ individual and small group plans—
those that were not in effect before PPACA was enacted in 2010—to cover EHBs inside and outside of
state-based health insurance exchange markets. “Unless the benefits are affordable, many individuals,
families, and small employers will not be able to purchase coverage or continue to offer coverage to
employees, AHIP said in its letter, signed by Daniel Durham, executive vice president of policy and
regulatory affairs, and Gregory Gierer, vice president of policy and regulatory affairs. AHIP represents
about 1,300 insurers covering about 200 million people.”
Politico Pro
February 2, 2012
“‘HHS should issue timely guidance to states on the process for selecting the benchmark plan,’ wrote
America’s Health Insurance Plans. ‘AHIP, which urged HHS not to automatically allow state mandates in
the benchmark plans, asked HHS to clarify ‘at a minimum’ that mandates enacted after 2011 would not
apply to the state-selected benchmark plans. ‘Adding new and expensive mandates to the state-selected
benchmark plan after 2011 raises affordability and quality of care concerns and would create administrative
challenges for states and health plans,’ AHIP wrote.”
Politico Pro
January 30, 2012
“America’s Health Insurance Plans spokesman Robert Zirkelbach said his group’s top concern that the
actuarial value rules could force ‘consumers to ‘buy up’ and purchase additional coverage to meet the new
requirement, [which] will increase premiums and make it harder for individuals, families and small
businesses to keep and maintain health care coverage.’”
Washington Post
December 16, 2011
“It’s hard to underscore what this regulation will mean for health policy. ‘It’s a very important part of the
regulatory picture,’ Karen Ignagni, president of America’s Health Insurance Plans, told me when we
discussed the issue in October. ‘It’s a fundamental part of the affordability calculus, whether or not health
insurance will be affordable.’ “As Ignagni notes, the big challenge in deciding what counts as ‘essential’ is
making a benefit package that is both comprehensive and affordable. Make the benefit package relatively
sparse, and it won’t provide the robust coverage that health reform envisions — meanwhile angering any
patient group whose benefits get left on the cutting room floor. But make the benefit package totally
comprehensive, covering any medical treatment out there, and it becomes prohibitively expensive.”
Rising Medical Costs
Washington Post
October 29, 2012
“‘For a number of years, when people talk about health care costs the debate has focused exclusively on
premiums,’ said Association of Health Insurance Plans president Karen Ignagni. ‘If you’re going to have a
debate and discussion about what’s driving health care costs, you have to get under the hood.’ Ignagni
expects that in any discussion of deficit reduction, ‘one of the first things we’ll do is turn our heads towards
rising health care costs.’ It’s possible that Medicare Advantage plans, for example, might end up on the
table for reduced reimbursement rates. States could take a second look at how much they pay the health
insurers who administer their Medicaid programs.”
USA Today
October 23, 2012
“In fact, drug coupons are estimated to increase prescription drug spending by $32 billion over the next 10
years. Over time, those costs will come back to haunt patients. Though patients with coupons might find
that their prescription costs less that month, ‘overall what it does is to raise costs for everyone, including
themselves,’ according to Susan Pisano, a spokeswoman for the industry trade group America's Health
Insurance Plans.”
Politico
October 4, 2012
“AHIP's Karen Ignagni said Thursday that the national move toward accountable care organizations is
being driven by employers worried about health care costs. ‘It has everything to do with what employers
are telling health plans and their providers,’ she said at a POLITICO Pro briefing when asked what would
happen to ACOs if the Affordable Care Act were repealed.”
Kaiser Health News
October 1, 2012
“But the insurance industry is concerned that they drive patients toward more expensive brand-name drugs,
leaving insurers to cover the full cost, which then gets passed on to consumers in the form of higher
premiums. ‘An individual patient who receives a coupon might not realize that, although that particular
prescription may cost less that month, overall what it does is to raise costs for everyone, including
themselves,’ said Susan Pisano, a spokeswoman for the industry trade group America's Health Insurance
Plans.”
Palm Beach Post
September 29, 2012
“But insurance industry groups say it’s hard to hold down premiums and out-of-pocket costs if there is little
to slow down price increases from out-of-network providers, whether for ambulance service or a host of
other things. ‘What we’ve seen happen across the county is some providers refuse to contract with a health
plan and then want a blank check to charge whatever they want for the service,’ said Robert Zirkelbach,
spokesman for America’s Health Insurance Plans, a Washington group representing large health insurers.
‘Unfortunately, patients are getting stuck in the middle, and that shouldn’t happen. But the focus can’t be
just on what is covered. We also need to focus on what providers are charging.’”
Medical Economics
September 25, 2012
“From the health insurance industry's perspective, says Robert Zirkelbach, a spokesperson for America's
Health Insurance Plans, the increasing prices of services are the strongest recent factor in increasing
healthcare costs. ‘Far more needs to be done if we're going to get costs under control,’ he says. ‘We need
much more transparency about what's driving up healthcare costs.’”
Pioneer Press
September 25, 2012
“On Monday, the trade group for health insurance companies issued a statement in response to recent
newspaper stories about consolidation among health care providers leading to price increases. Robert
Zirkelbach, spokesman for America's Health Insurance Plans, said in the statement: ‘As hospitals have been
buying up physician practices, too often it's simply leading to higher prices for those services.’”
CQ HealthBeat
September 24, 2012
“‘Health plans and employers regularly update the materials they provide to ensure consumers have clear,
user-friendly information about the benefits and costs of their health insurance policies,’ America’s
Health Insurance Plans President and CEO Karen Ignagni said in a statement in February, when the rule
was finalized. ‘The final rule requires an almost complete overhaul and redesign of how information must
be provided to consumers. . . . The benefits of providing a new summary of coverage document must be
balanced against the increased administrative burden and higher costs to consumers and employers.’ AHIP
officials did say that the final rule was better than the initial version proposed by HHS. (See related story,
CQ HealthBeat, Aug. 17, 2011). Supporters of the provision said it will be a significant benefit.”
Cleveland Plain Dealer
September 24, 2012
“Robert Zirkelback, spokesman for America's Health Insurance Plans, said patients not being able to afford
primary care is a serious issue that needs to be addressed as insurers, providers the government work to
revamp the payment system. The group is the insurance industry's trade association. ‘As hospitals have
been buying up physician practices, too often it's simply leading to higher prices for those services -- and
that means higher health care costs for consumers,’ Zirkelback said. ‘It's putting a burden on families. It's
putting a burden on employers. It's putting a burden on state and federal budgets.’”
Bloomberg BNA
September 18, 2012
“‘Capping premium increases without looking at the underlying components is similar to capping the
prices auto makers can charge consumers, while allowing the steel, rubber, and technology manufacturers
to charge the auto makers whatever they want,’ Robert Zirkelbach, spokesman for AHIP, said in an email
to BNA.”
The Morning Call
September 9, 2012
“Robert Zirkelbach, a spokesman for America's Health Insurance Plans, said antitrust concerns prevent the
health insurance trade organization from collecting specific information on hospital-insurer disputes.
However, he did say that while much of the health reform discussion has focused on insurance premiums,
little has been directed at why premiums continue to rise. ‘There needs to be a much greater focus on the
prices being charged for medical services,’ he said.”
