Federal Politics

Published — October 4, 2012 Updated — May 19, 2014 at 12:19 pm ET

Health insurance PACs have love-hate relationship with health care reform

Republican congressmen Eric Cantor of Va., left, and John Boehner of Ohio, listen as President Barack Obama delivers a speech on health care to a joint session of Congress in 2009. Pablo Martinez Monsivais/AP

GOP House members top recipients of health insurance donations

Introduction

The health insurance industry presented itself as a key ally of President Barack Obama’s health care law while at the same time making hefty contributions to members of Congress who are trying to get rid of it, according to contribution records.

Between January of 2007 and August of 2012, the political action committees of the 11 largest health insurance companies and their primary trade group gave $10.2 million to federal politicians with nearly two-thirds of the total going to Republicans who oppose the law or support its repeal, according to the Center for Public Integrity’s analysis of Federal Election Commission filings.

The 11 top companies, according to the Fortune 500 list, controlled 35 percent of the industry in 2011, according to data from the National Association of Insurance Commissioners. The top industry trade group is America’s Health Insurance Plans.

Much of the money rolled in as health insurance industry leaders lauded the Democrats’ reform efforts.

“We are ready to be accountable to these [new] rules,” Karen Ignagni, AHIP’s president and CEO told the Senate Finance Committee in May 2009, almost a year before Obama’s landmark legislation was signed into law. And a month after Obama’s Affordable Care Act became law in March 2010, Ignagni said her organization was “strongly committed” to [its] “successful implementation.”

Likewise, Ron Williams, then chairman and CEO of Aetna, the country’s fifth-largest health insurance company, also spoke favorably about the bill — at first.

“I believe that President Obama and this Congress have charted a course of change,” Williams said in a June 2009 statement. “I want to make clear that we too are committed to expanding access, controlling costs and improving the quality and value of care people receive.”

But Williams, who left Aetna in April 2011, has since changed his mind. This past June, Williams penned a Wall Street Journal op-ed calling for health care reform at the state level and criticizing the federal law’s mandate.

Cantor, Ryan among top beneficiaries

House Majority Leader Eric Cantor, R-Va., ranks as the top recipient of PAC money from the top insurers since 2007, according to the Center’s analysis. Cantor, a tea party favorite and one of the law’s most vocal critics, has received about $258,000 from AHIP and the top industry PACs.

In January 2011, Cantor introduced the “Repealing the Job-Killing Health Care Law Act,” the first of 33 repeal efforts that have reached the House floor.

That same year, Aetna, Humana, UnitedHealth Group and WellPoint — which together control 28 percent of the health insurance market — maxed out to Cantor, giving $10,000 apiece to his campaign committee. That doesn’t include additional sums that went into the congressman’s leadership PAC.

Behind Cantor, Rep. David Camp, R-Mich., ranks second in health insurance industry contributions. The chairman of the powerful House Ways and Means Committee has pulled in more than $234,000 from these PACs since 2007.

“The American people have told us they don’t want to be forced to buy health insurance that they don’t want and they can’t afford,” Camp declared in February 2010. A year later, Camp sponsored a bill that would cut $11.6 billion in funding for the law.

Rep. Paul Ryan, R-Wis., now the Republican nominee for vice president Mitt Romney’s running mate, is also among the top recipients of funds from health insurance companies and a leader in House’s efforts to repeal the health care law.

The dozen PACs studied by the Center donated $187,000 to Ryan between 2007 and 2012, placing the Wisconsin congressman fourth on the list. Just this year, Ryan, who chairs the influential House Budget Committee, has sponsored two major budget plans that have called for the law’s repeal.

Other top recipients of health insurance PAC money during this period include House Speaker John Boehner ($209,500), Republican House Whip Kevin McCarthy of California ($149,700), Sen. Orrin Hatch, R-Utah, who is the ranking GOP member of the Senate Finance Committee ($151,500), and Senate Finance Committee Chairman Max Baucus, D-Mont. ($142,400).

Why back the repeal?

