Research Briefing

Why Kucinich, Fellow Liberals Called Obama’s Government-Run Health Care Experiment A Windfall For Health Insurance Companies

KUCINICH AND FELLOW LIBERALS ALL AGREE: OBAMA’S GOVERNMENT-RUN HEALTH CARE BILL IS A “BAILOUT” FOR INSURANCE COMPANIES

Nine Days Ago, Rep. Dennis Kucinich (D-OH) Said Senate Dems’ Bill Is “A Giveaway” And “A Bailout” To Insurance Companies. “This bill represents a giveaway to the insurance industry, $70 billion a year, and no guarantees of any control over premiums, forcing people to buy private insurance, five consecutive years of double-digit premium increases. … I mean, I’m sorry. I just don’t see that this bill is the solution. The insurance companies are the problem and we’re giving them a version of a bailout.” (MSNBC’s “Countdown With Keith Olbermann,” 3/8/10)

Sen. Bernie Sanders (I-VT) Said Senate Dems’ Bill “A Massive Bailout Of The Insurance Companies.” “Clearly, when people say that this bill has many serious flaws in it, they’re right. I worry very much about a massive bailout of the insurance companies, of the drug companies, of escalating prices. And that is the reality that we got to deal with.” (Jane Norman, “Oh, The Weather Outside Is Frightful -- And So Are The Health Care Politics,” CQ Health Beat, 12/18/09)

Rep. Lynn Woolsey (D-CA) Said Senate Dems’ Bill “Will Leave Taxpayers Hold The Bag For A Huge Give-Away To The Private Insurance Industry.” (Rep. Lynn Woolsey, “Senate Healthcare Compromise A Corporate Giveaway With Hidden Costs To Taxpayers,” The Hill’s “Congress Blog,” 12/17/09)

Rep. Louise Slaughter (D-NY) Said Senate Dems’ Bill A “Windfall For Insurance Companies.” “The Senate health care bill is not worthy of the historic vote that the House took a month ago … under the Senate plan, millions of Americans will be forced into private insurance company plans… That alternative will do almost nothing to reform health care but will be a windfall for insurance companies.” (Rep. Louise M. Slaughter, “A Democrat’s View From The house: Senate Bill Isn’t Health Reform,” CNN, 12/23/09)

Former DNC Chairman Howard Dean: “The Senate Bill Is Essentially Written By The Insurance Companies.” (Howard Dean, MSNBC’s “The Rachel Maddow Show,” 1/19/10)

AFL-CIO President Richard Trumka Called Senate Dems’ Bill “Too Tilted Toward The Insurance Industry.” (Seth Michaels, “Trumka: Senate Health Care Bill Must Change To Be Real Reform,” AFL-CIO Blog, 12/17/09)

Markos Moulitsas On Senate Dems’ Bill: “Insurance Companies Win. Time To Kill This Monstrosity Coming Out Of The Senate.” (Mark Moulitsas, Twitter, 12/14/09)

FireDogLake’s Jane Hamsher: “Top 10 Reasons To Kill Senate Health Care Bill 1. Forces You To Pay Up To 8% Of Your Income To Private Insurance Corporations -- Whether You Want To Or Not.” (Jane Hamsher, “Top 10 Reasons To Kill The Senate Health Care Bill,” The Huffington Post, 12/21/09)

MSNBC’s Ed Schultz Said “The Only People Who Like This Current Bill Right Now … Is The Insurance Industry” “Ed Schultz, an influential liberal radio host, declared on his ‘Ed Show’ on MSNBC: ‘The base is restless. They are wandering in the wilderness, Mr. President. … They want to know, where are you? … Right now, Mr. President, your base thinks you’re nothing but a sellout — a corporate sellout, out that. … The only people who like this current bill right now, Mr. President, is the insurance industry — they get a bunch of new customers.’” (Mike Allen, “Left Rebels Against Health Reform,” Politico, 12/17/09)

BECAUSE INSURANCE COMPANIES WILL RECEIVE HUNDREDS OF BILLIONS IN GOVERNMENT SUBSIDIES WHILE PREMIUMS STILL RISE FOR AMERICANS