Associated Press
August 20, 2012
“A study late last year by the Pharmaceutical Care Management Association, a trade group for prescription
benefit managers, estimated copay coupons could raise prescription drug spending by $32 billion over the
next decade. ‘That's adding to overall health care costs,’ says Robert Zirkelbach, spokesman for another
industry group, America's Health Insurance Plans, and ‘is going to ultimately mean higher premiums for
everybody.’”
Associated Press
August 20, 2012
“A study late last year by the Pharmaceutical Care Management Association, a trade group for prescription
benefit managers, estimated copay coupons could raise prescription drug spending by $32 billion over the
next decade. ‘That's adding to overall health care costs,’ says Robert Zirkelbach, spokesman for another
industry group, America's Health Insurance Plans, and ‘is going to ultimately mean higher premiums for
everybody.’”
Cincinnati Inquirer
August 13, 2012
“Critics said the refunds ignore spiraling medical costs and will stifle reform efforts. ‘I think it creates
barriers because it makes it harder to invest and innovate in new ways to improve the health care delivery
system,’ said Robert Zirkelbach, spokesman for America’s Health Insurance Plans, the industry trade group
in Washington, D.C. Other measures in the law will add much more to premiums than the rebates give
back, Zirkelbach said. Since the law was passed, insurers have been lobbying in state capitals across the
country trying to get as many costs as possible classified as medical costs. Items such as programs to
prevent health care fraud, costs to set up partnerships with doctors and hospitals and payments to insurance
brokers are now limited because they are classified as administrative costs, Zirkelbach said. ‘Those items
all have broad support and help improve health care,’ he said.”
AARP
August 7, 2012
“Industry groups have spoken out against the spending cap, saying the factors it considers have little to do
with why medical costs take a bigger bite every year out of consumers' pocketbooks. ‘The data are very
clear that soaring medical costs — not health plans' administrative costs — are driving health care cost
growth,’ says Robert Zirkelbach, a spokesman for the trade group America's Health Insurance Plans.”
TIME
August 3, 2012
”Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, a lobbying group, emphasizes that
rising health insurance premiums are the result of increasing medical costs, not corporate profits. ‘Ninetysix percent of the increase in premiums over the past five years was due to an increased spending on health
care services,’ he says.”
Connecticut Mirror
August 2, 2012
“That's a concern to insurers, who worry they won't be able to offer reasonably priced policies that include
all of the coverage required by the mandate. ‘The basic principle of economics is when you add benefits, it
increases cost," said Robert Zirkelbach, spokesman for America's Health Insurance Plans. ‘Some
individuals may see a significant bump-up.’”
Bloomberg BNA
August 1, 2012
“‘The MLR completely ignores the real driver of premium increases,’ America’s Health Insurance Plans
(AHIP) said in a release. Ninety-six percent of the increase in premiums from 1989 to 2010 was due to
increased spending on health care, AHIP said, citing federal National Health Expenditure data. In addition,
‘the MLR is not simply a cap on health plans’ profits, salaries, and marketing costs,’ AHIP said. The MLR
caps any expense that does not go directly to pay for medical care or is not an activity approved by the
federal government as improving health care quality, it said. ‘As a result, this regulation places an arbitrary
cap on what health plans can spend on a variety of programs and services that improve the quality and
safety of patient care, help patients navigate a complicated delivery system, and help control soaring
medical costs,’ AHIP said.”
LifeHealthPro
August 1, 2012
“America's Health Insurance Plans (AHIP), Washington, says in a response to today's MLR rebate deadline
that the MLR rebate requirement will do little to control increases in health care costs. ‘The data are very
clear that soaring medical costs – not health plans’ administrative costs – are driving health care cost
growth,’ AHIP says. ‘According to federal government data, 96% of the increase in premiums over the past
five years was due to increased spending on health care services. The MLR completely ignores the real
driver of premium increases.’ The MLR limit also can limit health insurer spending on activities such as
rooting out fraud, setting up accountable care organizations, evaluating health care providers' credentials,
providing patients with access to automated records systems, and paying health insurance agents and
brokers to help customers, AHIP says. ‘Penalizing health plans for investing in these types of initiatives is
the wrong approach,’ AHIP says. ‘All participants in the health care system should be incentivized to
continually innovate and develop new ways to improve care for patients and lower health care costs.’”
Wall Street Journal
August 1, 2012
“Robert Zirkelbach, a spokesman for the trade group America's Health Insurance Plans, said most plans
already cover preventive care, sometimes without co-payments, because it saves them money. The industry
has spoken out against the requirement to cap spending on administrative costs and profit, saying that
medical costs are the main reason for rising premiums.”
Employee Benefit Advisor
August 1, 2012
“However, industry groups say that it's not premium hikes that are driving up costs, but underlying medical
and administrative costs. ‘New medical technologies that have high costs associated, new benefit mandates
- all of those will drive up the cost, which is where the focus should be,’ says Robert Zirkelbach, press
secretary for AHIP. He says the focus should be on providers, as opposed to insurers. ‘You saw this during
reform, when [the debate] focus was on premiums and largely ignored cost drivers. If you want to bring
down the cost, then that's where they lie.’”
CBS News
July 31, 2012
“The idea was to force health insurers to get rising administrative costs under control. But industry
spokesperson Robert Zirkelbach says that's not the problem. ‘What we're paying for physician services,
hospital services, new medical technologies, prescription drugs -- that's what's really driving the rise in
insurance premiums,’ he said.”
Scientific American
July 31, 2012
“It’s hard to say exactly where the extra money for getting rid of these co-pays will come from. ‘Any time
benefits are added to a policy, the additional costs are reflected in the cost of health care coverage,’ Robert
Zirkelbach, a spokes person for America’s Health Insurance Plans, a trade group that represents insurance
companies, wrote to me in an email. But he declined to speculate about how any particular companies
factor in the costs of this new coverage to the bottom line. Fewer unplanned pregnancies, less severe
complications due to gestational diabetes and more kids and moms who are healthier as a result of
breastfeeding, however, should reduce reimbursements for insurance companies for many decades to come.
Health insurance companies already ‘encourage policyholders to get recommended preventive care,’
Zirkelbach says. For good reason—it saves them a lot of money.”
New York Times
July 30, 2012
“Insurance companies say the rebate requirement does not address swiftly rising medical costs, which they
say are the main reason premiums keep going up. ‘Placing an arbitrary cap on administrative costs is going
to do nothing to make health care more affordable,’ said Robert Zirkelbach, a spokesman for America’s
Health Insurance Plans, the industry trade group. ‘There’s a lot of misinformation out there.’”
American Medical News
July 23, 2012
“Insurers say they already provide consumers with plenty of information about coverage. They said the
redesign of benefit summaries will be expensive and drive up the cost of coverage. Health insurance trade
group America’s Health Insurance Plans estimates the initial cost at $188 million and annual cost at $194
million — roughly more than $1 per year for each of the 180 million enrollees. The estimates were
considerably higher than the government’s, which put the 2012 cost at $73 million and the 2013 cost at $58
million.”
