UnitedHealth Lowers Advocacy Costs - Analyst Blog

In an effort to mould the legislation in its favor, health insurer UnitedHealth Group (UNH) has been reported to have spent $550,000 during the three months from July to September 2010. This amount is 46% lower than the $1.02 million spent on lobbying the federal government in the same period a year ago and 42% lower than $940,000 spent in the final quarter of 2009.

Minnesota-based UnitedHealth lobbied on the Health Care Reform and its provisions that will come into effect gradually over the next four years. Some of these provisions are expanding Medicaid eligibility, subsidizing insurance premiums, providing incentives for businesses to offer health care benefits, prohibiting the denial of coverage/claims based on pre-existing conditions, establishing health insurance exchanges and supporting medical research.

Besides advocating against the overhaul, UnitedHealth, the largest health insurer (as measured by revenues) also lobbied on – Hiring Incentives to Restore Employment Act, enacted in June 2010, aimed at providing payroll tax breaks and incentive to businesses to expand its workforce; the Unemployment Compensation Extension Act of 2010, enacted in July 2010, which extends the filing period for unemployment benefits for people adversely affected by the recent recession from 2007-2010; The Dodd–Frank Wall Street Reform and Consumer Protection Act, which was also signed in July 2010, that outlines a new risk-based approach to financial services regulation, new regulation of systemically risky institutions, increased bank supervision, limits on bank investment and related activities, heightened regulation of mortgages and increased focus on consumer protection.

Other than the Congress, UnitedHealth also lobbied the Office of Management & Budget.

Also, one of the company's peers, Humana Inc. (HUM) reduced its third quarter lobbying spending by 69% year over year to $281,000 and lobbied on the consumer privacy bill to promote transparency of the commercial use of personal information.

However, another peer Cigna Corp. (CI) increased its lobbying spending by 15% year over year to $300,000 in the third quarter. It lobbied on issues related to the Medicare Advantage and prescription drug programs and the taxation of employer-provided benefits. It also lobbied on the Open Access to Courts Act of 2009.

The companies in the health insurance sector have been exposed to the uncertainties of the Patient Protection and Affordable Care Act, which was signed into law by President Barack Obama on March 23, 2010, though the degree of vulnerability varies, depending upon the amount of exposure to the act.

UnitedHealth, which derives almost one-fourth of earnings from Medicare Advantage plan, is considerably exposed to the health care reform that has brought spending cuts in the plan. Though the actual impact of the Act on the company will be mixed, the details will become clearer as the law unfolds.

 
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