Marilyn Tavenner left the Centers for Medicare and Medicaid Services in January. HEALTH CARE Former Medicare chief to head health insurance lobby AHIP

Former Medicare chief Marilyn Tavenner has been hired as the new CEO of America’s Health Insurance Plans, representing an industry that she helped regulate during the turbulent launch of Obamacare.

The powerful K Street lobbying group’s announcement Wednesday comes months after Tavenner, a nurse and former hospital CEO, stepped down as the administrator of the Centers for Medicare and Medicaid Services. At the agency, she was responsible for writing many of Obamacare’s rules and oversaw the troubled rollout — and repair — of the HealthCare.gov enrollment website.


She’ll now lead an industry that’s lost its longtime leader, Karen Ignagni, a K Street powerhouse who navigated the industry through Obamacare’s massive overhaul and left this summer to run a New York insurer. Ignagni helped build support for the health law among insurers, a contrast to when the health plans helped kill President Bill and Hillary Clinton’s health reform effort in the 1990s.

Tavenner, who starts in August, takes over at a time of change and challenge for AHIP and the health insurance industry. The nation’s largest health insurer just left AHIP, major insurance mergers are on the horizon, and hardline Republicans are still dedicated to repealing a health-care law the industry is still learning to live with.

But AHIP’s decision to hire a former Obama administration official as its next leader also signals that health insurers are committed to the health reform law.

“This choice, combined with the widespread participation by major insurers in the ACA’s marketplaces, signals that the industry is all in with Obamacare,” said Larry Levitt of the Kaiser Family Foundation.

Tavenner, who was the first Senate-confirmed CMS administrator in almost a decade, is well-regarded by Republicans and Democrats on Capitol Hill. Her nomination to run the agency was very publicly supported by former House Majority Leader Eric Cantor, a fellow Virginian. Despite her role in implementing the president’s divisive heath-care plan, she was approved by the Senate in an overwhelmingly bipartisan vote, 91-7.

“There is no better individual than Marilyn to lead our industry through the increasingly complex health care transformation that is underway,” said AHIP board chairman Mark Ganz in a statement. “She has the respect and trust of policymakers and stakeholders from all sides, and a personal commitment to advance meaningful solutions for improving access to quality, affordable care for all Americans.”

AHIP has provided a unified industry voice on Capitol Hill during the turbulent Obamacare era and played a pivotal role in the health law’s implementation. Health insurers, once a favorite political target of Democrats, over the past few years have worked closely with the Obama administration on the Affordable Care Act and its broader plans to improve health care through an overhaul of how the country pays for services.

After UnitedHealth Group’s exit from AHIP there are questions about fissures. Representing the interests of both nonprofit carriers and the big national for-profit players has become increasingly challenging as insurers seek their footing in the overhauled insurance landscape.

“You’re herding cats, from the very smallest plans to the very largest plans,” said William Hoagland, who served as Cigna’s vice president for public policy from 2007 to 2012 and is now at the Bipartisan Policy Center, said recently. “Finding consensus among those plans is a difficult exercise.”

The changes at AHIP also come amid major upheaval for the insurance industry, with a wave of mergers reshaping the marketplace. Earlier this month, Aetna announced it would purchase Humana for $37 billion. And Anthem has offered to buy Cigna for $54 billion.

The Affordable Care Act has been a mixed bag financially for insurers, said Robert Laszewski, an industry consultant. The expansion of Medicaid and the continued growth of private Medicare plans have been a boon for insurers, he noted. But the law’s new health insurance exchanges have been more troublesome for health plans, many of which are seeking greater rate hikes in 2016.

“They’re getting creamed,” Laszewski said of health plans selling on the exchanges. “Any time you see a rate increase above 7, 8, 9 percent, they’re losing money.”

But the growth in private Medicare Advantage plans has been an especially bright spot for insurers in recent years, and AHIP has been a tenacious advocate — fighting off payment cuts that Tavenner’s agency had proposed. More than 30 percent of Medicare beneficiaries, or roughly 17 million senior citizens, are now enrolled in private plans, creating a powerful bipartisan constituency group on Capitol Hill.

Tavenner can push the group’s agenda in Congress, but she won’t be able to lobby with the federal agency that she oversaw. That restriction shouldn’t present too much of a hurdle to being an effective advocate for the industry, said Meredith McGehee, policy director for the Campaign Legal Center.

“There are minions that have low-heeled shoes that go do that part,” she said. “K Street is full of those people.”

Tavenner’s predecessor, Ignagni, received total compensation of just over $2 million in 2013, according to AHIP’s most recently available tax return.

Jennifer Haberkorn contributed to this story.