Interest Groups Turn Up The Heat

08/03/2009 11:44 am ET | Updated May 25, 2011

by Faiz Shakir, Amanda Terkel, Matt Corley, Benjamin Armbruster, Ian Millhiser and Nate Carlile

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On Friday, after days of contentious negotiations between "Democratic House leaders and an influential group of fiscal conservatives in the party," the House Energy and Commerce Committee passed a health care bill by a vote of 31-28. The committee's bill "will now be merged with two separate versions passed by other House panels before being considered by the full chamber in September." Energy and Commerce is the fourth committee to approve a bill, with each requiring all Americans to secure insurance coverage, establish insurance exchanges, and create "a system of government-sponsored coverage to create more competition for insurers." A fifth committee, Senate Finance, is still negotiating a less ambitious measure that would not require all large employers to offer coverage or include a public health insurance option. The vote in Energy and Commerce follows tense negotiations between the committee chairman, Rep. Henry Waxman (D-CA) and liberal and conservative wings of the Democratic Party. The conservative Blue Dog caucus secured concessions that decoupled the public health insurance option from Medicare and lowered affordability measures. In protest, 57 members of the Progressive Caucus sent a letter to House Speaker Nancy Pelosi (D-CA) arguing that the "agreement is not a step forward toward a good health care bill, but a large step backwards" since it does not provide "at a minimum, for a public option with reimbursement rates based on Medicare rates." On Friday morning, the two sides reached a deal that allowed the public plans to "set drug prices with pharmaceutical companies" and required "insurers in the state exchanges to consult the government before raising their premiums." After the bill passed, Pelosi promised a "drumbeat across America" to counter what she termed a "shock and awe, carpet-bombing by the health insurance industry to perpetuate the status quo." "Facts mean nothing" to insurance industry executives and others opposed to change, she said. "Misrepresentation is the currency of their realm."

THE ADMINISTRATION'S CAMPAIGN: "The Republican scare tactics out there have had an impact, but we are going to get out the story and the truth," Rep. Chris Van Hollen (D-MD) told reporters last week. Indeed, "with Republicans mobilizing against the proposed health care overhaul, President Obama, Congressional Democrats and leading advocacy groups are laying the groundwork for an August offensive against the insurance industry as part of a coordinated campaign to sell the public on the need for reform," the New York Times reports. The administration is gearing up a campaign "intended to drive home the message that revamping the health care system will protect consumers by ending unpopular insurance industry practices, like refusing patients with pre-existing conditions." "I think what we want to communicate is that this is going to give people who have insurance a degree of security and stability, the protection that they don't have today against the sort of mercurial judgments of insurance bureaucrats," Obama adviser David Axelrod explained. Pointing to polls that show many Americans are anxious about preserving the quality of their health insurance coverage, the administration will stress how the existing legislation would strengthen the system. Last week, Obama previewed the administration's message by stressing eight ways "health-care consumers would be treated better by insurance companies if reform efforts pass." Under the reform legislation, insurance companies would be prohibited from refusing you coverage because of your medical history, dropping or watering down insurance coverage for those who become ill, charging exorbitant out-of pocket expenses, and imposing life-time or annual caps on coverage. Moreover, the industry will be "required to renew any policy as long as the policyholder pays their premium in full" and "must fully cover, without charge, regular checkups and tests that help you prevent illness, such as mammograms or eye and foot exams for diabetics." "The glory days are coming to an end for the health insurance industry in our country," Pelosi told reporters on Friday.

THE AUGUST OPPOSITION: In anticipation of the August recess, industry groups and congressional Republicans are mobilizing to oppose the four health care bills out of committee. "GOP aides on the Hill and Republicans on K Street" are urging America's Health Insurance Plans (AHIP) -- the insurers' lobbying arm -- "to get tougher," Politico reports. "Hopefully, these guys will realize their approach hasn't been working and will get into the game," said a senior Republican aide on the Hill. Answering the GOP's call, AHIP's director of strategic communications, Robert Zirkelbach promised that the trade group is "going to be very active." "We have people on the ground in more than 30 states. There are thousands of industry employees who have now had their integrity called into question. They want to have their voices heard as part of this," Zirkelbach said, implying that lobby is urging industry employees to "go to town meetings with members of Congress in August to confront them." "Insurers are pushing back against several proposals that lawmakers see as favorable to consumers. One proposal would prevent insurers from charging older Americans more than twice the rates charged to younger people. Insurers want to be able to charge older people as much as five times more," the Wall Street Journal reports. Until now, "insurers have played the inside game, spending about $40 million on an army of lobbyists and lavishing campaign contributions on Democrats and Republicans to kill the public option. In all, the health industry spent $133 million in the second quarter alone, more than a million bucks a day." WellPoint Inc., the nation's largest insurance company, has set up an "online network where it makes the case against the public health insurance plan and urges consumers to contact their elected officials." Republican Senators will also meet this week "to coordinate strategy, but some plans are already in motion for public meetings and a blizzard of radio and television appearances." According to the New York Times, Sens. Tom Coburn (R-OK) and John Barrasso (R-WY) will take their "Senate Doctors Show," an Internet program, "on the road to argue that the Democratic plan will not improve care or control costs."

REPUBLICAN ALTERNATIVES: "We have two parts to our strategy," explained Senate Republican Conference Chairman Lamar Alexander (R-TN), "one is to offer what we think should be done. ... We have more Republican proposals for how to get where we need to go on health care than the president has put out, which is zero." On Thursday, Rep. Tom Price (R-GA) proposed the fifth Republican alternative health care plan. Like its predecessors, the new "Empower Patients First Act" -- which is almost identical to other four GOP plans -- unravels employer-based coverage, endangers the coverage of Americans with pre-existing conditions, and drives-up health care spending. The latest Republican alternative recycles Sen. John McCain's (R-AZ) old campaign proposal. The bill would undermine employer coverage by allowing younger and healthier workers to purchase subprime health plans in the unregulated individual market. Americans with pre-existing conditions would be placed into very expensive "high-risk pools" and insurers would be allowed to avoid state consumer-protection laws by selling policies across state lines.