The decision last week to hire Marilyn Tavenner as CEO of America's Health Insurance Plans signals that the powerful lobbying group has accepted the Affordable Care Act as the new business environment and that it wants a CMS insider to help during the next phase of market development.
Her selection was criticized by many observers as an example of the revolving door between the federal government and the private sector, which creates potential conflicts of interest for government officials. But it will give the insurance group, which recently lost its biggest member and faces declining revenue, the opportunity to refresh its image and operations.
Tavenner, 64, a former hospital system executive, stepped down in February as CMS administrator. She succeeds the widely respected Karen Ignagni, AHIP's longtime CEO, who is leaving for EmblemHealth, a financially troubled not-for-profit health insurer in New York.
The group wanted a “high-profile” replacement for Ignagni, said Kip Piper, a Washington-based health insurance consultant. As a top Obama administration official overseeing Medicare, Medicaid and ACA implementation, “her government experience will be invaluable to AHIP given how rapidly the public sector is dominating the financial, market and regulatory facets of health plans,” Piper said.
Tavenner's appointment also signals the insurance industry's confidence that the ACA is here to stay following last month's U.S. Supreme Court ruling upholding the law's premium subsidies, experts said. Health plans want someone who can help them adapt to and benefit from the law. She also has solid ties to Republican leaders, which could help AHIP if Republicans win the White House in the 2016 election.
Under Ignagni, AHIP voiced support for the ACA and its key insurance provisions, including the individual mandate. But AHIP fiercely fought medical-loss ratios, Medicare Advantage cuts and other provisions that ate away at profits. The group played both sides of the fence, funding the U.S. Chamber of Commerce in opposing the law.
“The ACA is now business, whereas during its passage, it was seen as a threat by AHIP,” said Larry Jacobs, a political science and health policy professor at the University of Minnesota. “This (hire) is a signal change.”