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Continued: Health insurers fighting overhaul plan with cash

  • Article by: PAT DOYLE , Star Tribune
  • Last update: August 2, 2009 - 11:29 PM

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.

That includes Minnesota, where Republicans are the biggest beneficiaries of the industry's largesse. Sixth District Rep. Michele Bachmann, an outspoken foe of a government insurance option, is among the top recipients this year in the entire U.S. House. Third District Rep. Erik Paulsen and Second District Rep. John Kline also ranked high in contributions received.

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.

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 earlier this 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.

U.S. House Speaker Nancy Pelosi on Thursday 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.

Donations rise as reform nears

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.

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.

Bachmann has denounced the public alternative, dubbing it a "government takeover of health care" and evoking images of Cuba. She argues that government subsidies and regulations for the public plan "will squeeze out private health insurance."

"It will be very difficult for the private insurers to compete," she said.

Bachmann ranks eighth this year among the 435 members of the U.S. House in campaign contributions from donors within the insurance industry, which includes health, accident and life insurance, according to the Center for Responsive Politics. Insurers gave her $50,900, more than any other industry.

Among Bachmann's top contributors are associates of AFLAC, American Family Mutual Insurance and the National Association of Insurance and Financial Advisors. Top local donors include Minneapolis insurance executive Jeffery Bird of the Brehm Group, who has given Bachmann $13,300 since 2005, according to the Federal Election Commission.

During the 2008 campaign, Bachmann also received money from sources of the National Association of Health Underwriters, which is taking an active role in lobbying against a public insurance plan.

"When crafting comprehensive health reform legislation, Congress needs to avoid creating a government-run public health plan option to be offered as an alternative to, or in competition with, private-market health plan offerings," the association wrote recently.

A public option would not be financially feasible and would leave the private market unable to compete, the group said, suggesting that the government instead help the poor buy private insurance.

Asked if she's heard insurers concerns, Bachmann said, "I haven't had insurance companies here in my office speaking with me directly about it."

"I'm not here as a voice for private insurance companies," she said. "I'm here as a voice for the taxpayers."

Bachmann said she probably receives so much money from the insurance industry because she sits on the House Financial Services Committee, which oversees insurance as well as banks and related industries.

Paulsen, who also sits on that committee, ranked 31st in insurance contributions, while Kline ranked 52nd. Seventh District Rep. Collin Peterson, the top-collecting Minnesota Democrat, was 60th. Among the 100 senators, Democrats Al Franken and Amy Klobuchar rank 43rd and 51st, respectively, in contributions from insurance sources.

Cutting deals

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.

Of that, Fifth District Rep. Keith Ellison, D-Minn., ranks 32nd among House members, with $30,550 from that sector. Fourth District Rep. Betty McCollum, D-Minn., was 84th in health professionals' contributions, while Paulsen was 95th.

Donors from pharmaceuticals and health care products gave $2.1 million this year to Congress. Bachmann ranks 24th in contributions to House members while Paulsen and Kline rank 93rd and 94th.

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.

Patrick Doyle • 651-222-1210

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