Healthcare CEOs have zipped their lips on AHCA politics
House Republicans' Affordable Care Act repeal-and-replace bill is likely to undergo serious changes before the Senate votes on the legislation. But few healthcare CEOs are wielding their influence publicly to shape the legislation that will significantly affect their companies' bottom lines and customers.
Insurer and provider executives are hiding behind industry lobbying groups, including America's Health Insurance Plans and the American Hospital Association, instead of using their power to influence lawmakers on the GOP's American Health Care Act. Their silence is a missed opportunity to serve their patients' best interests, some experts say.
"Health insurance CEOs, in particular, could be very influential if they weighed in on whether the AHCA would stabilize or destabilize the market," said Larry Levitt, senior vice president at the Kaiser Family Foundation.
Just a handful of CEOs have raised concerns about the GOP bill, which passed in the House early in May and is under consideration in the Senate, and the uncertainty caused by the Trump administration's efforts to undercut ACA reforms. It's still unclear if the administration plans to enforce the individual mandate that requires most people to enroll in coverage and fund the cost-sharing reduction payments that lower out-of-pocket costs for low-income ACA exchange enrollees.
Paul Markovich, CEO of Blue Shield of California, for example, early this month blasted congressional Republicans' bill for threatening to leave millions more Americans uninsured. After proclaiming Obamacare to be in a death spiral earlier in the year, Aetna CEO Mark Bertolini this month urged the Trump administration to give up repealing the law and fix it instead.
Great Neck, N.Y.-based Northwell Health system's CEO, Michael Dowling, told the New York Times that the GOP bill, which passed the House early this month, would drown hospitals that serve low-income patients. And the now ousted CEO Dr. J. Mario Molina of Medicaid insurer Molina Healthcare criticized the legislation for threatening to raise premiums and further destabilize the individual insurance market.
But these candid executives are rarities. Elsewhere in the industry, it's crickets. Other health insurance CEOs from companies with a big stake in Medicaid or the individual market, such as UnitedHealth, Anthem and Centene, have kept quiet despite warnings from health policy experts who say the AHCA could leave more than 20 million Americans without health insurance.
"There's been a lessening of CEOs speaking out who should be speaking out," said Bill George, a senior fellow at Harvard Business School who was CEO of medical-device maker Medtronic from 1991 to 2001. "But I think (CEOs) have an obligation because it's going to have such a dramatic effect on everyone's business."
It is possible CEOs have gone mum out of fear, George said. President Donald Trump sent the shares of Boeing and Lockheed Martin tumbling after criticizing the companies via Twitter.
"I think a lot of CEOs that I know are fearful of a Trump tweet," said George, who has served on the boards of companies including the Mayo Clinic and Novartis.
Molina told Modern Healthcare that his ousting from the company his father built could have a "chilling effect" on healthcare advocacy. He also told Politico that health plan executives fear the Trump administration. A Los Angeles Times report similarly found that healthcare CEOs aren't speaking out because they "fear retribution from the White House or its allies."
The Trump administration and the Republican-controlled Congress have the power to disrupt healthcare companies' business models, and insurers are relying on taxpayer-funded government programs as an increasing portion of their revenue. Medicaid makes up 20% and Medicare Advantage makes up 12% of U.S. insurers' total premium revenue in aggregate, according to ratings firm S&P Global.
The AHCA's provision that rolls back Medicaid expansion will take away that relatively new source of revenue for insurers.
The individual insurance market, on the other hand, represents just a small slice of insurers' revenue—less than 10% of insurers' total premium revenue.
"These companies have many issues besides the AHCA that they care about," Levitt said.
There are downsides to taking a stand. Beyond the dreaded Trump tweet, companies risk alienating investors and employees. Still, a good chunk of consumers want CEOs to speak out on controversial issues, research shows. A June 2016 study published in the Harvard Business Review found that 38% Americans believe CEOs have a responsibility to weigh in on hot-button issues.
"You have to look at who is paying your bills, and you have to act in a way that's consistent with your organization's mission" when deciding to take a stance on a political issue, said Rosemary Plorin, president and CEO of marketing firm Lovell Communications, where she helps healthcare companies manage public relations during crises, like the firing of a CEO.
The stakes are high for health insurers and their patients. Insurers are busy developing individual insurance rates for 2018. In the five states that have published 2018 rates so far—Connecticut, Maryland, Oregon, Vermont and Virginia—and the District of Columbia, insurers consistently asked for double-digit rate hikes with some requests exceeding 50%. That's in part because of the uncertainty surrounding the individual mandate enforcement and cost-sharing reduction payments.
Those 2018 rates may climb even higher if the federal government doesn't take steps to ease insurers' jitters over ACA repeal-and-replace efforts, insurers said.
"This is a very serious situation. Just as people are adjusting to the ACA, now we're going to have the AHCA, and (companies) don't know what's going to be in there," George said. "CEOs have to be engaged. I don't think they have a choice."
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.