The fallout from the National Journal article detailing how the health insurance industry bankrolled third-party efforts to kill the reform bill continues. To recap:
That money, between $10 million and $20 million, came from Aetna, Cigna, Humana, Kaiser Foundation Health Plans, UnitedHealth Group and Wellpoint, according to two health care lobbyists familiar with the transactions. The companies are all members of the powerful trade group America's Health Insurance Plans.
The funds were solicited by AHIP and funneled to the U.S. Chamber of Commerce to help underwrite tens of millions of dollars of television ads by two business coalitions set up and subsidized by the chamber. Each insurer kicked in at least $1 million and some gave multimillion-dollar donations.
"There's no question that AHIP has quietly solicited monies from their members which were funneled over to the chamber for their ads," said a source. The total donated by the health insurers, according to one estimate, was as much as one-quarter of the chamber's total health care advertising budget....
The U.S. Chamber has spent approximately $70 million to $100 million on the advertising effort, according to lobbying sources. It's unclear whether the business lobby group went to AHIP with a request to help raise funds for its ad drives, or whether AHIP approached the chamber with an offer to hit up its member companiesThe U.S. Chamber has spent approximately $70 million to $100 million on the advertising effort, according to lobbying sources. It's unclear whether the business lobby group went to AHIP with a request to help raise funds for its ad drives, or whether AHIP approached the chamber with an offer to hit up its member companies
That's led to call for investigations of the insurers. Wendell Potter argues that these investigations should occur before Congress passes this bill, a bill that reward the companies for their duplicity by sending them millions of new customers, most of whom will be forced into the deal. That's unlikely to happen, but what the scandal can do is strengthen the hand of the House on two provisions: the national exchange and imposing anti-trust laws on the companies.
Ben Nelson insisted upon having the anti-trust exemption preserved, against the wishes of the a very large part of the Democratic Senate caucus. Lawmakers who have insisted on ending the anti-trust exemption have gained some momentum with the revelation:
Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) and 18 Democratic colleagues released a letter calling for the final health bill to include a provision stripping the insurance industry of its exemption.
“There is simply no reason for health insurance and medical malpractice insurance companies to be exempt from Federal laws prohibiting price fixing, bid rigging, and market allocation,” the lawmakers wrote. “These acts hurt consumers, drive up health care costs, and should be prohibited in the health insurance industry, as they are in virtually every other industry.”
....
But major health insurance companies represented by AHIP say they are not at all worried about the Democrats’ threat to end their anti-trust exemption.
“We could care less,” said an industry source.
The industry source said that repealing the anti-trust exemption would impact property casualty insurers that share information to set rates. Large healthcare companies that have many policyholders would have enough internal data to operate without much disruption, the source said.
Given that the insurers have gotten the best deal out of this reform effort that they could have imagined, or have paid for, I guess there's a reason for their arrogance. That and the reality that anti-trust laws are only as good as the regulatory and oversight system created to enforce them. On that front, insurers probably do have little to fear. Which makes the makes using the House's national exchanges rather than the Senate's, or rather Ben Nelson's, state-based exchanges, even more critical.
Policy analysts say consumers have benefited from the close supervision of some states, like Massachusetts, which a few years ago revamped its market so insurers were obliged to cover everyone and offer consumers a comprehensive set of benefits. California, too, is well known for its aggressive regulation of insurers on consumers’ behalf.
But many other states give insurers much more leeway in deciding whom and what they must cover, how much they can charge and even, in some cases, when they must pay claims.
Idaho, for example, is among the few states that does not routinely review many denials of insurance claims. Nevada, which also takes a laissez-faire approach, does not require insurers in its state to cover maternity care.
For that matter, Gov. Jim Gibbons of Nevada announced last week that his state would sue the federal government to prevent the health care legislation from becoming law....
So, even if a plan purchased in Reno might look a lot different under the Senate bill from one bought in Boston, under either the House or Senate version the policies would probably be much more alike than they are today, said Alan Weil, the executive director of the National Academy for State Health Policy.
But if states are put in charge of enforcing the new rules, Mr. Weil predicts some states will do their best to ignore them. “It doesn’t matter if it’s in the statute,” he said. “It isn’t going to happen.”
The Achilles heel of this bill has long been the lack of real enforcement mechanisms. That's why the public option was so critical--it would have created the kind of market competition that would have been the most effective means of keeping these companies honest. Absent that, a national framework with the federal government in charge of oversight is the only real hope of making the insurance reforms actually happen. Applying the anti-trust laws to insurers could give them a potential tool.
But Ben Nelson doesn't want insurers to be constrained in any of these ways. And what Ben Nelson wants, Ben Nelson gets. At least so far. It doesn't seem like he's particularly concerned if he ends up being responsible for derailing the bill. So the question is whether Obama and Reid and Pelosi will continue to let him have his way, or find some way of cracking the whip over him. Now that Nebraska has turned on him, maybe he's not so invulnerable after all and it's time to tell him that Nebraska doesn't get shit from the feds for the remainder of his current term--up in 2012--if he doesn't start playing along.