Press Releases

#ObamaCare: Backroom Deals

Obama’s Promises On Transparency And Ethics Leave Much To Be Desired 

OBAMA PROMISED THAT HEALTH CARE NEGOTIATIONS WOULD BE TELEVISED

PROMISE: Candidate Obama Pledged All Health Care Negotiations Would Be Televised On C-SPAN.  OBAMA: “I’m going to have all the negotiations around a big table. We’ll have doctors and nurses and hospital administrators. Insurance companies, drug companies — they’ll get a seat at the table … But what we will do is, we’ll have the negotiations televised on C-SPAN, so that people can see who is making arguments on behalf of their constituents, and who are making arguments on behalf of the drug companies or the insurance companies.” (Sen. Barack Obama, Remarks During Town Hall Meeting, Chester, VA, 8/21/08)

BROKEN: PolitiFact Rates This Promise Broken: “Obama promised — repeatedly — an end to closed-door negotiations and complete openness for the health care talks. But he hasn’t delivered. Instead of open talks of [sic] C-SPAN, we’ve gotten more of the same — talks behind closed doors at the White House and Congress. We might revisit this promise if there’s a dramatic change, but we see nothing to indicate anything has changed. We rate this Promise Broken.” (Angie Drobnic Holan, “Obama Said He’d Televise Health Reform Negotiations On C-SPAN,” PolitiFact, 7/10/09)

Obama And His Advisers Brokered “Behind The Scenes” Deals To Pass Health Care Reform. “In pursuing his proposed overhaul of the health care system, President Obama has consistently presented himself as aloof from the legislative fray, merely offering broad principles. Prominent among them is the creation of a strong, government-run insurance plan to compete with private insurers and press for lower costs. Behind the scenes, however, Mr. Obama and his advisers have been quite active, sometimes negotiating deals with a degree of cold-eyed political realism potentially at odds with the president’s rhetoric.” (David D. Kirkpatrick, “Obama Is Taking An Active Role In Talks On Health Care Plan,” The New York Times, 8/13/09)

  • Health Industry Lobbyists Negotiated With Senate Finance Committee Chairman Max Baucus (D-MT) And The Obama Administration “In Tandem.” “Hospital industry lobbyists, speaking on condition of anonymity for fear of alienating the White House, say they negotiated their $155 billion in concessions with Mr. Baucus and the administration in tandem. House staff members were present, including for at least one White House meeting, but their role was peripheral, the lobbyists said. Several hospital lobbyists involved in the White House deals said it was understood as a condition of their support that the final legislation would not include a government-run health plan paying Medicare rates — generally 80 percent of private sector rates — or controlled by the secretary of health and human services.” (David D. Kirkpatrick, “Obama Is Taking An Active Role In Talks On Health Care Plan,” The New York Times, 8/13/09)

The Washington Post’s Ruth Marcus: Obama’s White House Played A “Political Version Of ‘Deal Or No Deal.’”  “The White House, playing the political version of “Deal or No Deal,” is backing away, rather unconvincingly, from its initial confirmation. In New Hampshire on Tuesday, Obama raised the prospect of getting more from drug companies. But the episode underscores the dangerously wide gap between Obama’s idealistic campaign-trail promises and the gritty realities of governing.” (Ruth Marcus, Op-Ed, “Change We Can’t Believe In,” The Washington Post, 8/12/09)

OBAMA PROMISED SPECIAL INTERESTS WOULD NOT STEER THE POLITICAL PROCESS

PROMISE: Obama Promised The Drug And Insurance Industries Would Not “Buy Every Chair” In The Health Care Debate. OBAMA: “We can bring doctors and patients, workers and businesses, Democrats and Republicans together, and we can tell the drug and insurance industry that, while they get a seat at the table, they don’t get to buy every chair, not this time, not now.” (Senator Barack Obama, Remarks Following The New Hampshire Primary, 1/8/08)

