HHS awards $5.9 million contract to Obama crony

posted at 3:21 pm on May 14, 2012 by Ed Morrissey

Two stories coming from Health and Human Services will likely get overlooked today, with the main thrust of conversation turning to same-sex marriage and Barack Obama’s hypocritical attack on Mitt Romney and Bain Capital.  Both deserve more attention, especially a curious award of a contract worth nearly $6 million to a crony of Obama’s back in Chicago, which Keith Koffler exposes:

The Department of Health and Human Services last week announced it had awarded a $5.9 million grant to a University of Chicago Medical Center program tied to Michelle Obama and run by Eric Whitaker, one of President Obama’s closest friends.

The Urban Health Initiative, which received the award, was originally based on a smaller program launched during the last decade by Michelle Obama, who was an executive at the University of Chicago Medical Center before she departed to become first lady. The UHI is headed up by Obama basketball and golf buddy Whitaker, who has known the president since Obama’s days in law school and who also vacations with the first family.

Obama senior adviser Valerie Jarrett also has ties to the UHI. Until resigning to go work at the White House, Jarrett was Chairman of the University of Chicago Medical Center Board of Trustees. And in 2007, a PR firm run by former senior White House adviser and Obama political guru David Axelrod provided provided public relations strategy advice to the UHI, according to the Washington Post.

There is no specific evidence that any of those linked to the Obamas, or the Obamas themselves, influenced the HHS decision to grant the funding to the UHI. But the large award raises questions about appearance, given the number of Obama associates connected to the program and the involvement of the first lady with its founding.

There were 3,000 applicants for this funding, and only 26 awards.  HHS insists that Obama had nothing to do with the decision, and that the process underwent an “objective review.”  It’s just coincidence that an old Obama friend from Chicago wound up winning the contract, while 99.1% of all applicants got a rejection slip.  Amazing!

Next, in a little-noticed part of the Friday afternoon document dump last week, HHS informed insurers that they are now required to give credit to Obama’s health-care reform law when sending out rebate checks:

Health-insurance companies must tell customers who get a premium rebate this summer that the check is the result of the Obama administration’s health-care law, according to federal guidelines released Friday.

The move is the latest sign the Obama administration is trying to draw attention to the law’s benefits before the fall elections, even though the law faces an uncertain future. The Supreme Court is expected to decide in June whether its central plank—a mandate that everyone carry insurance—violates the Constitution. Mitt Romney, the presumed Republican presidential nominee, has pledged to wipe out the law if elected.

Under the 2010 legislation, insurers that don’t spend a specified amount of revenue on actual medical care—as opposed to administrative costs—must refund the difference to customers. The nonpartisan Kaiser Family Foundation has projected refunds would total about $1.3 billion and go to roughly 16 million people who buy their own policies or get them through an employer.

Kaiser estimates checks would range from an average of $72 for those with insurance through a large employer to an average of $127 for those who bought individual policies.

Rules finalized by the Department of Health and Human Services on Friday instruct insurers to notify recipients of rebates in the first paragraph of the mailing by writing: “This letter is to inform you that you will receive a rebate of a portion of your health insurance premiums. This rebate is required by the Affordable Care Act—the health reform law.”

Most of them probably would have included some kind of explanation anyway.  Don’t forget that these insurers mostly backed the ObamaCare law, thanks to its individual mandate that would force tens of millions of people to buy their comprehensive product, whether they really need it or not.  With ObamaCare still deeply unpopular, insurers have some stake in boosting it to mitigate consumer sentiment, too.

Still, this looks awfully close to electioneering through regulation.  Only those who believe in magical coincidence would fail to note the proximity of this summer to the 2012 presidential election, and to the conventions.  The federal government doesn’t have any business in forcing insurers to engage in speech to support their own legislative agenda.  While I doubt that insurers will bother fighting HHS on this, and also doubt that it will have any real impact on voter dislike of ObamaCare and the mandate, it’s yet another subtle abuse of power that should not go unremarked.


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