Green Room

ObamaCare: Shot Across the Bow

posted at 12:30 am on October 13, 2009 by

I am following up on yesterday’s story about the health insurers’ revolt against the Baucus vapor bill because I — like a lot of people — may have undersold it.

The White House may attack the America’s Health Insurance Plans (AHIP) study, which predicts the healthcare bills pending congressional approval could cost the typical family up to $4,000 more in monthly premiums each year. Liberal bloggers like Steve Benen may bring out the lazy sarcasm, claiming that “[p]rivate health insurers haven’t exactly played a constructive and supportive role on health care reform this year.” In reality, AHIP’s decisions to promote healthcare reform and not run negative ads were important factors in ObamaCare’s survival over the summer.

Smarter analysts like Jonathan Cohn (on the Left) and Keith Hennessey (on the Right) can criticize the study on its merits, though Hennessey ultimately agrees that the Baucus vapor bill would make health insurance more expensive.

But Hennessey is about the only pundit on the right track, because he goes further to ask about the politics of the study — asking why AHIP waited until now to attack. Part of the answer is because the Baucus bill undoes the Faustian bargain insurers struck with the Democrats — “guaranteed issue” and “community rating” for mandates and fines. When AHIP president Karen Ignagni says, “You really have to have a coverage level in the high 90s to make this work,” she means “to make this work for health insurers.”

Another part of the answer is that since ObamaCare survived the August recess, the six largest publicly-traded health insurance companies have taken it in the shorts:

Weighted for market capitalization, these insurance stocks have lost 11 percent of their value since Labor Day, wiping out about $10 billion in value. And that’s understating the case since the major indices have gained 5-8 percent over the same period — the insurance industry stocks are underperforming the market by just shy of 20 percent.

AHIP’s Ignagni is a Democrat and former labor apparatchik who wants to work with Democrats, but after losing $10 billion of market cap in a few short weeks, the membership may be rethinking the collaboration strategy.

Accordingly, the pundits’ analyses of the merits of the AHIP study likely miss the point. Frankly, would anyone be shocked if AHIP does not care about the merits of the study? No. The entire point of the study is political. It is a message to the politicians that the insurers are not going to simply complain if Reid sends a bill to the Senate floor that is not to their liking. They will take action. They will drive news cycles. They may launch an air war.

So let’s look at AHIP and its war chest:

AHIP spent $3.9 million in lobbying activities in the first six months of 2009, according to lobbying disclosure forms. In the first half of 2008, they spent $3.7 million on lobbying activities.

AHIP’s PAC has contributed $189,000 to committees and federal candidates during the 2010 election cycle, according to Federal Election Commission records. Recipients this year have included the Blue Dog PAC; Congressional Black Caucus PAC; Democratic Senatorial Campaign Committee; National Republican Congressional and Senatorial committees; Senate Majority Leader Harry Reid, D-Nev.; House Speaker Nancy Pelosi, D-Calif.; Senate Finance ranking member Charles Grassley, R-Iowa; and House Minority Whip Eric Cantor, R-Va. During the 2008 election cycle, AHIP’s PAC donated $591,000 to committees and candidates.

AHIP has run television ads promoting health care reform, but it has not disclosed the amount of money spent on the ads.

The group’s total revenue for 2007 was $75.9 million, according to IRS forms.

In short, with the industry’s future on the line, AHIP did not spend much more in the first half of 2009 than it did in the first half of 2008. AHIP’s pro-reform ad buy was reportedly seven figures, which suggests it has tens of millions of dollars to spend. That money could be spent on anti-ObamaCare ads — and for comparison, consider that the famous “Harry and Louise” ad buy was only $14 million in 1993-94. AHIP could spend two or three times that much and still have tens of millions that could be withheld from old allies, and donated to new ones.

You do not have to read the AHIP study to understand it. It’s a threat, and now the Democrats also have to start worrying about other special interests leaving their coalition of the bought-off.

Update: The AHIP study has put Democratic noses out of joint, with anonymous rumors of retaliation. That sounds imprudent, but if the Dems respond to the shot across their bow by launching a war against the insurers, I will bring the popcorn.

Update x2: Surprise, surprise, surprise — AHIP has made a multi-state (Pennsylvania, Colorado, New Mexico, Missouri, Louisiana and Nevada), million-dollar ad purchase claiming that seniors will see their care cut under Democrat-crafted legislation.

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That sounds imprudent, but if the Dems respond to the shot across their bow by launching a war against the insurers, I will bring the popcorn.

Buttered or un-buttered? I insist on buttered.

I will bring drinks.

I’d like it as a double feature with Cap and Trade.

juanito on October 13, 2009 at 12:39 PM

The hysterical thing about this is that there really are details out there that could sink this if they became known among the elctorate. The only reason that it’s gotten this far is b/c of the “cooperation” from the health ins. carriers with the individual mandate being the payoff. If they decide that they’re about to be screwed on this deal either way, might as well try and kill it. An ad war will not work out well for the Dems if these “details” become known and are scrutinized.

volnation on October 13, 2009 at 12:40 PM

Imagine the dumbest thing the Dems could do then place your bets.

heshtesh on October 13, 2009 at 12:42 PM

It’s sad that Dems can’t even keep the support that they’ve paid off and manipulated. Have they lost their mastery of dirty politics?