Employee Benefit News
July 23, 2012
“‘Robert Zirkelbach, a spokesman for America’s Health Insurance Plans in Washington, D.C., cautions that
‘focusing solely on premiums while ignoring the underlying cost of medical care will not make health care
coverage more affordable for families and small businesses.’ He suggests that public policy address ‘all
factors that drive premium increases, including soaring prices for medical services, the impact of younger
and healthier people dropping coverage in a weak economy, and new benefit mandates and regulations.’
The growth in medical premiums from 2000 to 2010 tracked directly with the growth in benefits, according
to national health expenditure data released by the U.S. Department of Health and Human Services.
Zirkelbach says this trend ‘has been consistent for decades.’”
Georgia Health News
July 19, 2012
“America’s Health Insurance Plans, an industry trade group, said in April that the spending rule could have
unintended consequences, potentially causing some insurers to withdraw from certain markets. ‘The new
medical-loss ratio requirement does nothing to address the real driver of premium increases: the underlying
cost of medical care,’’ AHIP said in a statement.”
Modern Healthcare Op-Ed
June 30, 2012
“The facts are well known in policy circles. We spend more, far more, than our OECD competitors, and
healthcare crowds out investments in other critical national priorities such as education and infrastructure.
Rising healthcare costs are a contributor to stagnant wage growth. What can be done? First and foremost,
we need to focus on provisions of the law that raise costs. That starts with repealing the misguided
premium tax that the Congressional Budget Office has said will result in dollar-for-dollar premium
increases for individual market purchasers, small employers and those covered by private Medicare and
Medicaid plans. Taxing healthcare coverage can only make that coverage more expensive, not more
affordable.”
Washington Post Op-Ed
June 29, 2012
“We must also address the unsustainable rise in medical costs that are burdening families and employers,
taking up a greater share of federal and state budgets, and threatening the long-term solvency of our
nation’s safety-net programs. Until we confront the nation’s spending issues, the promise of health security
for all will remain out of reach. While the focus has been on insurance market reform, health plans have
been leading collaborative efforts to reform the payment and delivery system to promote prevention and
wellness, help patients and physicians manage chronic disease, and reward quality care.”
The New American
June 29, 2012
“America’s Health Insurance Plans (AHIP), the industry’s chief lobbying group, issued a statement
following the ruling, stressing the importance of ‘secure, affordable coverage choices,’ but saying that
‘major provisions, such as the premium tax, will have unintended consequences of raising costs and
disrupting coverage unless they are addressed.’ AHIP CEO Karen Ignagni suggested that due to the inflated
costs, ‘it’s time for people to roll up their sleeves and look very carefully at those provisions.’...AHIP
counters those claims, citing a study by the Urban Institute that shows premiums for single policy holders,
aged 18 to 34, will boost by $1,400, from $3,600 to $5,000 a year.”
ABC 7 Chicago
June 28, 2012
“For the insurers, this seems to be a mixed bag. They may soon have millions of more customers. But an
industry spokesperson says upholding this law still does not address a big underlying problem-- the huge
cost of medical care. ‘The price being charged for services tend to go up every single year in an
unsustainable rate. That's what's driving the rate of insurance premiums and if we want to make health
insurance coverage more affordable. That's where we need to turn our attention,’ Robert Zirkelbach,
America's Health Insurance Plans, said.”
Fox Business
June 22, 2012
“Health insurers are not thrilled with the insurance rebates program, to put it mildly, according to Robert
Zirkelbach, spokesman for America's Health Insurance Plans, an industry trade group. ‘MLR is the absolute
wrong way to get health care costs under control,’ he says. ‘Instead of focusing on what the data shows is
the real driver of rising health insurance premiums, which is underlying medical costs, it is capping health
plan administrative costs, which have been consistent for about the last decade.’”
Bankrate
June 22, 2012
“Health insurers are not thrilled with the health care insurance rebates program, to put it mildly, according
to Robert Zirkelbach, spokesman for America's Health Insurance Plans, an industry trade group. ‘MLR is
the absolute wrong way to get health care costs under control,’ he says. ‘Instead of focusing on what the
data shows is the real driver of rising health insurance premiums, which is underlying medical costs, it is
capping health plan administrative costs, which have been consistent for about the last decade.’”
Orlando Sentinel
June 21, 2012
“Still, some in the insurance industry believe the rule will do more harm than good. ‘The requirement does
nothing to address the real issues that are driving up health-care costs in this country,’ said Robert
Zirkelbach, spokesman for America's Health Insurance Plans, a membership organization for insurance
companies. ‘Imposing an arbitrary cap on health plans' administrative costs will have unintended
consequences that will outweigh any benefits,’ he said. ‘It will paralyze plans from investing in programs
that could lower costs, including programs to prevent fraud and abuse, or that give patients online access to
tools they need to make more informed decisions.’”
CNN
June 19, 2012
“Robert Zirkelbach, spokesman for America's Health Insurance Plans, the national trade association that
represents the insurance industry said the rising cost of care needs to be addressed. ‘Health plans have long
supported reforms to give all Americans the peace of mind and financial security that health care coverage
provides. The nation must also address the soaring cost of medical care that is adding a financial burden on
families and employers and threatening the long-term sustainability of our vital safety net programs.’”
Kaiser Health News
May 21, 2012
“‘This is an important study that clearly demonstrates that rising prices for medical services are driving
health care cost growth,’ said Karen Ignagni, president and CEO of America’s Health Insurance Plans, the
industry lobby. ‘Reducing medical costs is essential to making health care coverage more affordable for
individuals, families, and employers.’”
Orlando Sentinel
May 5, 2012
“‘As the cost of providing medical care increases, premiums rise accordingly, and hospital spending is part
of that,’ said Robert Zirkelbach, spokesman for America’s Health Insurance Plans, a national trade
association for the industry. ‘While I can’t speak to whether these hospitals should get built or renovated,’
Zirkelbach said, ‘I can say that at a time when medical costs are rising at rates that aren’t sustainable, all
drivers matter and need to be assessed very carefully.’”
Forbes
April 27, 2012
“‘The new medical loss ratio requirement does nothing to address the real driver of premium increases: the
underlying cost of medical care,’ said Robert Zirkelbach, spokesman for America’s Health Insurance Plans,
a lobby that includes Aetna Inc. (AET), Humana Inc. (HUM),UnitedHealth Group (UNH) and Wellpoint
Inc. (WLP) among its health plan members.
Wall Street Journal
April 26, 2012
“A spokesman for America’s Health Insurance Plans said the spending-ratio requirement ‘doesn’t do
anything to address the actual drivers of health-care costs,’ particularly the cost of care.”
National Journal
April 26, 2012
“The insurance industry said the regulation doesn’t help bring down health care costs. ‘The new medicalloss ratio requirement does nothing to address the real driver of premium increases: the underlying cost of
medical care,’ America’s Health Insurance Plans spokesman Robert Zirkelbach said in a statement. Health
plans are leading the way on delivery-system reform. The MLR regulation could turn back the clock on
these quality-enhancing programs, as well as fraud-prevention initiatives, while potentially inhibiting the
next generation of delivery-system reforms.’”
