By David Weese
Staff writer
In a move to defeat the Obama administration’s health care bills, critics now say that six of the nation’s biggest health insurance companies are beginning to funnel behind-the-scenes money to the U.S. Chamber of Commerce to fund TV ads critical of the new health care plan.
According to the National Journal Group, Aetna (NJG), Cigna, Humana, Kaiser Foundation Health Plans, UnitedHealth Group and Wellpoint—all members of the trade group, America’s Health Insurance Plans (AHIP)—have spent between $10 and $20 million on the campaign.
The NJG says that once the money is sent to the Chamber of Commerce (COC), it is used to subsidize two business coalitions who actually run the ads. They are Campaign for Responsible Health Reform and Employers for a Healthy Economy. The ads seek to put an end to the health care bill outright, or significantly change the measures included in the bill to something more palatable to the insurance industry.
The ads claim that the bills, particularly the House version, are far too expensive, and say the bills will do nothing but raise taxes in a time that would be very detrimental to economic recovery. The ads were also critical of the move to set up a health insurance plan run by the government that would be offered alongside private insurance plans. Insurance companies complain they would not be able to compete with a plan run by the government, and would eventually have to close their doors.
The AHIP strongly denies the charge. In a letter to the Washington Post, AHIP President Karen Ignagni said, “Let me be clear and direct, health plans continue to strongly support reform. In fact, last year we proposed new insurance market rules and consumer protections to achieve universal coverage, remove restrictions on preexisting conditions and end the practice of basing premiums on health status or gender. We firmly believe that all the cost concerns the report raised can be resolved.”
But once the story broke, AHIP released the following statement. “Reform needs to make health care more affordable, particularly for small businesses that struggle to provide coverage to their employees. We share the very serious concerns employers have raised about provisions that will increase health care costs, including new premium taxes that will hit small businesses hard. So when the employer community—our customers—asked us to contribute to their campaign, we readily agreed.”
Backed by the huge business groups the National Association of Manufacturers and the National Retail Federation and the National Association of Wholesaler-Distributors, the COC has poured an estimated $70 to $100 million into the campaign to end or drastically change health care reform, the NJG said.
The AHIP commissioned a study from PricewaterhouseCoopers allegedly to refute the findings of the Senate Finance Committee. In her letter, Ignagni went on to say, “Some have questioned the timing of the report’s release. AHIP commissioned the report Sept. 29, as it became clear that the Finance Committee would gut the requirement that all individuals obtain coverage. We received the study on Saturday, Oct. 10, and shared it with our members the next day.
“The report’s central finding has long been noncontroversial in health policy and economic circles: Namely, that implementing reforms of the insurance market without a strong requirement that everyone participate will cause adverse selection and significantly increase costs for individuals and small businesses. This finding echoes the message President Obama delivered in his address to Congress last month. ‘And unless everybody does their part, many of the insurance reforms we seek—especially requiring insurance companies to cover preexisting conditions—just can’t be achieved. And that’s why under my plan, individuals will be required to carry basic health insurance,’ he said.”
Ignagni’s letter is also critical of Congress’ health care plan, as it does nothing to bring down the cost of health care itself, and penalizes those who presently have good policies
“The report concluded that the proposed new taxes on health plans, pharmaceutical manufacturers and medical-device makers will increase the cost of coverage. These findings are entirely consistent with the judgment expressed by the director of the nonpartisan Congressional Budget Office, who recently told the Senate ‘that piece of the legislation would raise insurance premiums by roughly the amount of the revenue collected.’
“The study also found that Medicare cuts enacted in the absence of systemic reforms in the way care is delivered will simply result in more costs being shifted to individuals and employers who purchase private coverage.
“The combination of these three inflationary factors would mean that in a few years, far more employees’ health plans would be subject to the new tax on comprehensive benefit packages than is currently projected, quickly turning the so-called “Cadillac” tax into a “Chevrolet” tax.
“The study clearly states that its analysis covers only these provisions and specifically notes that it did not factor in the impact of proposed premium subsidies. Nevertheless, critics have charged that the study nefariously hid the fact that it omitted provisions designed to enhance affordability, such as the subsidies and a grandfathering clause.
“Subsidies have broad bipartisan support and will clearly help many moderate-income families pay for health coverage. But subsidies will do nothing to bring down the actual cost of that coverage. Suggesting that they will is comparable to saying that Pell Grants reduce the cost of college tuition. Pell Grants provide families enormous help with the high cost of education, but they do not lower tuition levels. Meanwhile, tuition prices soar.
“The alarming implication of the study is that the proposed subsidies would not be adequate and would have to be increased as costs escalate.
“The provision that supposedly “grandfathers” people into their current plans offers limited protection against higher costs because one-third of Americans change their coverage each year. Anyone who changes jobs, gets married or divorced, has a child or moves to another state would not be protected by the grandfather clause.”
Last week, the Employers for a Healthy Economy began a new campaign of attack ads which are designed to run just as the two houses of Congress set about to reconcile their two health care bills.
“The shared promise of health care reform is guaranteeing access to affordable coverage for those outside of the system while ensuring that those who have coverage can keep what they like,” Ignagni said. “That promise can be kept only if Congress puts the nation on a path to universal coverage and confronts what lawmakers have thus far been unwilling to address: The need for tangible, effective steps to reduce the growth in health care costs and make the system sustainable for generations to come.”