So if the health insurance industry was in favor of key parts of the law, why is it supporting members of Congress who are so bent on killing it?

Part of the reason is that the legislation’s centerpiece, the requirement that almost everyone sign up for health insurance or pay a penalty, is expected to benefit the health insurance industry. Democrats supported the provision; Republicans despise it — despite its origins as a conservative idea.

More than two decades ago, an individual health insurance mandate was proposed by Stuart M. Butler of the conservative Heritage Foundation. During the 1993 health care debate, Republican lawmakers supported legislation that included an individual mandate. And the idea was endorsed by Republican Mitt Romney during his reforms as governor of Massachusetts.

During Congress’ recent debate over health care reform, the industry was “playing supporters because there is nothing the health insurance industry wanted more than an individual mandate to force people to buy their product,” says Carmen Balber, who monitors health policy at the nonprofit Consumer Watchdog.

At the time the reform law passed, the Democratic Party controlled the White House and both houses of Congress. By supporting the law, the industry was able to stay in the game on a very complex piece of legislation.

While the industry certainly did support parts of the law — such as the individual mandate — there were plenty of provisions it did not like and would like to see repealed.

AHIP and WellPoint — the industry’s top PAC contributor — did not reply to the Center’s telephone or email inquiries requesting comment. Representatives from Aetna, Amerigroup, Cigna and Humana declined to comment for this story.

Ethan Rome, executive director at Health Care for America Now, a health-care-reform advocacy group, suspects that the industry views support of Republican candidates — who will undoubtedly vote for deregulation — as a long-term investment.

For example, under the new law, insurance companies must spend at least 80 cents of every premium dollar on medical care for individual and small business policyholders — and 85 cents for large groups. That’s a provision the industry would like to see repealed.

Insurers must send policyholders or their employers rebate checks if the ratio drops below those levels.

In recent statements, AHIP claims the provision, known as the “medical loss ratio requirement,” could inhibit innovation and drive up administrative costs because of new reporting requirements.

Indeed, AHIP has lobbied extensively for a new bill that — according to Consumer Watchdog’s Balber — “would effectively gut the medical loss ratio requirement,” by allowing insurance companies to include broker compensation as a medical care cost in the ratio.

This legislation, introduced as H.R. 1206, is sponsored by Rep. Mike Rogers, R-Mich., and was forwarded to the House Energy and Commerce Committee on Sept. 11. Rogers ranks 19th on the Center’s list of top health insurance beneficiaries, receiving $90,500 over the nearly six-year period. AHIP supports Rogers’ bill, as do several trade associations representing brokers and agents, claiming broker salaries commissions are not necessarily administrative costs, but rather a “human resource” expense because independent brokers and agents help patients select plans.

But to Balber, factoring insurance broker salaries as a medical cost — and thus, part of the 80 percent requirement — is “absurd.” Such a shift in premium calculation would negate the cost-cutting benefits of the medical loss ratio provision — what she considers the law’s strongest consumer protection.

Looking forward

Since the Democrats’ Affordable Care Act was signed into law, the political environment has changed dramatically.

Democrats no longer hold a filibuster-proof majority in the Senate, the House is controlled by Republicans and the president is in a tight race for re-election.

Despite his party’s unified attack on the health care law, Romney, whose own health insurance reforms in Massachusetts were a model for Obama’s plan, has recently hinted at willingness to compromise on some of its politically popular elements.

“Well, I’m not getting rid of all of health care reform,” Romney, the GOP’s presidential nominee, said in a Sept.9 interview with David Gregory on NBC’s Meet the Press.

While the individual mandate is widely viewed as unpopular, the opposite is true for many provisions such as the prohibition on companies refusing to cover patients with pre-existing conditions, the closing of the Medicare Part D prescription drug “donut hole” and the option for young adults to stay on their parent’s plan until age 26.

According to Bob Laszewski, an insurance industry consultant, a Romney administration would not be able to secure enough votes in the Senate to repeal the law, even if it wanted to.

