Tuesday, February 22, 2011
President Barack Obama embraces Health and Human Services Secretary Kathleen Sebelius, left, and House Speaker Nancy Pelosi of Calif. in the East Room of the White House after signing the health care bill into law on March 23, 2010. (AP File Photo/Charles Dharapak)
(CNSNews.com) – The Department of Health and Human Services (HHS) has granted waivers to 10 health insurance companies, including giants such as Cigna and Aetna and divisions of Blue Cross Blue Shield, from the requirements of the new health care law, also known as ObamaCare.
The waivers allow these companies to impose annual limits on the health coverage they provide to their employees. Under Obamacare, companies that do not get special waivers from the administration must phase out their caps on annual health-care benefits between now and 2014 when they must offer limitless annual benefits. The Obama administration began granting waivers to the Patient Protection and Affordable Care Act last September.
The health insurance company benefiting most from a special waiver from the Obamacare provision is Cigna Corp., which has 265,000 enrollees on its health plan. HHS approved Cigna a waiver on Sept. 26, 2010, allowing it to cap the health insurance benefits for those 265,000 employees.
(So far, among all entities recieving waivers--not just health insurance companies--the greatest single beneficiary has been the United Federation of Teachers, a union, which won a waiver from lifting the benefit cap for 351,000 enrollees.)
Ironically, shortly after the Republicans won control of the House of Representatives, Cigna CEO David M. Cordani told the Reuters news agency on Nov. 9, 2010 that he opposed the repeal of ObamaCare.
“I don’t think it’s in our society’s best interest to expend energy in repealing the law,” Cordani said speaking to the Reuters Health Summit. “Our country expended over a year of sweat equity around the formation of it.”
Cordani said then that the company was already “knee-deep” in implementing the law, but he said the law would likely need to be improved. “Our orientation is a little agnostic of how you get there,” Cordani said at the summit.
Aetna has been given a waiver that will allow it to cap the healh-care benefits of 209,423 enrollees. Its waiver took effect on Oct. 1, 2010.
“When fully implemented, the new law will have a major effect on the market,” Aetna CEO Mark Bertolini wrote in an op-ed in the Hartford Courant last March, shortly after Obama signed the legislation into law. “Individuals and small employers will have more options and choices. The private sector will do what it does best: innovate to solve problems.”
But Bertolini went on to criticize the politics played to pass the 2,074-page bill.
“Our industry played a key role in advancing many of the provisions that ultimately became part of the law,” the op-ed continued. “But somewhere along the way politics overtook policy, and health care reform became health insurance reform. This shift gave rise to political rhetoric about our industry, and the people who work in it, that has been extremely disappointing to me and to our employees most of all.”
The media relations offices with Cigna and Aetna did not return phone calls and e-mails from CNSNews.com for comment on this story.
The Department of Health and Human Services had issued 733 waivers to the health care law to corporations, labor unions, and non-profit organizations as of Jan. 26. That was up from 222 in December 2010.
The health care law eliminates annual caps on coverage by 2014. Caps are limits, on how much an insurance plan will pay in benefits for an enrollee in any given year.
For employers that do not have waivers: In 2011, yearly caps can be no less than $750,000; in 2012, limits can be no less than $1.25 million; and caps can be no less than $2 million in 2013 before being eliminated by 2014.
The waivers allow certain companies, non-profits, and unions to impose whatever annual cap they want, essentially giving the company a privilege the rest of the country’s employers do not have.
Rep. Fred Upton (R-Mich.) chariman of the powerful House Energy and Commerce Committee.
The House Energy and Commerce Committee is investigating the waivers, largely because of the high number of unions getting waivers, to determine if there was any political favoritism. More than 160 of the waivers are to unions, including the Service Employees International Union, the International Teamsters and the United Food and Commercial Workers, which have also been big contributors to Democratic campaigns.
BCS Insurance Group received a waiver that affects 115,000 enrollees. Its waiver was approved on Sept. 24, 2010. BCS Insurance Group provides health, professional liability and life policies. The company’s Web site says, “We are the premier source for insurance and reinsurance for Blue Cross and Blue Shield plans.”
Three divisions of Blue Cross Blue Shield, one of the largest insurance providers in the United States, also got waivers.
Excellus Blue Cross Blue Shield, a major insurance provider in upstate New York, received a waiver covering 18,860 enrollees that became effective in January.
Blue Cross Blue Shield of Tennessee received a waiver in January that affects 20,205 enrollees.
Highmark West Virginia Inc., also known as Mountain State Blue Cross Blue Shield, received a waiver in January affecting 270 enrollees.
Assurant Health Insurance’s 19,024 enrollees will be subject to annual limits under the waiver that became effective in January. The firm is based in New York and has been in business since 1892.
The waiver for Integra Healthcare, Inc. based in Charlotte, became effective on Jan. 1, and affects 358 enrollees.
Azeros Health Plans, Inc., formerly known as NOVA Healthcare Administrators also received a waiver covering 36 enrollees, which became effective in January. The company provides health insurance and third party administration.
First Carolina Care Insurance Company, based in North Carolina but also serving South Carolina, has 36 enrollees affected by its HHS waiver, which went into effect in January.
Politically influenced waivers?
The focus of the congressional investigation is whether politics played a role in who was granted a waiver. While the more than 160 unions on the waiver list gave disproportionately to Democrats, the corporations on the list gave to both parties, according to data from the Center for Responsive Politics. In some cases, these corporations gave more to Republicans.
President Barack Obama. (AP Photo/Carolyn Kaster)
Assurant Inc.’s PAC spent $162,740 on political contributions in 2010 -- 58 percent of that money went to Democratic candidates. In 2008, the PAC spent $210,000 for campaign contributions, with 51 percent going to Democrats. The Assurant Health CEO Donald Hamm made most of his contributions to America’s Health Insurance Plans PAC. The only candidate Hamm contributed to in the last two election cycles was Wisconsin House GOP candidate John Gard.
In 2010, the Cigna PAC spent $206,650 on campaign contributions, with 61 percent going to Republican candidates. In 2008, the Cigna PAC spent $178,500 on political contributions, with 62 percent going to Republican candidates. Cigna CEO Cordani contributed to four candidates in 2010, three of whom were Republicans.
The Aetna PAC spent $458,000 on campaign contributions in 2010, with 68 percent of those contributions going to Republican candidates. In 2008, Aetna spent $241,750 on campaign contributions, with 64 percent going to Republicans.
Aetna CEO Mark Bertolini contributed money to the 2010 campaign of Sen. Charles Schumer (D-N.Y.), Sen. Ron Wyden (D-Ore.), 2010 Ohio Democratic Senate candidate Lee Irwin Fisher, and Rob Simmons, a Republican who sought the 2010 Republican Senate nomination in Connecticut.
The Blue Cross Blue Shield PAC spent $429,425 in campaign contributions in 2010, and 57 percent of those donations went to Republican candidates. In 2008, the PAC spent $345,250 on political contributions, with 53 percent going to Republican candidates.