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Health Insurers Are Shifting Focus to Costs, Ignagni Says

Nov. 9 (Bloomberg) -- The health-care industry will change its focus from expanding the insurance market to reining in medical costs now that the U.S. presidential election has been decided, said Karen Ignagni, chief executive officer of America’s Health Insurance Plans.

The re-election of President Barack Obama, who campaigned to preserve his health-care system overhaul of 2010, gives the industry certainty that implementation of the Affordable Care Act will proceed, Ignagni said in an interview with Bloomberg Television’s Peter Cook for “Capitol Gains” airing Nov. 11.

“When we look at health reform we look at it through the prism of affordability and disruption,” said Ignagni, whose organization is the main Washington-based lobbying group for health insurers. It means “making sure that care is affordable a year from now and making sure that employers who are providing coverage and individuals who are buying are not disrupted.”

Obama’s signature achievement during his first term will expand health-care coverage to as many as 30 million uninsured people starting in 2014 through a sweeping law that his Republican challenger had pledged to overturn. The health law isn’t entirely free and clear as Obama and Congress face a combination of tax increases, spending cuts and a federal debt-limit increase at the end of the year called the “fiscal cliff” that will require negotiated legislation to ameliorate.

Kent Conrad, the Democrat from North Dakota who runs the Senate Budget Committee, said existing health-care programs such as Medicare and Medicaid have to be considered for spending curbs.

Premium Tax

“There’s nobody, no serious person that looks at our budget circumstance and doesn’t understand on the spending side of the equation the thing that is growing most rapidly are the entitlement accounts, especially health care,” Conrad said in an interview for the “Capitol Gains” program. “So that has to be part of any solution.”

Insurers also may seek some changes, focusing attention on the premium tax, a provision that Ignagni said is essentially a sales tax on employers and individuals buying coverage.

Ignagni said the industry is making sure members of Congress understand the challenge.

“If we want to get costs down adding a sales tax which increases costs that’s a conflicting incentive and that doesn’t make any sense,” she said.

To contact the reporter on this story: Stephanie Armour in Washington at sarmour@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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