Kaiser Health News
April 26, 2012
“America’s Health Insurance Plans, the industry trade group, said the spending rule could have unintended
consequences, potentially causing some insurers to withdraw from certain markets and that it does not
address the biggest reason for rising premiums – underlying health care costs. ‘Moreover, the taxes, benefit
mandates and other regulations in the health care reform law will cause premium increases that far exceed
the value of any prospective rebates,’ the group said in a written statement.”
Healthcare Finance News
April 10, 2012
“At America’s Health Insurance Plans’ Policy Summit last month, it was impossible not to hear the theme
and message AHIP leadership wanted everyone to eat, sleep and breathe: underlying hospital and group
medical practice costs are rising too quickly and insurance plans are merely the conduit for how these costs
are passed on to the public. AHIP President and CEO Karen Ignagni has been on message with this, almost
to a fault, at AHIP conferences and events throughout last year and has brought up the topic at seemingly
every juncture.”
LifeHealthPro
April 5, 2012
“‘This arbitrary federal cap on health plan administrative costs does nothing to address the underlying cost
of medical care that drives premium increases,’ stated Robert Zirkelbach, Vice President, Strategic
Communications for America’s Health Insurance Plans (AHIP.) ‘The potential coverage disruptions and
other unintended consequences of this new regulation are likely to outweigh any benefit these rebates will
provide. Moreover, the new health care reform law includes a number of provisions, such as a
new premium tax, that will cause premium increases that exceed the value of prospective rebates,’ he said
in response to the study.”
The Arizona Republic
April 5, 2012
“‘The medical-loss requirement doesn’t do anything to address the real driver of health-insurance costs,’
said Robert Zirkelbach, press secretary for America’s Health Insurance Plans, an industry group. ‘Medical
claims are the real driver of costs.’ Zirkelbach said other health-care-law requirements, such as a healthinsurance-premium tax and minimum-benefits requirements that take effect in 2014, could also increase the
cost of health insurance. ‘There are a number of provisions that will result in premiums increasing far more
than the value of these potential rebates,’ Zirkelbach said.”
UMN - Smart Politics Blog
April 5, 2012
“In reviewing the run-up to the passage of the ACA, Ignangi said while ‘The health care debate in 2009
shrunk to insurance reform, the issue of cost containment really didn’t get attacked the way it needs to get
attacked.’ Ignangi insisted, ‘Our rates reflect the underlying costs of what’s being charged’ and that true
cost containment was ‘left on the cutting room floor’ back in 2009.”
The Oregonian
March 21, 2012
“‘These were developed to keep coverage as affordable as possible,’ says Robert Zirkelbach, press
secretary of the industry group, America’s Health Insurance Plans. He faulted pharmaceutical costs that are
as much as $500,000 for a year’s treatment.”
Los Angeles Times
March 17, 2012
“Robert Zirkelbach, a spokesman at America’s Health Insurance Plans, said other data indicate that prices
for hospital and other medical services were continuing to spiral higher.”
CNBC
February 28, 2012
“Robert Zirkelbach, press secretary to industry trade organization, America’s Health Insurance Plans said
in a written statement, ‘Arbitrarily capping premiums while allowing medical costs to soar is financially
irresponsible and will put at risk the health care coverage on which families and employers rely.’”
Kaiser Health News
February 1, 2012
“America’s Health Insurance Plans, the industry trade group, said the insurer ‘s tax will cost the industry $8
billion in 2014, and a total of $73 billion through 2019. The trade group said the fee would be passed on to
consumers through higher premiums. It said the tax will increase the average costs of Medicaid coverage
by about $1,530 per enrollee between 2014 and 2023. “‘We believe that all consumers – public program
beneficiaries, employers, and those purchasing coverage in the individual market – should be exempt from
having to pay this tax that will increase their cost of health care coverage,’ said AHIP spokesman Robert
Zirkelbach.”
American Medical News
January 23, 2012
“Health plans increased their premiums in 2010 based on their estimated costs from benefit mandates
included in the health reform law that year, according to a statement by America’s Health Insurance Plans.
These included the requirement that most plans allow dependents to stay on their parents’ health coverage
until age 26.”
Inside Health Policy
January 10, 2012
“‘The public policy discussion needs to focus on the real driver of health care spending: rising prices for
medical care,’ an America’s Health Insurance Plans spokesperson stated in an email to Inside Health
Policy. “The health reform law’s new medical loss ratio requirements did not take effect until 2011, and
AHIP emphasizes that administrative costs in 2010 already were a shrinking portion of premiums. ‘The
portion of premiums allocated to health plans’ administrative costs was among the lowest in recent years,
despite the fact that health plans have been incurring new compliance and regulatory costs related to the
health care reform law,’ AHIP states.”
Kaiser Health News
January 9, 2012
“Karen Ignagni, president of America’s Health Insurance Plans, said that the portion of premiums
‘allocated to health plans administrative costs was among the lowest in recent years, despite the fact that
health plans have been incurring new compliance and regulatory costs related to the health care reform
law.’”
American Medical News
December 12, 2011
“Speaking Nov. 15 at the Fall Forum hosted by the trade group America’s Health Insurance Plans,
the group’s president and CEO, Karen Ignagni, said the scrutiny and transparency required under the
health reform law could help insurers make their case that the underlying cost of care drives
premiums higher. “Too often, she said, health care costs are equated with premiums, and
government efforts to control costs stop with barring insurers from raising premiums. “She and
others in the industry say elements of the reform law are likely to raise premiums. A few weeks
before the Fall Forum, AHIP released research it had commissioned projecting that insurers would
need to raise premiums by as much as 3.7% to cover the health insurance industry fee (AHIP calls it
a ‘premium tax’) that takes effect in 2014 under the reform law.”
Hartford Courant
December 6, 2011
“‘The MLR requirement includes a number of unintended consequences including: disrupting health care
choices for consumers, turning back the clock on quality improvement initiatives and stifling innovation by
health plans,’ said Robert Zirkelbach, spokesman for the insurers’ trade group America’s Health Insurance
Plans. ‘At a time when the nation is facing a health care cost crisis, we believe the MLR regulation should
recognize the promising new strategies that health plans are employing to achieving cost containment. To
discourage investment in these initiatives is penny-wise and pound-foolish.’”
Hartford Courant
November 30, 2011
“Health insurers will see savings as a result of the generic substitutes, said Susan Pisano, a spokeswoman
for the trade group America’s Health Insurance Plans. “‘The ability to provide generic drugs for patients
for whom that works means that insurers can make prescription drug benefits more affordable and
accessible to tens of millions of people,’ Pisano said.”
St. Louis Post-Dispatch
November 28, 2011
“‘We don’t think patients should be stuck in the middle,’ said Robert Zirkelbach, a spokesman for
America’s Health Insurance Plans (AHIP), an industry trade group based in Washington. ‘Some physicians
refuse to participate in networks and want a blank check to charge whatever ... Health plans want to pay the
usual customary rate for that service in the marketplace.’ “‘The real discussion needs to be what is an
appropriate rate for services,’ Zirkelbach said, ‘because the data show that these charges are exorbitant and
have extreme variation even within the same market.’”
