Insurers lay out cash to buy Congress

As the nation faces a political showdown over health-insurance reform, insurers worried that an overhaul could hurt their bottom line are funneling a wave of cash to members of Congress.

Health and accident insurers and HMOs have spent more than $40 million on current members of Congress over the past 10 years, according to the Center for Responsive Politics, which analyzed Federal Election Commission data.

They’ve also spent an additional half-billion dollars lobbying during the decade.

Insurers ramped up their contributions in 2008 when health-care reform emerged as a major campaign issue. So far, the insurance industry has given $3.9 million this year.

All of that spending is intended to impress members of Congress facing major decisions on reform proposals.

Health insurers worry that a "public option" favored by President Obama and House Democrats could hurt private competitors and even drive some out of business.

Obama appeared to take direct aim at insurers in a town-hall meeting last week, when he said that the $177 billion the government spends on Medicare Advantage, a private-sector version of Medicare, offered no real advantage and could be redirected to health-care reform.

Insurers find themselves ever more isolated in the national health-care debate since their former allies — the pharmaceutical and hospital industries — have struck their own partial and tentative agreements with the White House and some Democratic members of Congress.

House Speaker Nancy Pelosi, D-Calif., labeled health insurers "villains," saying that "they have been a part of the problem in a major way. They are doing everything in their power to stop a public option from happening."

That level of rancor does not surprise Stephen Parente, an expert on health economics at the Carlson School of Management in Minneapolis and a former health adviser to Republican presidential candidate John McCain.

"There’s not a lot of love right now on both sides of the aisle for the insurers," Parente said. "I’d say of all the parties involved … their stock has gone down."

That status is deserved, said Eleanor Kinney, an Indiana University professor who has tracked health-care reform and testified before Congress. Kinney said private insurers benefit hugely from tax policies that subsidize employer insurance costs and shield the insurers from often-expensive claims by the elderly and poor paid by Medicaid and Medicare.

"If you rely on such an extensive public subsidy, there is not necessarily a right to make a profit," Kinney said.

As Congress nears its August recess, the industry’s point of view has been heard repeatedly. The proposal for a government alternative to private health insurance has met strong opposition from Republicans.

Other health-related industries might feel less threatened by changes in health-care policy than insurers. The American Medical Association in July endorsed the House Democrats’ bill after winning concessions that included better Medicare reimbursement rates for doctors. They are withholding final judgment on the bill, which is still taking shape.

Doctors, nurses and other health professionals have also given robustly: $6.2 million to Congress in the first half of 2009.

And donors from pharmaceuticals and health-care products gave $2.1 million this year to Congress.

As part of its deal with the administration, drug companies have said they are willing to cut in half prescription prices to seniors whose medicines aren’t covered under Medicare. However, they continue to seek concessions on other issues.