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GOP Rushes To Defend Insurance Companies From Dem Attack

First Posted: 11/22/09 05:12 AM ET Updated: 05/25/11 03:10 PM ET

Boehner

UPDATE: Veering right into Glenn Beck territory, House Republicans darkly hinted Wednesday that the White House was behind the nefarious plot to muzzle insurance companies.

House Ways and Means ranking member Dave Camp (R-Mich.), is now demanding to know whether anyone from the White House was involved in the decision to tell companies to stop using taxpayer-subsidized communication to terrify seniors into opposing health reform.

"I have never seen anything like this and I question if politics was the deciding factor," said Camp.

Rep. Michele Bachmann (R-Minn.) doesn't think it smells right, either. "[G]angster government is at it again," she wrote in The Hill.

Minority Leader Mitch McConnell took to the Senate floor again Wednesday morning and tried to tie this story into a larger narrative: "Over the past several months we've seen a pattern of intimidation by supporters of the administration's health care proposal, including efforts to demonize serious-minded critics at town hall meetings across the country. Now we're seeing something even worse. The full power of the federal government being brought to bear on businesses by the very people writing the legislation.... Americans are already skeptical about the administration's plan. They should be even more skeptical now."

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Republicans took to the floor of Congress, the Internet and the Wall Street Journal op-ed page Tuesday in a rush to defend a health insurance company that used taxpayer-subsidized communication to terrify seniors with the prospect that health care reform will cut their Medicare benefits.

Republican leaders in both houses of Congress ripped Sen. Max Baucus (D-Mont.) for urging the Centers for Medicare & Medicaid Services (CMS) to put a stop to the insurers' efforts, decrying what they called a "gag order" and reading the First Amendment on the floor of the Senate.

Baucus, meanwhile, seemed mostly oblivious to the Republican attacks. "I never gag. I believe in the First Amendment," he told HuffPost, but added that he didn't know what the Republicans were referring to. "I have to go back and look to see what it is we did."

As chairman of the Senate Finance Committee, Baucus spent most of the day marking up a reform bill that so far has no GOP support - although Maine Republican Olympia Snowe has offered some indications of being on board. Snowe has been speaking warmly of the package and most of her reservations seem to be that it isn't generous enough -- objections the Democratic caucus will be happy to overcome. And in Massachusetts, a state senate vote moved Democrats one step closer to regaining 60 seats in the U.S. Senate.

Meanwhile, the GOP rode to the rescue of health insurance companies.

"It is outrageous that the Obama Administration is trying to keep seniors in the dark about the consequences of congressional Democrats' costly government-run health care bills. Would the Administration impose this sort of gag order if seniors were being given information promoting the Obama health care plan? I don't think so," said Minority Leader John Boehner (R-Ohio).

"It looks likes CMS is engaged in government intimidation, pure and simple," said Ways and Means Ranking Member Dave Camp (R-Mich.), who sent off a letter to CMS demanding an explanation.

Minority Whip Jon Kyl (R-Ariz.) said it shouldn't be seen as coming to the defense of insurance companies. "I don't know that I'm coming to the defense of anything, except the First Amendment. I don't care who they write to," he told HuffPost. "You don't lose your rights because you happen to sell insurance for heaven's sake."

The free-speech argument, however, is complicated by the government-subsidy. Medicare Advantage is a GOP-created program that gives private plans an average of 14 percent more tax dollars than the government pays for coverage of patients under traditional Medicare.

Democratic health-care proposals would cut payments to those plans by about $123 billion over 10 years.

That would cut deeply into insurance company profits.

So, as Huffington Post citizen journalist Dawn Teo reported on Monday, Humana sent mailers to their list of Medicare beneficiaries warning that the Democratic health care reform bill will cut "important benefits and services" and urging them to call Congress to register their concern.

Baucus complained and the Centers for Medicare & Medicaid Services (CMS) cried foul, protesting that the mailings were misleading and instructing them to stop.

Communication between the private Medicare Advantage providers and beneficiaries is strictly regulated because the private companies are using public dollars.

CMS focused on a mass mailer sent by the insurance giant Humana claiming that the leading health care proposals in Washington would cut billions from Medicare Advantage programs, "as well as spending reductions to original Medicare and Medicaid. While these programs need to be made more efficient, if the proposed funding cut levels become law, millions of seniors and disabled individuals could lose many of the important benefits and services that make Medicare Advantage health plans so valuable."

"I rise to call my colleagues' attention to a truly disturbing development in the health care debate," said Minority Leader Mitch McConnell, a Republican from Humana's home state of Kentucky. "A colleague of ours has called for an investigation into a major health care company because this company informed its customers of its concerns about health care legislation that this colleague of ours introduced. Let me say that again," said McConnell, before saying it all again.

In 2004, Humana's chairman and former CEO David Jones donated a million dollars to the McConnell Center for Political Leadership, a University of Louisville academic center.

The Republican leader made sure to note his connection to Humana on the floor.

"Humana is headquartered in my hometown of Louisville and, yes, I care deeply about its 8,000 employees in Kentucky. But this gag order, Mr. President, this gag order applies to all Medicare Advantage providers. 'Shut up,' the government says. 'Don't communicate with your customers. Be quiet and get in line,'" he said.

He was followed by third-ranking Republican Lamar Alexander of Tennessee, who read the First Amendment on the Senate Floor.

Humana was recently featured in a HuffPost story for denying health care due to lack of an enema. In 2005, it settled a racketeering suit for $40 million. It settled a fraud lawsuit in 2000 for $14.5 million. Since 2000, its profits have soared from $90 million to $834 million.

White House Office of Management and Budget chief Peter Orszag explained earlier this year that Medicare Advantage profits would be a prime target of health reform. "Evidence suggests that each dollar provided under Medicare Advantage costs the government a dollar thirty in costs," he said. "I believe in competition. I don't believe in paying a dollar thirty to get a dollar."

While Democratic leaders were ignoring the charges from Republicans, Democratic aides were having a field day, Googling up one sordid Humana clip after another.

Kyl didn't back down, saying that the CMS regulations about communicating with Medicare beneficiaries apply to information about particular health care plans, not health care legislation. "The fact is that these people are exercising their First Amendment right to talk about a piece of legislation that is pending and how, if it were to pass, it might effect people's coverage. If you can't talk about that, you've lost your First Amendment freedom," he said. "I suspect the people that sent this out are going to regret that they did that."

The GOP arguments are likely to fall on deaf ears. Jonathan Blum, director of the Center for Medicare Management said in a statement that CMS is investigating whether Humana inappropriately used the lists of Medicare enrollees for unauthorized purposes.

Blum is a former adviser to Baucus where he worked on Medicare Advantage issues.

"We are concerned that, among other things, the information in the letter is misleading and confusing to beneficiaries, who may believe that it represents official communication about the Medicare Advantage program," said Blum.

Ryan Grim is the author of This Is Your Country On Drugs: The Secret History of Getting High in America

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