Nov. 29 (Bloomberg) -- Aetna Inc. and other insurers that initially fought President Barack Obama’s health-care overhaul are reversing course and supporting the effort by funding a group planning to spend $100 million to help the uninsured get coverage under the law.
Enroll America, a nonprofit created two years ago, has gathered support from the insurers that opposed the law and consumer organizations such as Washington-based Families USA that supported it. The new organization plans a broad-based educational campaign to make uninsured people aware of the health-care law’s benefits and help them sign up, said Ron Pollack, Enroll America’s chairman.
The group will reach out to the 43 million uninsured whose participation will help strengthen the funding formula that holds the 2010 Affordable Care Act together. The new customers are expected to help offset added costs for the insurers from new regulations and taxes included in the law.
“Business people in the end have to be pragmatic,” Robert Laszewski, a health insurance industry consultant based in Alexandria, Virginia, said of the companies’ efforts to help the law succeed. “The industry has gotten over it.”
After October 2013, uninsured Americans will be able to buy insurance through state marketplaces, called exchanges, which will be run somewhat like online travel services. People who don’t get insurance through their employers will be able to use the exchanges to shop among a selection of health plans from private insurers, often with taxpayer-subsidized premiums.
9 Million Enrollees
About 9 million people are expected to enroll in exchange plans in 2014, according to the Congressional Budget Office, increasing to 26 million by 2018. The exchanges also will route people with incomes close to the poverty level into Medicaid, projected to enroll 41 million people in 2014.
“You want to mimic the success of employer plans, in which everyone is enrolled when they take a job,” said Sara Collins, a vice president at the Commonwealth Fund in New York, in a telephone interview. “It will be essential that everyone comes in to get the coverage that they’re eligible for.”
The federal government has encouraged states to build and operate their own exchanges. Republican governors in 16 states had refused as of Nov. 19 and will let the Obama administration build their exchanges instead, according to the nonprofit Kaiser Family Foundation, based in Menlo Park, California.
Rachel Klein, Enroll America’s executive director, said the group may target states whose governors have said they won’t build exchanges or expand Medicaid, such as Texas, home to about 12 percent of the nation’s uninsured. So far the group has raised about $6 million, she said in an interview.
The $100 million the group seeks to raise in 2013 and 2014 will be used for advertising, social media and other activities to make people aware of the health-care law’s benefits and help them sign up, said Pollack, who also is executive director of Families USA.
People going to the exchanges for the first time probably will need help, he said, and the government will hire guides to assist the sign-up process.
“Many of them have not had meaningful contact with health insurance in quite some time,” Pollack said. Enroll America also plans to provide information to make it easier for people to sign up for coverage.
The alliance reflects the health insurance industry’s conflicted relationship with the law. While the act promises to deliver millions of new customers, companies can no longer refuse to cover people who are sick, and they face greater regulation by states and the federal government and a fee they oppose to help cover the cost of subsidies.
Insurers have “always been strongly in support of the broadest possible coverage expansion,” said Mike Tuffin, a former insurance industry official who is managing director of the Washington office for the APCO Worldwide consulting firm. “The industry and supporters of the law alike need participation in the system for this law to work.”
Open support for Enroll America is a pivot for the insurance industry, which gave $86.2 million to the U.S. Chamber of Commerce in 2009 through its Washington lobbying group to campaign against the health-care law.
Aetna, the fourth-biggest health plan by sales, gave more than $7 million in 2011 to the Chamber and to the American Action Forum, a Washington-based advocacy group that opposed the law and other Obama initiatives, according to filings with the National Association of Insurance Commissioners first reported by SNL Financial. Now, the company is listed on Enroll America’s website as a member of the group’s advisory council.
The for-profit insurance industry’s support has so far been confined to startup funding. There is no indication whether they’ll follow their initial funding with more money later.
America’s Health Insurance Plans, the industry’s Washington-based lobbyist group, and Aetna each contributed $100,000 to Enroll America, while UnitedHealth Group Inc., the largest U.S. health insurer by sales, has given $50,000, Pollack said.
Aetna spokesman Matthew Wiggin said in an e-mail today that the company’s grant “funded work including identification of enrollment best practices in all 50 states.” He didn’t immediately respond to a question asking if the company would give more.
The United Health Foundation, a nonprofit funded by the company, gave money for “a business plan to figure out how to get people enrolled” under the health law, said Matt Stearns, a spokesman for UnitedHealth. He declined to say whether Enroll America would get more money in the future from the company.
While AHIP contributed to Enroll America when it started, the insurance group hasn’t participated since, Robert Zirkelbach, a spokesman, said in an e-mail. He declined to say whether they’ll support the group in the future.
“This is a mountain of a task,” Enroll America’s Klein said. “It’s going to be hard to overestimate what needs to be done in order to reach all of these folks and get as many of them covered as possible in a very short turnaround.”
Enroll America’s 10 largest donors have all given “six figures” but not more than $1 million, Klein said.
Nonprofit health plans that have contributed include the Blue Cross Blue Shield Association, which represents 38 state health plans; Blue Shield of California; Oakland, California-based Kaiser Permanente; and CareSource, a Dayton, Ohio-based insurer that focuses on Medicaid. Non-insurer donors include The Pharmaceutical Research and Manufacturers of America, the American Hospital Association and Petach Tikva, Israel-based Teva Pharmaceutical Industries, the world’s biggest generic-drug maker.
Drug companies and hospitals have been more supportive of the health law, which promises them millions of new insured customers. Enroll America is collaborating with the U.S. Department of Health and Human Services and states such as California that plan their own publicity efforts around the law.
“The work to ensure more Americans have health insurance will benefit from as much help, experience, energy and resources as possible,” Erin Shields Britt, a Health and Human Services Department spokeswoman, said in an e-mail.
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