The chief lobbyist for American health insurance is taking a job at a regional nonprofit insurer, after shaping a once-in-a-generation reform aimed at benefiting both the public and the industry.
Karen Ignagni is stepping down from her long-time post as president and CEO of America's Health Insurance Plans, and in September becoming CEO of New York's EmblemHealth, replacing Frank Branchini.
"As the voice of our industry, she has worked tirelessly on our behalf with acumen that is unmatched," said AHIP board chair Mark Ganz, CEO of Cambia Health Solutions, the Regence Blues insurer.
"I am honored to join this unique not-for-profit health plan at such an important time," Ignagni said of EmblemHealth, parent company of Group Health Incorporated and HIP Health Plan of New York. "I look forward to working with Frank Branchini and our entire Board of Directors as we continue our commitment to serving diverse communities across New York."
Ignagni, now age 61, has led AHIP for more than 20 years--indeed before it was AHIP--and represented an industry that was sometimes at odds with the Democratic Party, of which she was a self-described life-long member
A graduate of Providence College in her native Rhode Island, Ignagni started her career in 1975 as a healthcare analyst at the Department of Health, Education and Welfare. From 1977 to 1979, she worked at the union-led Committee for National Health Insurance, then as a legislative aide to Democrat Claiborne Pell, Rhode Island's longest-serving Senator.
Ignagni earned an MBA from Loyola in Maryland and spent the eighties and early nineties directing the AFL-CIO's Department of Employee Benefits. Then in 1993 she took the job of president and CEO of the American Association of Health Plans, which represented mostly large managed care companies and in 2003 merged with the Health Insurance Association of America.
Ignagni led some of the opposition to the last major pre-ACA attempt at healthcare reform, Bill and Hillary Clinton's Health Security Act of 1993, although it was the HIAA that sponsored the famous "Harry and Louise" television ad campaign featuring the slogan "They choose, we lose."
Legacy of the subsidized private-option for universal coverage
By the late 2000s, with many trillions of dollars in national healthcare spending, but millions of Americans still uninsured and many consumer complaints about coverage denials and getting "kicked off" health plans just when they needed them, Democrats like President Obama were espousing the benefits of a publicly-run health plan or even "Medicare for all" single payer.
Rather than fighting the specter of any changes, Ignagni "helped convince her industry that merely standing in opposition would be a dangerous risk," as the Boston Globe wrote in 2009. Ignagni wanted to convince health insurers "that the right changes could help the industry not just survive but prosper."
James Roosevelt, the long-time CEO of Tufts Health Plan and an AHIP board member, told the Globe at the time that Ignagni has, "by her intellect and by force of personality, led these pretty powerful executives to understanding both that they can participate in what is going on and that they should, because their companies will survive if the Congress and the White House understand what's necessary to give people private insurance choices."
Responding to the idea of a "public option" health plan that Americans under 65 could opt into, Ignagni told the Senate Finance Committee in 2009 that a "government-run plan--no matter how it is initially structured--would dismantle employer-based coverage, significantly increasing costs for those who remain in private coverage, and add additional liabilities to the federal deficit."
Ignagni was in the tough position of at once defending and promoting an industry while also acknowledging that it needed reforms.
As Obama was advocating for a public option in 2009, he recounted how his mother Ann Dunham died at the age of 52 with ovarian cancer, covered by a new health plan thanks to a recent job change but spending her last days "having to worry about whether her insurance would refuse to pay for her treatment." Dunham's employer-sponsored health plan actually paid for the treatment, with her responsible for several hundred dollars in monthly out-of-pocket costs. Her dispute was with a new disability benefits plan, which denied her expenses on the grounds of the cancer being a preexisting condition.
Nonetheless, Ignagni addressed the frustration Americans had with health insurance as they knew it. "The president and his mother lived through something that we have worked so hard to prevent" and the industry should "make sure that never happens to a family in this country again," she said at the time.
Ignagni saw the ACA as a huge chance to both reform the insurance industry and expand its business, a conclusion she came to after reading "Fiasco,'' Thomas Ricks's account of the Iraq War. "I think that every CEO ought to read books like that, because it's a story about missed opportunities and wrong decisions," Ignagni told the Globe.
Five years later, Ignagni is leaving AHIP amid a health reform law that offers both new business and challenges to the traditional health insurance model. Amid new essential health benefits mandates, competition from provider-sponsored plans, the looming Cadillac Tax and the ongoing decline of employer-sponsored insurance, the largest health insurance growth markets are hybrid public-private healthcare programs--the ACA exchanges, Medicaid managed care, and Medicare Advantage, health plans for the baby boomers.
Stepping into Ignagni's place on an interim basis at AHIP is Dan Durham, the current executive VP for Strategic Initiatives. Durham came to AHIP in 2010, following five years as policy VP for another major healthcare trade group, Pharmaceutical Research and Manufacturers of America.
Ignagni is part of a sort of changing of the guard among top healthcare lobbyists. Richard Umbdenstock, the CEO of American Hospital Association, is retiring at the end of 2015, along with John Castellani, CEO of the PhRMA.