Lobbying expenses declined for most health insurance companies, such as Humana Inc. (HUM - Analyst Report) and Aetna Inc. (AET - Analyst Report), in the second quarter of 2011.
Particularly, Humana spent only $180,000 on lobbying, which was only two-thirds of the amount spent on lobbying in the year-ago quarter and 65% of the amount spent in the first quarter of 2011, in the second quarter of the year.
Most of the costs were focused on the health-care reform bill passed last year, the FIT Kids Act, the Small Business Health Relief Act of 2011 and the Medicare Data Access for Transparency and Accountability Act.
Humana also lobbied against the annual fees imposed by the health-care reform bill on health insurance companies along with various other charges and restrictions.
The health-care overhaul-related bill was passed last year to protect the Americans who do not have health insurance. It aims to cover over a million uninsured people. While the bill is expected to bring in new business for health insurance companies, it imposes a lot of restrictions and fees on them, thereby inviting disapproval from such companies.
Meanwhile, rival health insurance company Aetna spent $902,453 on lobbying in the second quarter of 2011, showing a 42% decline from the amount spent in the prior-year quarter and a 17% decline from the first quarter of the year.
Aetna lobbied against the health-care reform bill, which seems to have become a cause of concern for all health insurance companies. The company lobbied for a legislation to withdraw the bill?s directive requiring the insurance of all Americans. Aetna also lobbied against the minimum medical-loss ratio imposed by the bill as well as the mandate to spend a fixed portion of the premiums collected either on patient care or as refunds to the insured person.
Additionally, the company lobbied for bills to exclude brokers? compensation from the calculation of the above mentioned premiums, allow the Department of Health and Human Services to directly negotiate drug prices and allow the establishment of a Medicare Part D prescription drug program and an insurance marketplace on a national scale.
Both Aetna and Humana lobbied the Congress, the White House and the Centers for Medicare and Medicaid Services. In addition, Aetna lobbied the Department of Health and Human Services.
CIGNA Corporation (CI - Analyst Report), another health insurance rival of both Humana and Aetna, spent $380,000 on lobbying in the second quarter of the year, showing a 32% decline from the year-ago quarter but a 36% increase from lobbing expenses in the first quarter of 2011.
While the reduced expenses helped in improving the bottom-line of the companies, successful lobbying can have a more long-lasting effect on income. Lawmakers receive huge contributions from health insurance companies and effective lobbying can lead to favorable changes in the law, leading to long-term benefits for the companies.
Both Aetna and CIGNA currently carry a Zacks #2 Rank, implying a short-term Buy rating, while Humana carries a Zacks #1 Rank, which translates into a Strong Buy rating for the short-term.
Read the full analyst report on AET
Read the full analyst report on HUM
Read the full analyst report on CI
??Includes Zacks Long-Term Recommendation and Target Price
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Source: http://www.zacks.com/stock/news/59311/Insurance+Cos+Cut+Lobbying+Costs
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