Politico Pro
November 18, 2011
“America’s Health Insurance Plans, the industry’s trade group, says 86 percent of plans currently provide
some information on the cost of medical services and hospital stays.
‘Health plans are increasingly providing policyholders with information on the safety, quality and cost of
medical services and technologies so they can make the most informed health care decisions,’ said AHIP
spokesman Robert Zirkelbach.”
Health Care Cost App
PR Week
November 1, 2012
“‘Here in Washington, to break through the clutter, using digital media has become indispensable in
communicating about our priority issues,’ said Robert Zirkelbach, VP of strategic communications at
AHIP. Zirkelbach said he is unaware of other trade groups using apps to tell their stories on the Hill. Most
lobbying-related apps he has seen have helped stakeholders contact their lawmakers effectively, as opposed
to sharing information with them.”
USA Today
October 30, 2012
“Robert Zirkelbach, spokesman for America's Health Insurance Plans, expressed concern about the 13%
overall increases. ‘In order to make health care coverage more affordable, there needs to be a much greater
focus on the prices that are being charged for prescription drugs and other medical services, which continue
to increase at unsustainable rates,’ he said. AHIP launched a new iPad app today, U.S. Health Care
Spending 101, designed to help people better understand those rising costs, Zirkelbach said.”
National Journal: Influence Alley
October 30, 2012
“Who'll be using the app? Lobbyists on the Hill and in the states as well as AHIP members, says the
group's spokesman Robert Zirkelbach. Imagine a lobbyist talking to a member of Congress about a
provision of the 2010 health care law that he or she is lobbying against. That's where the app comes in,
Zirkelbach said, helping to provide data for arguments. While AHIP has very clear positions on the
Affordable Care Act, opposing minimum coverage requirements for instance, the group took a just-thefacts-ma'am approach to the app, Zirkelbach said.”
National Journal: Need to Know Memo
October 30, 2012
“America’s Health Insurance Plans came out with a new iPad app on Monday that aims to explain exactly
how health spending got so expensive in the United States. ‘Rising health care costs are crushing our
economy, making it harder for individuals and small businesses to afford coverage, and crowding out
spending on other urgent national priorities,’ said AHIP CEO Karen Ignagni in a statement.”
Politico Pulse
October 30, 2012
“AHIP has a new app to illustrate drivers of health care spending - including showing the role of health
plan administrative costs. AHIP says its iPad app, ‘U.S. Health Care Spending 101,’ consolidates 50 years
of data from CBO, CMS and OMB into "a series of simple, interactive charts.’ It's part of the insurance
lobby's plan to highlight the issue of rising health care costs after the election. Spoiler alert: AHIP says the
data show ‘very clearly’ that the rise in premiums tracks directly to underlying medical costs, so don't
blame them.”
CQ HealthBeat News
October 30, 2012
“‘The national health care cost debate needs to be based on real data about what is driving the rise in health
care spending,’ AHIP President and CEO Karen Ignagni said in a statement. ‘This new app provides policy
makers and stakeholders with one-stop shopping for health care cost data.’”
Healthcare IT News
October 29, 2012
"‘Rising healthcare costs are crushing our economy, making it harder for individuals and small businesses
to afford coverage, and crowding out spending on other urgent national priorities," said AHIP president and
CEO Karen Ignagni ‘The national healthcare cost debate needs to be based on real data about what is
driving the rise in health care spending. This new app provides policymakers and stakeholders with onestop-shopping for health care cost data,’ she added.”
‘In Case You Missed It’ Media Emails
AUGUST 27, 2012
ICYMI: PROVIDER CONSOLIDATION LEADING TO “OUTRAGEOUS”
PRICES FOR CANCER TREATMENTS, ROUTINE DOCTOR VISITS
Charlotte Observer: Hospitals “dramatically inflating prices on chemotherapy drugs at a time when they
are cornering more of the market on cancer care.”
Cleveland Plain Dealer: Additional fees “can result in charges that are two, three, or four times more
costly for patients -- all for basically the same care.”
There has been a steady stream of stories over the past ten days about the impact of provider consolidation
on health care prices. For example, the Wall Street Journal last week highlighted the impact on prices
when hospitals purchase physician practices, noting that “hospital systems with strong market heft can
often negotiate higher rates for physician services than independent doctors get. The differential varies
widely, anywhere from 5% or less to between 30% and 40%.”
Similarly, a recent article in the Orlando Sentinel examined the impact of consolidation in Florida, citing a
study showing that “the cost for a basic doctor visit nearly doubled once a practice was purchased.”
According to this study, “Last year, a 15-minute visit to a doctor in private practice cost $69, including the
$14 patient co-pay, the report said. That same visit to a hospital-employed physician cost $124. The patient
portion rose to $25.”
Two more stories this week highlight the impact provider consolidation is having in other parts of the
country. The Charlotte Observer investigates the impact of provider consolidation on cancer drug prices
and a story in the Cleveland Plain Dealer looked at the higher costs to patients when hospitals purchase
physician practices.
Continuing its examination of hospitals in North Carolina, The Charlotte Observer’s latest piece, “Prices
soar as hospitals dominate cancer market,” includes the following highlights:
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“The newspapers found hospitals are routinely marking up prices on cancer drugs by two to 10
times over cost. Some markups are far higher. It’s happening as hospitals increasingly buy the
practices of independent oncologists, then charge more – sometimes much more – for the same
chemotherapy in the same office.”
“The rising price of cancer treatment has financially devastated many families, while driving up
insurance costs and causing some patients to put off needed treatments.”
“After examining some chemotherapy bills collected by the Observer, Hopkins called the markups
‘outrageous.’”
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“The drug data, along with scores of interviews, help explain why hospitals have become so
expensive – and why health care spending now makes up 18 percent of the national economy.”
“Increasingly, however, private oncologists are under financial pressure to sell their businesses to
hospitals. When they do, hospitals often charge more.”
“In a review of claims for seven cancer drugs, the newspapers found that charges for all but one
drug were significantly higher at hospitals and hospital-owned clinics – usually more than 45
percent higher.”
“Levine Cancer Institute, for instance, charges about $106 for each unit of Aloxi, the anti-nausea
drug. But at Carolina Oncology Specialists, an independent clinic in Hickory, the charge is just
$50.”
“A recent study by Avalere Health, a consulting firm, found similar disparities nationally.
Chemotherapy costs 24 percent more in an outpatient hospital setting than in a doctor’s office, the
study concluded.”
“Size has given hospitals major advantages.”
“An Observer investigation in April showed how hospital consolidation has led to higher prices.
When hospitals merge into large systems, they gain leverage to negotiate higher payments from
private insurers.”
Patients are not just facing higher prices for cancer treatments, but also routine doctors’ office visits.
According to an article in the Cleveland Plain Dealer, “Medical billing, a world of hurt,” hospital systems
in Northeast Ohio are “doing away with the age-old doctor's office visit,” which they say is part of “a
profound shift in the nation's health care delivery system that has left some patients saying they're unable to
afford routine care.”
