Is lobbying money killing the public-plan health insurance option


I can't claim to be 'objective' or neutral on health-care reform -- but who can? Everybody needs health care, some more than others. I need it less than most, as my family and I are, knock on wood, generally blessed with good health. Even so, we laid out $18K last year for health care, still owe money -- and no one in the family ever entered an ER, got a scan, received a prescription costing more than $100, or got admitted to a hospital. And we're among the lucky ones who can (supposedly) afford insurance. (We pay $10K for a plan with a $5K deductible.) This is one of several reasons I'm profoundly dissatisfied with the health-care system we have and recognize what should be obvious: We need major health-care reform in this country.

So why, as a country, do we seem so determined NOT to get it? Or rather, why does Congress seem so determined to not fix something so clearly broken? If a foreign government were causing 45 million Americans to go without health care while driving tens of thousands of others into bankruptcy, we'd be on this thing. Apparently it's okay, however, if we do this to ourselves. And as of this week, the buzz is that Obama's efforts to reform health-care are in serious trouble because of a lack of Congressional support. (Never mind htat polls show the public overwhelmingly supports his efforts.) Why is Congress falling down?

Nate Silver at FiveThirtyEight, the site that rose to prominence handicapping the 2008 presidential race, has a very illuminating piece on suggesting at least part of the answer. He breaks down how different health-care special interest money appears to affect the support given the public-plan options by different types of politicians (i.e., liberal dems v mainline dems v 'centrist' dems v centrist GOPers). Bottom line: the money seems to have the most sway over 'centrist' or 'mainline' Democrats who are from regions with high per-capita levels of health-care spending.

Lobbying contributions appear to have the largest marginal impact on middle-of-the-road Democrats. Liberal Democrats are likely to hold firm to the public option unless they receive a lot of remuneration from health care PACs. Conservative Democrats may not support the public option in the first place for ideological reasons, although money can certainly push them more firmly against it. But the impact on mainline Democrats appears to be quite large: if a mainline Democrat has received $60,000 from insurance PACs over the past six years, his likelihood of supporting the public option is cut roughly in half from 80 percent to 40 percent.

(One caution: It's possible that we're confusing cause and effect: perhaps senators receive a lot of money from the insurance industry because they hold conservative positions on health care, rather than the other way around. Although I believe that accounting for ideology should correct for most of this, I'm open to suggestions on an alternative model design that would better be able to disentangle these effects.)

Note that PAC money spent on Republicans is completely wasted insofar as the public option goes. Someone like Jim DeMint is almost certainly not going to support the public option to begin with; you don't need to give him any further incentive to oppose it! Of course, the insurance industry may get its money's worth in other ways, such as by generating more vigorous opposition from these Republicans to more "bipartisan" versions of health care reform.

Pretty damned interesting. But:

What happens if we set the lobbying variable to zero for all senators? That is, suppose that the health care insurance industry were prohibited from making political contributions? In that case, the model predicts, 47 senators would currently support the public option, as opposed to the 38 who actually do. In other words, the insurance industry's influence appears to swing about 9 votes against the public option. Whatever number of senators wind up supporting the public option, add 9 to it, and you'll have a decent ballpark estimate for what the level of support might be if not for insurance industry contributions. Note, however, that we haven't attempted to model the impact of contributions from other interest groups, including both pro-health reform organizations such as labor unions or other stakeholders like pharmaceutical companies.