A more realistic legislative outcome is that congressional Republicans will attempt to defund the law through budget reconciliation rules — a scenario that would likely hurt insurance company balance sheets, he said.

GOP defunding efforts would leave insurance companies subject to the law’s politically popular insurance regulations — like covering patients with pre-existing conditions — but without government subsidies that are provided in some parts of the plan.

“If Romney wins, I think you’re going to see the insurance industry very concerned about Republicans trying to choke health care reform,” Laszewski said.

Andrea Fuller, Lydia Mulvaney and Michael Beckel contributed to this report. Graphic design by Paul Williams.

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Mark Sullivan
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Mark Sullivan

Trump needs to conduct these activities because the entire MSM media, excluding Fox, is campaigning against him 24/7/365.

Didn’t Monica’s boyfriend’s wife and various criminal enterprises outspend Trump by almost 2-1?

CapitalistRoader
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CapitalistRoader

Why wouldn’t he get an early start on fund raising? Hillary outspent him two-to-one in 2016. The Dem’s are the party of big money. The President knows this and is attempting to get a jump on it. Of course the Dem candidate will outspend him in 2020 so it’s only rational that he starts fund raising now.

George Young
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George Young

Oh brother. We just 8 years of the Campaigner – in – Chief. Where was this journalistic rectal thermometer then. Just another article about 2000 words too long that merely takes another slap at Trump for something he far from initiated.

j stevenson
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j stevenson

The big difference between Trump and all the rest is his refusing to accept funds from lobbyists, so they don’t have the White House access they are used to. These are the donors who buy the presidency and are as pixxed off that he won the election as are the media and the Dems. Lobbyists have never been shut out of the WH and Trump has told them he is not for sale.

Anonymous
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Anonymous

Trump needs to be impeached and tossed in prison. Then have the key thrown away so he will never be free. Then he can see how it feels not to have freedom.

Mark Sullivan
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Mark Sullivan

Thank you for the usual insightful leftist low IQ Snowflake response.

barney
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hes not imprisoning them hes sending them back to their country chill tf out

SOUTH JERSEY
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SOUTH JERSEY

WHY DONT YOU HAVE FREEDOM?

Tom Larkin
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Tom Larkin

First, something positive. I was happy to learn of empirical information in article. BUT, the article was so slanted against President Trump as to be deemed fake news (“Perhaps Trump just lied.” (Two different issues)). The article mentions that President Trump raised over $67 million, but ended 2018 with $19 million. President Trump spent over $40 million 2016 and 2017. President Trump conducted 57 political rallies. The article notes the hats and T-shirts sold, but NEVER MENTIONS THE INCREASE IN THE NUMBER OF REPUBLICAN SENATORS during a mid-term election that lost the House and the number of political rallies in… Read more »

Ted Sirois
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Ted Sirois

At least Trump is getting donations from willing donors. Fresh from his first election, Obama used billions of our children’s tax dollars to save thousands of union jobs in the car industry and bailed out the banks and many Wall Street businesses. This secured his source of reelection funds for his reelection four years later.

South Jersey
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South Jersey

TRUMP 2020; IS AN AMAZINGLY SMART MAN! VERY ORIGINAL & CREATIVE. I AM HAPPY TO HAVE HIS AS POTUS.

SOUTH JERSEY
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SOUTH JERSEY

THIS ARTICLE WAS OBVIOUSLY WRITTEN BY, A TRUMP-HATE-GROUP. THAT FEELS; IT IS NOT NORMAL TO BE SUCCESSFUL WITH YOUR OWN BRAND NAME. WHEN, IF FACT, IT IS NORMAL! >>>>> THIS IS >>> FAKE NEWS!!! <<<< ie: A PACK-OF-LIES; SPUN INTO; DEFAMATION OF CHARACTER. FOR A SINISTER-AGENDA OF; FASCIST DEMOCRATIC SOCIALIST, COUP D'ETAT

David
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David

Are you on some kind of drugs? Writing in caps makes me think that you are grumpy old fart or a uneducated hillbilly.