The article notes “…more and more doctor's visits are at one of a growing number of ‘off-campus’ health
centers, which bill patients for ‘outpatient hospital visits,’ a designation that brings higher payments from
Medicare and private insurers for the same services performed in a ‘doctors' office’ visit.” These new types
of doctors’ office visits hit patients with private coverage particularly hard because “there are usually two
separate charges -- one for the doctor often charged at a higher hospital rate and another for the space used
to treat a patient, known as a ‘facility fee.’ This dual bill for a single treatment can result in charges that
are two, three, or four times more costly for patients -- all for basically the same care.”
According to the article “The shift to billing patients for visits to hospitals instead of doctor's offices is part
of a larger national trend that has been embraced by local health systems, most notably the Clinic,
MetroHealth Medical Center and University Hospitals. ‘This is happening all over the country, where you
have the big hospitals gobbling up the primary-care physicians and expanding out into the suburbs as a way
of feeding into their systems,’ said Stuart Altman, an economist and professor at Brandeis University in
Boston…‘It affects health care costs because hospitals charge more and get paid more,’ added Altman.”
AHIP’s Robert Zirkelbach also weighed in on this trend, saying, “As hospitals have been buying up
physician practices, too often it's simply leading to higher prices for those services -- and that means higher
health care costs for consumers. It's putting a burden on families. It's putting a burden on employers. It's
putting a burden on state and federal budgets.”
AUGUST 27, 2012
WALL STREET JOURNAL: SAME DOCTOR VISIT, HIGHER COST
“…hospital systems with strong market heft can often negotiate higher rates for physician services than
independent doctors get. The differential varies widely, anywhere from 5% or less to between 30% and
40%.”
“Hospitals say the acquisitions will make health care more efficient. But the phenomenon, in some
cases, also is having another effect: higher prices.”
“…after one group of physicians based in Burlingame, Calif., came under the umbrella of the powerful
Sutter Healthsystem in 2010, its rates for services increased about 140%.”
A new Wall Street Journal story, “Same Doctor Visit, Higher Cost,” highlights the impact on prices when
hospitals purchase physician practices.
Highlights are included below:
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“After David Hubbard underwent a routine echocardiogram at his cardiologist’s office last year,
he was surprised to learn that the heart scan cost his insurer $1,605. That was more than four times
the $373 it paid when the 61-year-old optometrist from Reno, Nev., had the same procedure at the
same office just six months earlier.”
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“But something had changed: his cardiologist’s practice had been bought by Renown Health, a
local hospital system. Dr. Hubbard was caught up in a structural shift that is sweeping through health
care in the U.S.—hospitals are increasingly acquiring private physician practices.”
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“As physicians are subsumed into hospital systems, they can get paid for services at the systems’
rates, which are typically more generous than what insurers pay independent doctors. What’s more,
some services that physicians previously performed at independent facilities, such as imaging
scans, may start to be billed as hospital outpatient procedures, sometimes more than doubling the
cost.”
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“With private insurers, hospital systems with strong market heft can often negotiate higher rates
for physician services than independent doctors get. The differential varies widely, anywhere from 5%
or less to between 30% and 40%, industry officials say.”
Click here to read the full article. Visit AHIP Coverage for more information on the impact of provider
consolidation.
AUGUST 1, 2012
WHAT YOU NEED TO KNOW—MLR REBATES
As you know, today is the deadline for health plans to pay out rebates to consumers and employers as a
result of the medical loss ratio (MLR) regulation. As you cover this issue, there are some important facts
you should consider.
There is broad recognition that health care costs are rising at an unsustainable rate. But the data are very
clear that soaring medical costs – not health plans’ administrative costs – are driving health care cost
growth. According to federal government data, 96 percent of the increase in premiums over the past five
years was due to increased spending on health care services. The MLR completely ignores the real driver
of premium increases.
In addition, despite what some have said, the MLR is not simply a cap on health plans’ profits, salaries, and
marketing costs. The MLR caps any expense that does not go directly to pay for medical care or is not
included on a pre-approved list of “activities that improve health care quality.” As a result, this regulation
places an arbitrary cap on what health plans can spend on a variety of programs and services that
improve the quality and safety of patient care, help patients navigate a complicated delivery system, and
help control soaring medical costs. These include:
 Initiatives to prevent and deter fraud and abuse in the health care system;
 Developing partnerships with providers, such as Accountable Care Organizations, to reward
quality, value, and better health outcomes;
 Credentialing health care providers to ensure that in-network doctors and hospitals provide safe,
high-quality care;
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Providing patients with online and mobile access to their claims history and Personal Health
Records; and
Providing individuals and small businesses with access to agents and brokers to help find the
coverage that is right for them.
Penalizing health plans for investing in these types of initiatives is the wrong approach. All participants in
the health care system should be incentivized to continually innovate and develop new ways to improve
care for patients and lower health care costs.
Despite the challenges created by the MLR, health plans will continue to lead the way on delivery system
reform and quality improvement. Health plans are partnering with hospitals and doctors all across the
country to change payment models to reward quality and better health outcomes, and they have pioneered
innovative programs and services to coordinate care for patients with multiple chronic conditions, help
patients manage chronic disease, and promote prevention and wellness. These initiatives have demonstrated
results in better health outcomes, improved patient safety, fewer preventable hospital readmissions and
lower healthcare costs. In fact, policymakers are now trying to get Medicare and Medicaid to adopt many
of the programs that have proven to work in the private sector.
It is also important to keep in mind the overall impact of the health care reform law on the cost of health
care coverage. Major provision of the reform law will cause premium increases that far exceed the value of
prospective rebates, including:
 A new $100 billion premium tax;
 Age rating restrictions that will cause significant premium increases for younger individuals; and
 New benefit mandates that will force millions of consumers and employer to purchase coverage
that is more comprehensive – and more expensive – than they have today.
The health care reform law expands coverage to millions of Americans, a goal health plans have long
supported, but this goal can only be sustained if health care coverage is affordable. To create a sustainable
health care system, there needs to be a much greater focus on the soaring cost of medical care and
provisions in the health care reform law that will add to the cost of health care coverage.
NOVEMBER 28, 2011
SAMUELSON PAINTS A DEVASTATING PORTRAIT OF U.S. HEALTH
CARE SPENDING
The Washington Post‘s Robert Samuelson has a must read piece on the future of government spending and how critical
getting health care costs under control is to restraining government spending. Samuelson turns to the recent OECD
analysis on developed countries’ health care spending. He writes:
What propels U.S. health spending upward? The OECD’s answer comes in two parts: steep prices and abundant
provision of some expensive services. In 2007, an appendectomy cost $7,962 in the United States, $5,004 in Canada
and $2,943 in Germany. A coronary angioplasty cost $14,378 in the United States, compared with $9,296 in Sweden
and $7,027 in France. A knee replacement was $14,946 in the United States, $12,424 in France and $9,910 in Canada.
Knee replacements in the United States were almost twice as common per 100,000 population as in the rest of the
OECD. So were MRI exams and angioplasties.
This is a devastating portrait. At times, the U.S. health care system delivers the worst of both worlds: pay more, get
less. Unfortunately, the message isn’t new. America’s fragmented and overspecialized health system maximizes returns
to providers — doctors, hospitals, drug companies — but not to society. Fee-for-service reimbursement allows
providers to reconcile their ethical duty (more care for patients) and economic self-interest (higher incomes). The more
they do, the more they earn. Restraints are few, because patients and providers both resist limits on their choices.