We can also estimate which particular senators are most likely to have been influenced by lobbying money. The following chart presents the model's estimates of the net decrease in a senator's probability of supporting the public option based on the quantity of insurance PAC money that he has received:

He then includes a chart showing those whose votes have likely been most swayed. Here's where to look if you want to understand the wavering of people like Dianne Feinstein, who has not publicly come out against the public plan but who said on the Sunday talk shows that she doubted Obama's full plan could go through ... because it lacked support of, presumably, Democrats like herself. And, she added with rather stunning candor, because cutting back excess health-care spending in HER state would simply cost her state too much money:

FEINSTEIN: Ergo, you have enormous problems in my state. California's bigger than the populations of 21 states and the District of Columbia put together. We have an enormous health care industry, 350 hospitals. University of California alone has 34,000 health care workers, has health care worth $4 billion a year. So it's complicated. Additionally, the state is in a state of financial catastrophe. I think that's clear. So, if you change the Medicaid rate, for example, it has an impact on California between $1 billion and $5 billion a year. Now, how could I support that? Because it would take down the state.

As Crooks and Liars points out, Feinstein's argument here ignores the fact that both consumers and employers would have billions of dollars freed up every year in savings in what they paid out for insurance and health care. This would improve California's economy, not harm it.

Other key players such as Harry Reid and Kent Conrad are also high on this list.

This is nauseating to contemplate. I've yet to hear a convincing argument -- one based on realities rather than ideological fears of a single-payer Trojan horse or "unfair" competition a public plan would pose to the ludicrously inefficient private insurance system -- as to why we shouldn't have a public plan option. So why aren't Democrats supporting it? Or rather, why are Democrats killing the public-plan option?

Boy, I'd hate to think it's the money. But the thinness of the arguments make me think I'd be stupid to think otherwise. As Nate Silver put it,

"I'm generally not one to carp about special interest money -- seeing politics through that lens is often an overly reductive formulation that serves as a catch-all excuse any time Congress does something you don't like. But on something like the public option, which has broad public support and which would probably reduce -- not increase -- the long-run bill to the taxpayers, it is just about the only way to explain what's going on in Washington."

More like this

I can't claim to be 'objective' or neutral on health-care reform -- but who can? Everybody needs health care, some more than others. I need it less than most, as my family and I are, knock on wood, generally blessed with good health. Even so, we laid out $18K last year for health care, still owe money ...

So the solution appears to be... get someone else to pay it. But then you have to pay for other people's health care too. Slogging the bill around is just flim-flam does not eliminate the cost, it just hides it under layers of taxation and charges (or worse yet, buried in the national debt).

It appears that our current mindset of vast numbers of expensive tests, whether CYA on the part of the doctor or 'following up every remotely possible lead' on the part of the patient are contributing to extravagant bills (add to that the high labor intensive nature of modern healthcare and the costs of liability litigation) and we see a bubble in the making.

The problem is, even though we hate to think that way, is that just because a treatment is medically possible, does not mean that as individuals or society we will be able to give every last person every possible benefit. At the current rate costs for healthcare (no matter who is paying) will be exceeding food, housing etc and we'll have to make some unpleasant choices.

The London Financial Times had a column just a few days ago stating that the single-payer Medicare for all plan makes far more sense than the public "option" that is struggling at the moment (and would be significantly better than our current ludicrous system). is an excellent resource and should be taken seriously. They predicted nearly every congressional seat change in the 2008 election. If there's a magic ball in statistics, they have it.

"So the solution appears to be... get someone else to pay it."

No. The solution is to get some of the inefficiencies and profit-mongering out of the equation, so it costs less alltogether. Right now, we pay more per capita -- quite alot more -- for demonstrably lower quality of care:…

If it were up to me, we'd have a group rate federal policy anyone could buy into that would be discounted on a sliding scale for very low income patients who can't qualify for Medicaid (for example, because they're being reproductively responsible and their state only gives Medicaid to people crapping out kids they can't feed). Also, the plan would cover generic birth control 100% and strongly incentivize using generics, preventative care, and reaching health goals (i.e. not smoking, losing weight, etc). It wouldn't cover expensive idiotic rebranded drugs at all and while we're at it let's outlaw direct-to-consumer advertizing of prescription drugs like everyone but us and New Zealand have already done.

