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Obama And Health Insurers Eye Each Other Warily

Evan Vucci
President Obama makes a statement in the Roosevelt Room of the White House on Friday, before the start of a meeting with representatives of health insurance companies. The president said he brought health insurance CEOs to the White House to brainstorm ways to make sure Americans know what their coverage options are under the law.

In "The Defiant Ones," a classic film directed by Stanley Kramer, two escapees from a Southern chain gang hated each other but were handcuffed together, meaning they could survive only by working together.

Which is pretty much a metaphor for where President Obama and insurance company executives have found themselves all along with the Affordable Care Act.

When Obama decided that private health insurers would play a major role in health overhaul, he linked the success of his signature domestic policy initiative to the same industry that tried at first to keep the Affordable Care Act from happening.


For their part, insurance executives hated many parts of the law, like a sales tax on health insurance. They also feel abused by a president who they believe has repeatedly and unfairly demonized them while keeping them out of the loop.

But they love the thought of the law's individual mandate driving millions of more customers their way.

In short, there may be no love lost and lots of mutual distrust between Obama and the insurance industry, but they need each other -- now more than ever.

"You've got strange bedfellows. You've got this industry that wants this to succeed and you've got an administration that has zero trust in the health insurance industry" said Robert Laszewski, a health care consultant, in an interview.

"It is a bizarre set of circumstances where the industry is in bed with these guys and has to stay in bed with these guys," said Laszewski, one of the top go-to experts for journalists.


"What the insurance industry wants is stability," he said. "It wants to get health insurance reform behind us. People in the industry know it's never going to be perfect, it's never going to be what they want. And Obamacare is full of flaws. But it's not single payer and it wasn't the public option. They got something in broad brush strokes, something they could live with. In detail, they got a bunch of crap they're going to have to deal with, [like] the cancellations."

On Friday, Obama met industry executives at the White House, one day after he announced he would issue an administrative fix to let insurers keep selling health plans that don't meet the bare minimum required by the new health care law.

The problem is that the cancellation notices to hundreds of thousands of Americans -- blamed on Obamacare -- have become a growing political liability to the president and Democrats. That's especially true since Obama repeatedly pledged that under the health law Americans would be able to keep health plans they liked.

The timing of Friday's meeting was emblematic of the bad blood between the president and the insurance industry. It came after, not before, Obama's Thursday announcement. Insurance industry officials told journalists they didn't learn the details of the president's plan to deal with the insurance policy cancellation issue until everyone else did.

Meanwhile, the president's fix put insurers in one. He was attempting to shift the blame from his administration to them. And in doing so, he put them in the complicated position of trying to unring the bell on hundreds of thousands of cancellations.

"This is a bare knuckles political move trying to throw the hot potato in the insurance industry's seat," Laszewski said.

White House press secretary Jay Carney rejected the accusation that having the insurers in the day after the president unveiled his solution was problematic.

"It is absolutely the case that we have been in consultation with and have numerous -- have had numerous meetings with insurance companies over the course of the last several years with the drafting and passing and implementation of the Affordable Care Act. So -- and those consultations continue," he told reporters Friday.

It is also "absolutely the case" that there's been much ugliness during those past several years. Example: Back in 2009, after the health insurance industry ran negative ads against Obama's health reform effort, the president called the advertising campaign "deceptive and dishonest."

It was all part of the general wariness between Democrats and much of the insurance industry that long predates Obama, dating back decades.

Insurance executives have long donated significantly more money to Republicans than Democrats. From 1990 to the current 2014 cycle, insurers have made 63 percent of their political donations to Republicans versus 37 percent to Democrats, according to Open Secrets.

Some of that money kept an earlier attempt at overhauling health insurance from happening during the Clinton administration. While it didn't stop Obamacare from becoming law, many of those political contributions from insurance officials are going to Republican lawmakers who have sought the repeal of the very law with the individual mandates prized by insurers.

It's just another example of how Washington is a place with its own special logic.

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