NOVEMBER 18, 2011
CONGRESSMAN ARGUES IN ORDER TO END MEDICARE FRAUD WE
HAVE TO STOP PAY-AND-CHASE
Last week, we missed this great opinion piece from Representative Peter Roskam in the Miami Herald on
the need to end Medicare Fraud. Roskam writes that the amount of Medicare fraud, conservatively $50
billion annually, “exceeds the value of all the cocaine smuggled in to North America.” This builds off
Reason magazine’s piece written by Peter Suderman who interviewed a former federal prosecutor who
said that Medicare fraud was rapidly eclipsing the drug trade as the newest criminal enterprise in South
Florida.
Roskam argues that Medicare fraud is not a function of bad policing but rather Medicare’s antiquated “payand-chase” system. He writes:
“Medicare does not effectively guard against fraud on the front end — cutting checks without thorough
fraud-check measures – so law enforcement officials must pursue fraudulent claims after reimbursement. It
is the equivalent of a retail store processing a customer’s credit card approval long after the clothes have
left the store. It’s nonsensical.”
Roskam says the solution is a bill he introduced in the House of Representatives (one that enjoys wide bipartisan support) that would “put in place preventative fraud-check measures to strengthen Medicare,
saving taxpayers billions. Medicare would utilize cutting-edge technology to better identify and prevent
fraud on the front end – similar to the credit card industry’s system of reviewing data in real-time at the
point of sale – and phase out the current ‘pay-and-chase’ system. It would also aid states in identifying and
preventing Medicaid overpayments and improve fraud-data sharing across agencies and programs. Finally,
it would help doctors by curbing Medicare’s pernicious physician identify theft issues.”
NOVEMBER 15, 2011
MORE EVIDENCE OF THE ASSOCIATION BETWEEN HOSPITAL
MARKET CONCENTRATION AND HIGHER PRICES AND PROFITS
A new policy brief by the National Institute of Health Care Management, More Evidence of the
Association Between Hospital Market Concentration and Higher Prices and Profits, shows that “the prices
hospitals charge to private insurers for 6 common procedures are 30 to 50 percent higher when the hospital
is located in a market where it faces less competition from other hospitals.”
Here are a few highlights:
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“…because the ACA coverage expansions will be financed in part by slowing the rate of increase
in Medicare payment updates, there is concern that hospitals with as yet unexploited pricing leverage
will attempt to recoup some of the lost Medicare revenue by raising prices to private insurers.
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“…my own recent work has shown that the ability to shift costs to private insurers rather than
cutting costs for all patients is stronger in markets where hospital concentration is higher.”
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“…using individual level data from 61 hospitals for patients treated during 2008 for any of six
high-cost inpatient cardiac or orthopedic procedures, I show that hospitals in concentrated markets
charge significantly higher prices to private payers than do their peers in more competitive markets.
Furthermore, these prices are significantly above their direct costs of providing care.”
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“Results clearly showed that hospitals in concentrated markets, where there is less competition,
are able to extract significantly higher payments from private insurers for each of the six procedures
studied.”
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“…the average hospital in concentrated markets received $32,411 for each commercially insured
patient undergoing coronary angioplasty, or one and a half times the $21,626 received in competitive
markets.”
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“Traditionally, hospitals have sought to cover shortfalls from public payers by charging higher
prices to private payers.”
“The work reported here confirms earlier studies showing that hospitals are able to extract higher
private payments when they hold more market power.”
“Now provisions of the ACA are encouraging further consolidation of hospitals and physicians,
and the final antitrust review regulations from the Department of Justice and the Federal Trade
Commission have eliminated the proposed mandatory review of certain prospective ACOs.”
“It is clear…that the ongoing consolidation of local hospital markets is already frustrating the
efforts of employers and private insurers to moderate the growth of health care costs.”
“…if ever-strengthening provider market power continues to push private premiums upward and
erode private coverage, hospitals may find themselves in the ironic position of serving a larger share of
patients covered by forms of public insurance that pay the lowest rates. They may also face demands in
some states for government regulation of the prices they charge.”
AHIP Coverage Blog Posts
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AHIP’s Ignagni on Premium Tax (11/9/12)
Survey Finds Californians Unprepared for Long-Term Care Costs (11/8/12)
Age Rating Restrictions “May Raise Rates for Consumers as Much as 45%” (11/8/12)
Fox Business Op-Ed Examines the Impact of the Premium Tax (11/6/12)
Altarum Institute Report: Medical Prices Continue to Rise (11/5/12)
Denver Post: New Database Will Shine a Harsh Spotlight on Health Price Differences (11/2/12)
AHIP’s iPad App in the News (11/2/12)
The Health Law “Makes Coverage…More Expensive for Young People” (10/31/12)
AHIP Launches New Health Care Spending iPad App (10/29/12)
KHN and PBS Newshour Look at Seven Factors Driving Up Health Care Costs (10/25/12)
Primary Care Physician Says Drug Discount Coupons Good Deal for Drug Companies, But Not
So Good for Patients (10/24/12)
Lack of Hospital Competition Drives Up Health Care Costs (10/24/12)
Infographic: The Cost of a Hospital Stay (10/22/12)
Politico Pro: AHIP’s Ignagni Addresses Drivers of Health Care Costs (10/10/12)
Tampa Bay Times: Hospital Mergers and Consolidations Historically Have Led to Higher Prices
(10/10/12)
Inside Health Policy Features AHIP’s Views on a Safe Harbor to Lower Health Care Costs
(10/9/12)
Charlotte Observer: NC Attorney General to Investigate ‘Artificially High’ Hospital Prices
(10/9/12)
Washington Post & KHN Examine the Effect of Prescription Drug Coupons on Health Care Costs
(10/2/12)
Forbes Column Examines the Effect of Provider Consolidation on Health Care Costs (10/2/12)
AHIP Submits LTE to USA Today on Premium Tax (10/2/12)
NYT Editorial: How Insurers Can Help (10/1/12)
JAMA: “Hospital Price Increases are Now the Largest Contributor to Increases in Insurance
Premiums” (9/26/12)
Infographic: 5 Most Expensive Treatments and 5 Fastest Growing Treatments (9/25/12)