And, since I'm daydreaming here, maybe the FDA could put their foot down and stop giving years of patent protection to idiotic, overpriced, system-bloating, UNETHICAL rebranded drugs that are just an active isomer, metabolite, combination, extended-release, different dosage, etc. of existing generic drugs. In the past 6 years, more than 3/4ths of new drugs have been similar mechanism of action drugs (read: overpriced stupid crap to scam more money out of us), and more than 80% of the actually-new drugs were found with R&D that was federally-funded. The private companies are wasting their R&D money on finding new ways to get patent protection on existing drugs, jacking up the price 10-fold or more, then advertising their version directly to consumers who then demand that drug from the doctor and won't comply with any other therapy but that thing with the cute cartoon mascot they saw on TV. Why should their ignorance and the drug companies' greed make it so a working poor pharmacy tech like me can't afford good insurance? This is madness.

I'm ready to riot if you guys are.

Sigh. Your points are really great. Truly.

Hmmkay, so, not to make light of the situation (by any means), but free stuff makes it all a little better, right? Perhaps the pharmacy technicians of the bunch here would appreciate NPTA's Big Picture Photo Contest (yes, yes, this is legit, we swear)? I mean, get the creative juices flowing in this slow economy - couldn't hurt, right? You can win some sweet lil' prizes...

Just trying to inject some sunshine in your days :) It's a tough road out there, and we gotta look out for each other.

OK, I'm actually going to jump in here, even though I usually avoid talking about health care reform. Everybody has ideas and very few people have facts. For the record, I'm a health care economist with over 20 years experience. So:

1)25% of spending (approximately) is for care in the last year of life. We are spending way too much on trying to keep people alive that are going to end up dying anyway. Medicare spent over $200,000 on my mom two years ago, and we all knew she was going to die anyway (look up AML).
2)We need cheap basic coverage for common stuff, with catastrophic coverage for everybody in case they get hit by a car. This does NOT translate to "single-payer"; and certainly does NOT translate to "government-run". It's nice to know you have a high-deductible plan, Dave, at least you will be paying attention to the price. Not so much anybody else with "insurance".
3)Lobbying money skews everything.
4)All that said, a public option could make sense, and certainly wouldn't hurt if in fact it were an option.
5)BUT if there were a way to provide a public option with choice, and make it transparent to an ordinary guy (NOT like Medicare part D)it would likely have a better outcome.

Pharmacy Technician has a lot of good points.

By curiouser_alice (not verified) on 25 Jun 2009 #permalink

From a person on the front lines. I am 62 and have just sold my business. I am also an asthmatic...not all the time, but enough to scare the insurance companies. I noted that the Advair 250 I use every day costs $255 from our local drug company in the area if you don't have any drug insurance. Even with some drug help, it is $70. I now have a $5,000 deductible and 75/25 after the deductible is met from the only company to step forward. Wow! I never thought I would be in this situation...never. I have NEVER asked for anything --- no unemployment, nothing in my life. I have always paid taxes, plus.

The reality for me is that this $5,000 deductibe will cost me $305-$321 monthly. I really cannot afford any of this and certainly cannot afford a $5,000 fee if I get sick. My new insurance company will pay for anything "generic", but nothing I take comes in generic form. Every insurance company's monthly charge for a $2500 deductible was far too much for me.

Of course, I am writing my senators in this state.
Why is our country so far down the list on health care reform? It's in Canada, the UK, France. If our elected officials are not working for us, then they are working for themselves and it's time to make their names very public.

Right now like many Americans, I'm angry!

By Judith Raterman (not verified) on 24 Jul 2009 #permalink

Such resolutions are passed virtually every day in the House with virtually no one present, passed by unanimous consent with maybe 3 or 4 people in the entire chamber. They're passed as a purely perfunctory matter without anyone ever objecting to them. Until now.

Why can't the people of this country come to grips with the fact, that reform of anything is impossible without political reform-our countries leaders are corrupt and corrupted by big money, and until its influences are neutralized in the halls of congress, very little is possible regardless of the popular will