If only the facts of the health care plans was the central issue, this bill would be toast already. But thanks to “we can’t figure out how to publish the bill” Baucus, we’re left debating an invisible bill.

So much for Democracy at work…

hawksruleva on October 13, 2009 at 12:46 PM

It could get even interesting if the WH and the ‘rats try to pull a ‘Baucus’ and step on the throats of the AHIP.

Will Teh One attempt to lean on his ‘pets’ in the networks to minimize the ‘ad buy’ opportunities for the AHIP?

Time will tell.

CPT. Charles on October 13, 2009 at 12:49 PM

They should publicize how much they spent on dumbocraps to get their support, then turn it into an attack ad saying the dems took all this money to screw the public out of not only more money, but less health care. MUCH less care for the elderly in fact, since the elderly will be giving up their health care and handing it to the illegals.

All this should go over very well in ads over the next year.

Spiritk9 on October 13, 2009 at 1:01 PM

Buttered or un-buttered? I insist on buttered.

I will bring drinks.

I’d like it as a double feature with Cap and Trade.

juanito on October 13, 2009 at 12:39 PM

Can’t make it buttered, otherwise unclesmrgol and Dark-Star will start complaining about you driving up their health care premiums.

MarkTheGreat on October 13, 2009 at 1:01 PM

Actually I am beginning to take heart – the difficulty the Dems are having in getting enough of the citizenry down with Cap and Trade and government run, monumentally expensive health care – I am hopeful that the majority of Americans do still believe in personal freedoms thus resist having the government ram through policies that take choice away from people. I have always been a proponent of this: if you are on the government dole out then you should be the one restricted in your choice – BUT if you make your own way the government should BUTT OUT.

AusTex girl on October 13, 2009 at 1:09 PM

I am hopeful that the majority of Americans do still believe in personal freedoms

AusTex girl on October 13, 2009 at 1:09 PM

We have on this site, so called conservatives who celebrate the govt trying to drive tobacco companies out of business, who get positively joyous when the govt passes laws requiring seat belt useage, and who complain that passing laws to regulate what people eat is just too expensive.

I am really coming to doubt that there are that many people who value personal freedom anymore. The idea that you can use govt to force everyone else into your idea of a perfect society has become too enticing.

MarkTheGreat on October 13, 2009 at 1:12 PM

MarkTheGreat – good point but I guess the operative word was hopeful – thanks for putting a damper on my hopey-changey moment.

AusTex girl on October 13, 2009 at 1:20 PM

Can’t make it buttered, otherwise unclesmrgol and Dark-Star will start complaining about you driving up their health care premiums.

MarkTheGreat on October 13, 2009 at 1:01 PM

In a perfect world, only your premiums would go up, while the rest of us would be laughing all the way to the bank.

But we don’t live in a perfect world, and unless you scarf enough buttered rolls to balloon to a massive size I highly doubt that’ll be a problem. Like ‘guns and knives’, the issue is abuse of the item…not the existence of the item. Buttered rolls have very little intrinsic harm value.

Dark-Star on October 13, 2009 at 1:21 PM

AusTex girl at 1:09
I hope your optimism is well founded. I am not feeling that way because I think the majority of politicians do not share your values, and they are going to act now while they have a chance.

GaltBlvnAtty on October 13, 2009 at 1:25 PM

How about a shot into the brow?

MarkTheGreat on October 13, 2009 at 2:05 PM

AHIP has made a multi-state (Pennsylvania, Colorado, New Mexico, Missouri, Louisiana and Nevada), million-dollar ad purchase claiming that seniors will see their care cut under Democrat-crafted legislation.

Not Florida? or Arizona? seems those would be prime states for rousing the seniors ire (and subsequent votes) Unless maybe the seniors in those states are already considered “ire”ed up already??

Hmmmm, I guess at 61 I’m considered a senior??? I don’t feel senior but maybe I’m fooling myself

E9RET on October 13, 2009 at 2:08 PM

The complexity of the relationship between Congress and their heavy-handed contributors boggles the mind. But the Dems will be the recipient of unintended concequences that they could never imigine.
.

Just think how screwed up the Healthcare system will be once the market figures out how bad they screwed-up 1/6 of the US Economy, not to mention the ability for Americans to access what was once the Best Healthcare System in the World.
.

They wont be able to fight this Bill out of a paper bag.
And they desreve the wrath of all Americans who have abrain. All 40 % of us.

SayNo2-O on October 13, 2009 at 2:24 PM

The AHIP study advocates for the Obama vision of mandated coverage. The insurers are on the side of requiring young people to maintain insurance regardless if they want to or not.
Healthcare reform WILL be paid by the young that are healthy and working. Not by the rich, or the insurance companies giving up profit.

LeeSeneca on October 13, 2009 at 3:30 PM

Update x2: Surprise, surprise, surprise — AHIP has made a multi-state (Pennsylvania, Colorado, New Mexico, Missouri, Louisiana and Nevada), million-dollar ad purchase claiming that seniors will see their care cut under Democrat-crafted legislation.

They forgot Arkansas. Two Democrat Senators, one vulnerable in 2010 (Lincoln), red state, not too expensive.

Steve Z on October 13, 2009 at 4:33 PM