Corporate Profits Muscle Out The Public Opition
Continued from previous page
Others, remarkably, have detailed ways to deprive the public option of the power to lower costs. They call for a "level playing field" with private insurance. The public plan can't be subsidized, can't use its buying power to lower costs, can't take advantage of lower administrative overhead.
This sounds silly. We face soaring health care costs that will literally cripple our future. Surely, no senator concerned about the country would work to undermine the key idea that would help get a lid on costs. They wouldn't, as Barack Obama warned, just "create a system where the insurance companies have more customers on Uncle Sam's dime, but still fail to meet their responsibilities." If you assume that, you would be wrong. They've done it repeatedly in the past.
For example, early in President Bush's first term, Republicans decided that passing a prescription drug benefit for seniors would help cement Karl Rove's permanent majority. The benefit would help 41 million Americans with a soaring cost of care not yet covered by Medicare. It would also create a massive new market for the drug companies. And, of course, Medicare could do what governments across the world do—use its buying power to lower the cost of the drugs.
Only, when Republicans passed the law—in the dead of night, twisting arms to get it done—it actually prohibited Medicare from negotiating a lower price for drugs. Don't worry, they argued, competition would lower drug costs (even as they banned the import of cheaper drugs from Canada or Mexico).
Why? Well, using government muscle violated "free-market" sensibilities. More importantly, the drug companies have one of the most powerful lobbies on Capitol Hill. Rep. Billy Tauzin, the chair of the key House committee ushering the bill through, left soon after to get a $2 million-a-year job as a head of PhRMA, the drug company lobby. Tom Scully, the Bush administration's point person who helped keep the actual cost of the bill secret, was already negotiating his million-dollar job as the debate was going on. In all, 15 congressional representatives, aides and administration officials involved in the debate left shortly thereafter to take jobs with the drug lobby. With a $9 billion increase in annual profits at stake, the drug industry got an amazing return on its investment.
Today, seniors pay 60 percent more for the same drugs than the price charged veterans becuse the Veteran's Administration does negotiate lower prices.
Extreme? Not really. The health insurance companies decided they should be allowed to compete with Medicare in providing health insurance options to seniors. Seniors would get more choice; Medicare, the bureaucratic behemoth, would get agile competition. Win, win, they argued, calling the program "Medicare Advantage."
Only the insurance companies couldn't compete with Medicare straight up. So they demanded subsidies from the government to enable them to vie with the Medicare program they described as horrendously inefficient, unpopular and bureaucratic.
And they stand to pocket an estimated $177 billion in excess payments over 10 years to compete with Medicare—subsidies that Obama would sensibly cut to help pay for health care reform.
Money talks. Nine Republican Senators on the key Senate Finance Committee wrote President Obama to say they would oppose any reform with a public plan. The Center for Responsive Politics reports that the nine had had pocketed $17.7 million in contributions from insurance and health care interests over the course of their careers.
Not surprisingly, the 20 largest insurance and drug companies and their trade associations have pumped up their lobbying by 41 percent over last year—with reported spending over $75 million in the first quarter alone.