WSJ Op-Ed Ignores Critical Role of Health Plans in Delivery System Reform (9/25/12)
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New Report, Same Old Story – Higher Prices Driving Increases in Health Care Spending
(9/25/12)
ICYMI: Provider Consolidation Leading to “Outrageous” Prices for Cancer Treatments, Routine
Doctor Visits (9/24/12)
NPR: MLR “Could Actually Make Health Insurance More Expensive” (9/20/12)
Medical Loss Ratio – What You Need to Know (9/19/12)
Salt Lake Tribune: Young, Healthy Individuals to Bear the Cost of Health Reform (9/18/12)
Orlando Sentinel: “[Provider] Consolidations are Doubling the Cost of Health Care” (9/17/12)
Survey Finds Cost of Long-Term Care a Concern of More Than Half of California Voters
(9/13/12)
Meta-Analysis Shows Medication Noncompliance Costs Between $100 Billion to $289 Billion
Annually (9/11/12)
New Analysis in Health Affairs Outlines Framework for Effective Public/Private Sector
Collaboration in Payment and Delivery System Reform (9/4/12)
Hospital Monopolies Could Drive Up Costs (9/4/12)
NYT: “When It Comes to Medical Care, Many Patients and Doctors Believe More is Better”
(8/28/12)
WSJ: Provider Consolidation Leading to Higher Costs (8/27/12)
Pioneer Press Op-Ed Highlights Premium Tax (8/23/12)
NYT Op-Ed: “For a Large Part of Medical Practice, We Don’t Know What Works But We Pay for
it Anyway” (8/20/12)
Issue Brief Finds Twelve States Have An Obesity Rate Above Thirty Percent (8/14/12)
AHIP’s Robert Zirkelbach on CBS Evening News (8/13/12)
Washington Post Examines Impact of Health Reform Law on Premiums (8/10/12)
Washington Post: Inappropriate Procedures Are Expensive and Risky (8/9/12)
Oregon Study Says Federal Health Reform Will Cause Some Premiums to Rise (8/6/12)
Robert Samuelson: “Controlling Spending on Medical Advances Isn’t Easy” (8/2/12)
Savings Due to Generic Drug Use Totals $1 Billion Every Other Day (8/2/12)
Politico Spotlights AHIP’s Efforts to Repeal Premium Tax (7/31/12)
NIHCM Foundation Data Brief Examines Concentration of Health Care Spending (7/27/12)
“The Real Cost of Health Care is One of the Best-Kept Secrets in America” (7/25/12)
Bloomberg: Surgery Center’s Out-of-Network Rates 5 to 35 Times In-Network Charges (7/20/12)
USA Today Article Fails to Mention Impact of Premium Tax on Consumers and Employers
(7/19/12)
Robert Wood Johnson Foundation Releases Update on the Impact of Hospital Consolidation
(7/12/12)
AHIP’s Ignagni: Now is the Time to Focus on Healthcare Affordability (7/10/12)
What They Are Saying: Small Employer Group on the Health Insurance Tax (7/10/12)
USA Today Op-Ed: High Health Care Costs Result from High Prices Charged by Providers
(7/5/12)
Post-Supreme Court Ruling, “We Have to Focus on Affordability” (7/3/12)
Health Care Cost Institute: Spending on Children’s Health Care Rising Faster Than Adults
(7/2/12)
AHIP’s Ignagni: Affordability is Key (7/2/12)
Karen Ignagni: “Now is the Time to Turn to Affordability” (6/29/12)
Impact of the Health Insurance Tax “Likely Would Be Catastrophic” (6/22/12)
Robert Samuelson: “The ACA Discriminates Against the Young in Favor of the Old” (6/18/12)
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Health Plans Work to Manage Costly Diseases (6/18/12)
Health Care Costs in the News (6/17/12)
AHIP’s Ignagni: Kentucky’s Attempts at Reform Led to ‘Eye-Popping Premium Increases’
(6/15/12)
Proposed NYC Hospital System Merger “Could Limit Options for Patients” (6/7/12)
The National Institute for Health Care Management Foundation Studies Health Spending (6/1/12)
CNN: ‘Health Care Costs All Over the Map’ (5/31/12)
Reports Highlight Rising Medical Prices (5/25/12)
New Study Finds Health Care Spending Rose Faster Than Inflation (5/21/12)
House Hearing on Health Care Consolidation and Competition (5/18/12)
Milliman Medical Index: Health Care Costs Reach New High (5/17/12)
Washington Examiner Focuses on Rising Hospital Rates (5/10/12)
Addressing the Issue of Health Care Waste (5/10/12)
Health Plans Work to Reduce Obesity (5/9/12)
The Latest on the Cost of Health Care (5/8/12)
AHIP’s Ignagni: Health Plan Innovation Across the Nation (5/2/12)
Cost Spotlight: A 443% Markup on Prescription Drugs (4/30/12)
Higher Health Care Costs and Job Creation (4/17/12)
FTC on Hospital Consolidation in Ohio: Merger “Will Probably Result in ‘Higher Health Care
Costs for Patients, Employers and Employees.’” (4/3/12)
The FTC and Rising Health Care Costs (3/19/12)
# of $1 Million or More Hospital Stays Increases by 7-Fold in Northern California (3/12/12)
Washington Post’s Wonkblog: Why an MRI Costs $1,080 in America and $280 in France (3/5/12)
Another Take on the RAND Study (3/1/12)
A Building Boom That Could Bust Us (2/23/12)
National Journal Cover Story – The New Goliaths: The 2010 Health Law Was Designed to Lower
Costs (2/17/12)
Fact Check: Provider Consolidation Drives Up Prices (2/17/12)
The Great State Experiment With Market Reforms and No Mandate = Higher Premiums,
Coverage Disruption, and Loss of Choice (2/16/12)
Explaining Variation in Private Health Care Spending – Hospital Prices (2/15/12)
What Role Do Specialist Referrals Play in Increasing Health Care Costs (1/24/12)
Cost Spotlight: New Cancer Drugs (1/24/12)
Forbes Columnist Wonders: Are We Just Playing Around Edge of Health Care Costs (2/20/12)
Cost Spotlight: Another Example of Self-Referrals Leading to Higher Health Care Spending
(1/18/12)
The Facts: Premiums and Underlying Medical Costs (1/12/12)
Must See WebTV: Milliman Video on ESI – Common Driver of Increasing Costs = Underlying
Cost of Care (1/11/12)
Cost Spotlight: One Mother’s (And Editorial Writer’s) Look at Hospital Costs and Charges
(1/10/12)
MLR and Health Care Costs (1/10/12)
AHIP Statement on National Health Expenditures Data (1/9/12)
Health Economist: “If We Ignore Rising Hospital Prices, It Is At Our Peril.” (1/3/12)
Pittsburgh Tribune-Review Examines the Impact of “Medical (Building Arms Race)” on Health
Care Costs (12/22/11)
Wide Variation in State-by-State Spending Persists (12/7/11)
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The Higher Costs of Self-Referrals (12/1/11)
Samuelson Paints a Devastating Portrait of U.S. Health Care Spending (11/28/11)
Congressman Argues in Order to End Medicare Fraud We Have to Stop Pay-and-Chase (11/18/11)
The Facts: Premiums and Underlying Medical Costs (11/17/11)
New Study Examines Why Patients May Be Getting Unnecessary Stress Tests (11/16/11)
More Evidence of the Association Between Hospital Market Concentration and Higher Prices and
Profits (11/15/11)
Cost Variation Leads to Higher Health Care Spending (11/7/11)
Could the Pen Be the Root Cause of the Health Care Cost Problem? (11/3/11)
Drug Non-Adherence Costs $290 Billion Per Year; Health Plans Have Tools to Address the
Problem (11/3/11)
Stat of the Day: $6.8 Billion Spent Yearly on 12 Unnecessary Tests and Treatments (11/1/11)