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.


  1. griff

    An excellent article by Ron Paul on the healthcare swindle.

    There are limits to how much government can tax before it kills the host. Even worse, when government attempts to subsidize prices, it has the net effect of inflating them instead. The economic reality is that you cannot distort natural market pressures without unintended consequences. Market forces would drive prices down. Government meddling negates these pressures, adds regulatory compliance costs and layers of bureaucracy, and in the end, drives prices up.

    It is still surreal that in a free country we are talking only about HOW government should fix healthcare, rather than WHY government should fix healthcare. This should be between doctors and patients. But this has been the discussion since the 60’s and the inception of Medicare and Medicaid, when government first began intervening to keep costs down and make sure everyone had access. The result of Medicaid/Medicare price controls and regulatory burden has been to drive more doctors out of the system — making it more difficult for the poor and the elderly to receive quality care! Seemingly, there are no failed government programs, only underfunded ones. If we refuse to acknowledge common sense economics, the prescription will always be the same: more government.

  2. storky

    “Seemingly, there are no failed government programs, only underfunded ones. “

    Actually, there are many failed government programs. The illegal invasion of Iraq would qualify as one.
    We’ve also discovered that the perceived failure of previously successful programs is merely an attempt replace them with more profitable and costly privately run services. The best way to make them appear ineffective IS to underfund them.

    “My goal is to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub. — Grover Norquist”

    Don’t expect someone to effective care for or manage something they hope to destroy.

  3. storky

    They’ve also funded an Astroturf movement of half-wits to disrupt town hall meetings with Congresspersons.

    I wonder how insurance conglomerates’ bottom line would be affected if they didn’t piss away so much cash on non-productive things.

    Could they not be profitable if they actually performed the services they sell? Could they not build clientele with superior service?

    Do they not recognize that their screw-the-customer attitude is what has brought us to this debate?

  4. Siannan

    While I don’t really have a comment about this article, something about the article above, about abortion being covered, torked me. One individual described it as a “vehicle for mandating abortion” which I found extremely irritating. Based on that comment, I envisioned a woman being told by her doctor she was pregnant and when did she want to schedule her abortion.

    The reason I comment here, is that the article above had no option to comment, and I find my irritation level to great to let it go.

    Perhaps it’s time for a scotch.

  5. griff

    I don’t know why you included the Norquist quote. Never heard of him and certainly wouldn’t agree with the premise. I wonder if he was being sarcastic?

    It was the private sector that built this country. The more the government gets involved in it, the less productive it becomes.

    So you’re happy being taxed into oblivion to support a failing, parasitic system that takes more and more from the producing economy to feed its insatiable appetite for power and control?

    You’re happy that the government took the finest education system in the world and reduced it to an automated idiot factory?

    It was government intervention that took the finest healthcare system in the world and reduced it to what it is today. And you really trust them to do it right this time? To the tune of trillions of dollars?

    Have you read the bill?

    The Iraq war is a bipartisan adventure, not a government program.

  6. storky

    I quoted Norquist because the statement was both relevant and earnest. Before he got tangled up in the Jack Abramoff scandal, Grover Norquist designed George W. Bush’s tax cut policy. I’m surprised you’re not more familiar with his influence. Convenient ignorance?

    “It was the private sector that built this country. The more the government gets involved in it, the less productive it becomes.”

    Nonsense! NASA isn’t private, nor is NOAA, NIST, CDC or the NSF . Who funded the national highway system and runs our airports? Things got especially funky with Bush era paranoia and the conglomeration of private services that brought us their version of FEMA and their poor response to Katrina. Who considered hiring a Bahrainian firm to manage our shipping ports before we shamed them into reconsideration. Who hired KBR and Blackwater to supplement our soldiers in the field? Privatization of government services is far more costly and far less secure.

    With regard to productivity, how do bloated executive salaries, stock dividends, advertising dollars and extensive lobbying increase productivity? Medicare operates with 3% administrative overhead while private insurers average 30% overhead.

    “So you’re happy being taxed into oblivion to support a failing, parasitic system that takes more and more from the producing economy to feed its insatiable appetite for power and control?”

    No, I’d be happier if the higher income folks paid their fair share. Instead, those of us in the middle class pay our share AND theirs. How many jobs did Bush’s $1.7 Billion tax cut produce? Give money to people on the low end of the income spectrum and they will spend it — boosting the economy. Give tax breaks to those on the high end and they pocket it — more profit, no new jobs.

    “You’re happy that the government took the finest education system in the world and reduced it to an automated idiot factory?”

    Hell no! No Child Left Behind was another Republican concoction designed for failure — proving my point. Bush shysters hoped to demonstrate why public education should be replaced with profitable, but more costly private education. In fact, they had you paying twice: you paid for public education then again for private school vouchers.

    “It was government intervention that took the finest healthcare system in the world and reduced it to what it is today.”

    Nope, moronic deregulation and the demise of not-for-profit health services reduced our premier post-war healthcare system to the smoldering wreck it is today.

    WE’RE NUMBER 37!


    “Have you read the bill?”

    And you have?

    No I haven’t!, but I’ve followed some testimony on CSPAN (beats the hell out of Shark Week) and I have read summaries that don’t horribly distort the actual language because each discussion is accompanied by references to the section in question — there is no discussion of euthanasia.

    “The Iraq war is a bipartisan adventure, not a government program.”

    Bipartisan? Maybe, if that what its called when 61% of Democrats in the House and 42% in the Senate rejected the prospective boondoggle.

  7. griff

    How is Norquist’s quote relevant? I don’t see the connection. Paul was as critical of Bush’s policies as any Democrat was, to include myself.

    Your suggestion that this all started with Bush is ludicrous in the first place, not to mention that these policies not only remain to this day, but have been ramped up under Obama. Where’s the change?

    The rest of your comment shows a complete lack of knowledge on the subjects, but is quite an admirable collection of partisan talking points. Chalk one up for television.

    The Department of Education was formed in the early fifties. The demise of our education system began then, long before Bush and NCLB, but NCLB is a prime example of what Paul refers to. A failed system that requires more funding regardless of performance or results. Keep feeding the pig in the hopes that you’ll get steak.

    And yes, I have read the bill. I guess that’s pretty ignorant.