Ivan Adler discusses the soon-to-be fierce competition over Karen Ignagni’s position as AHIP CEO.
By Anna Palmer, Jennifer Haberkorn, and Paul Demko | May 21, 2015
Karen Ignagni was the woman who could have killed Obamacare.
Instead, the nation’s top health insurance lobbyist helped President Barack Obama to pass his sweeping health reform. And she became emblematic of the compromises and controversies that still define the Affordable Care Act today.
Ignagni announced her departure from America’s Health Insurance Plans on Thursday. After more than two decades as a D.C. lobbying powerhouse, she’s going to run EmblemHealth, a big New York insurer.
She leaves at a watershed moment. Next month, the Supreme Court in King v. Burwell will decide whether people in states using the federal health exchange can keep getting government subsidies to buy insurance, or whether the financial assistance should only be allowed in states running their own Obamacare markets. A defeat for the administration would mean millions of people could lose their subsidies — and the insurance industry would face vast disruption.
It’s not her first big moment.
Ignagni was in charge of AHIP when the health insurance industry confronted its biggest policy challenge in 2009. It could kill health reform, as the health plans did during the Bill Clinton administration. Or it could embrace it — and try to shape it. Ultimately, the industry, with Ignagni at the helm, decided to back the Affordable Care Act, which reshaped how her industry operates.
“It required the insurance industry to be behind it,” said Joe Antos, a health care policy expert at the conservative American Enterprise Institute. “It was absolutely essential.”
It wasn’t always an easy alliance. It was later revealed that AHIP spent big behind the scenes to derail health reform legislation as it was being drafted, sending $86 million to the U.S. Chamber of Commerce to oppose the law. But Ignagni’s outward support helped build confidence in the drive for reform.
Ignagni’s resignation marks the latest in a string of high-profile exoduses from Washington’s most powerful health care trade associations —some of whom joined Ignagni in playing significant roles in the passage and then the implementation of the Affordable Care Act. John Castellani has announced that he will retire as president and CEO of drug trade group PhRMA at the end of the year. Rich Umbdenstock, the president and CEO of the American Hospital Association, also plans to retire this year.
But Ignagni, one of the most powerful and visible women in the lobbying industry, who received roughly $2 million in compensation in 2013, was arguably the biggest player of the three.
Some conservatives regard her as an Obamacare enabler, submitting the industry to vast government oversight in exchange for new customers receiving millions in federal subsidies. At the other end of the spectrum, progressives saw her defending for-profit insurers that made out like gangbusters under a flawed health law that could have done even more for consumers.
“She knew that the industry would do better under the law,” said Wendell Potter, a former insurance official turned consumer watchdog with the Center for Public Integrity. “She was able to envision, even with the new consumer protections, that the industry would get many billions of dollars in new revenue that can be converted into profits, and that’s exactly what’s happened.”
But neither side underestimates her power or effectiveness. She may have the calm demeanor and soothing voice of a yoga instructor, but she’s packed with the intelligence and savvy to eviscerate opponents’ policy positions with a smile.
“It’s hard not to argue that she was one of the most successful and effective advocates for an industry in the last 20 years. She’s just an absolute powerhouse shaper of policy in this town for an industry that’s not really loved,” said John Gorman, an insurance consultant and former Clinton administration official.
That lack of love was one of the levers Obama pushed as he began to stir up support for health reform. He bashed the insurers, saying lax laws and a broken system enabled them to dump customers after a cancer diagnosis or deny treatment. The industry took it on the chin, but later decided to work — most of the time — with the White House on reform.
After the law passed, much of the public animosity fell away.
There are still significant points of contention: The industry hates a health insurance tax that helps finance Obamacare, and was incensed when the administration allowed once-canceled plans to continue to operate beyond 2014, which cost the industry big bucks. AHIP has also been rallying Democratic and Republican lawmakers each year to oppose the law’s massive cuts to private Medicare health plans.
But on the regulatory minutiae required to implement a major piece of legislation, Obama administration officials and the insurance industry largely worked together on a shared goal: making an extraordinarily complicated law work in a hostile political environment.
Ignagni, who did not respond to an email Thursday, has defended the health law — though not without caveats. It provides millions of Americans with “the peace of mind that health insurance provides,” she said soon after that rough first enrollment season. But challenges of affordability and access remain. In the last few months, a lot of her focus was not on the health law but the soaring prices of prescription drugs, and the risks of rising health care prices from hospital mergers and consolidation.
People who have watched her understand why she might want to try her hand at actually running a health plan.
Jay Gellert, president and CEO of Health Net, an AHIP member company, said after all that Ignagni had accomplished in setting up the regulatory infrastructure for the ACA in Washington, she had to be tempted to play it out on the ground.
“After advocating for something like this, it’s fun to actually do it,” Gellert said. She “really believes in this broader idea of quality coverage for all.”
“She was the face of the industry when it was attacked,” Gellert said “Without compromising her beliefs, she handled all of that with integrity and dignity, and I think that was because form the start she was committed to the end point.”
AHIP’s board is launching a national search for her successor. AHIP said Dan Durham, executive vice president for strategic initiatives, was appointed as interim CEO.
Veteran headhunter Ivan Adler said the top job at AHIP — which was born out of the 2003 merger of Health Insurance Association of America and American Association of Health Plans, which Ignagni headed — will be much sought after.
“The AHIP job is one of the more sexier jobs in Washington,” Adler said. “High profile with lots of internal and external resources and the comp doesn’t hurt either.”