$400 Billion In Government Subsidies To Purchase Health Insurance In Senate Dems’ Bill Will Go Straight To Insurance Companies Over The Next Decade. “The health care reform is in fact a major tax cut. Not a tax increase, but a major tax cut. The Senate-passed health care bill provided more than $400 billion in tax cuts for Americans to buy health insurance.” (Sen. Max Baucus (D-MT), Floor Remarks, 3/4/10)

• Because Subsidies Are “Payable In Advance Directly To The Insurer.” “The Committee Bill provides a refundable tax credit for eligible individuals and families who purchase health insurance … The premium tax credit, which is refundable and payable in advance directly to the insurer, subsidizes the purchase of certain health insurance plans through the state exchanges.” (“America’s Healthy Future Act Of 2009,” Senate Finance Committee Report, 10/19/09)
  
  
• Subsidies Obama Opposed During The Campaign Because It Was A Giveaway To Insurance Companies. “But the new tax credit [for health insurance] he’s proposing? That wouldn’t go to you. It would go directly to your insurance company – not your bank account.” (Sen. Barack Obama Obama, Campaign Remarks, Newport News, VA, 10/4/08)

While Premiums Will Still Rise For Americans Under Obama’s Government-Run Health Care Plan. “Premiums are likely to keep going up even if the health care bill passes, experts say. If cost controls work as advertised, annual increases would level off with time. But don’t look for a rollback…. ‘There’s no question premiums are still going to keep going up,’ said Larry Levitt of the Kaiser Family Foundation, a research clearinghouse on the health care system. ‘There are pieces of reform that will hopefully keep them from going up as fast. But it would be miraculous if premiums actually went down relative to where they are today.’” (Ricardo Alonso-Zaldivar, “FACT CHECK: Premiums Would Rise Under Obama Plan,” The Associated Press, 3/17/10)

AND MILLIONS OF AMERICANS WILL BE FORCED TO BUY INSURANCE FROM THEM

Senate Dems’ Bill Forces Americans To Purchase Government-Approved Insurance And “Makes Them Criminals If They Don’t Buy It.” “Democracy for America, the successor to the Dean campaign, which is now run by his brother, is out today with an email attacking health care legislation on a vulnerable point: The individual mandate. ... ‘[T]hey say that even without a public option, the bill still “covers” 30 million more Americans. [The bill] requires every single American buy health insurance or break the law and face penalties and fines. So, the bill doesn’t actually “cover” 30 million more Americans - instead it makes them criminals if they don’t buy insurance from the same companies that got us into this mess.’” (Ben Smith, “Dean Group Attacks Mandate,” Politico’s “Live Pulse” Blog, 12/16/09)

Insurance Companies Fought Against Weakening The Individual Mandate Because They Want To Bring In New Customers, Generate Windfall Profits. “[I]nsurance companies are pushing back against changes to the latest Senate health-care bill that ease the penalties for Americans for don’t carry health insurance ... Senators refining the legislation last week narrowed the scope of a new requirement that all Americans carry health insurance out of concern it penalized people who can’t afford to buy it ... The changes mean the new mandate would apply to two million fewer people, largely those with lower incomes ... Key industries bought into the measure -- and agreed to absorb cuts in reimbursements -- on the expectation that millions of new customers would be brought into the health-care system.” (Janet Adamy & Greg Hitt, “Insurers Fight Bid To Ease Penalties In Health Bill,” The Wall Street Journal, 10/6/09)

• MSNBC’s Ed Schultz: “Big Insurers Have Really No Incentive To Win Our Business Because We’re Going To Be Forced To Give The Business To Them.” (MSNBC’s “The Ed Show,” 12/21/09)

Which Could Be Challenged In Court As Unconstitutional. “A major component of the health bills grinding through Congress right now is a new requirement that nearly everyone buy health insurance -- a so-called individual mandate. ... A legal battle could end up in the Supreme Court. Georgetown University law professor Randy Barnett is already gearing up for that. He maintains Congress would be overstepping its powers enumerated in the Constitution if it required people to buy health insurance. ‘Never in the history of the United States has the federal government ever required someone to engage in an economic activity with a private party ...’” (David Welna, “Opponents Threaten Court Battle On Health Mandate,” NPR, 1/18/10)