BROKEN: Obama Gave “A Private Inside Track To Special Interests” While Writing ObamaCare. “In cutting deals with hospitals and drug makers, President Barack Obama is giving a private inside track to special interests that’s at odds with his promise to make policy in the open… He pledged to open government and let the public and news media hold his administration accountable… ‘We’ll have the negotiations televised on C-SPAN, so that people can see who is making arguments on behalf of their constituents, and who are making arguments on behalf of the drug companies or the insurance companies,’ he said then.” (Sharon Theimer, “Promises, Promises: Do Obama Deals Break Pledge?” The Associated Press, 7/21/09)

OBAMA’S SPECIAL DEAL WITH UNIONS

Obama Met With Unions To Discuss ObamaCare’s Cadillac Tax.“The presidents of about a dozen labor unions will meet with President Barack Obama on Monday to push him to limit the scope of a proposed tax on high-cost insurance plans.” (Alexander Bolton And Kevin Bogardus, “Obama And Labor Leaders To Square Off Over Tax On High-Cost Health Care Plans,” The Hill, 1/11/10)

  • Then Speaker Nancy Pelosi Admitted That The White House Meeting With Union Bosses Violated Obama’s Campaign Pledge. “Referring explicitly to one of Obama’s campaign pledges, a reporter asked Pelosi whether C-SPAN cameras would be allowed to film the House-Senate negotiations. ‘There are a number of things he was for on the campaign trail,’ she said, without addressing the question.” (Brian Beutler, “Oh SNAP! Pelosi On Obama: ‘There Were A Number Of Things He Was For On The Campaign Trail,’” Talking Points Memo, 1/5/10)

The Obama Administration Gave In To Union Demands To Win Support For ObamaCare. “Democratic negotiators acceded to union demands for a scaled-back tax on high-end health-insurance plans, exempting union contracts from the tax until 2018, five years beyond the start date for other workers.” (Laura Meckler And Naftali Bendavid, “Unions Cut Special Deal On Health Taxes,” The Wall Street Journal’s Election 2012,” 1/15/10)

  • The Obama White House Ceded “Significant Concessions” To Appease The Unions. “The tentative agreement on the tax, which included significant concessions by the administration, was disclosed as leading lawmakers set an informal timetable of Friday for a compromise on the health care bill that Obama made a top priority in taking office a year ago.” (“Labor, White House Have Deal On Insurance Tax,” The Associated Press, 1/14/10)

The Deal Was A “Significant Victory For Unions.” “In a significant victory for unions, the 40 percent excise tax would not apply to policies covering workers in collective bargaining agreements, state and local workers and members of voluntary employee benefit associations through Dec. 31, 2017.” (“Labor, White House Have Deal On Insurance Tax,” The Associated Press, 1/14/10)

Obama’s Campaign Manager And Former Deputy Chief Of Staff Jim Messina Led The Negotiations. Officials said the agreement was thrashed out over more than 15 hours of negotiating at the White House that ended after midnight Wednesday. Participants included Trumka; Andy Stern, head of Service Employees International Union; Anna Burger, head of Change to Win, and the leaders of unions representing teachers, government workers, food and commercial workers, and electricians. Obama’s deputy chief of staff, Jim Messina, was the lead White House bargainer, although Vice President Joe Biden also was involved periodically. (“Labor, White House Have Deal On Insurance Tax,” The Associated Press, 1/14/10)

The Wall Street Journal: White House Extended The Union Deal “To Avoid The Taint Of Political Favoritism.” “Now the highly vaunted excise tax on high-cost insurance plans won’t kick in until 2018, whereas it would have started in 2013 in the Senate bill, and this tax will only apply to coverage that costs more than $27,500. … [T]his is the same $60 billion deal the White House cut in December with union leaders who have negotiated very costly benefits. Now it is extended to all to avoid the taint of political favoritism. While the White House claims to eliminate the ‘Cornhusker Kickback’ … As with the union payoff, what the White House really does is broaden the same to all states…” (Editorial, “ObamaCare At Ramming Speed,” The Wall Street Journal, 2/22/10)

NOTABLE DEALS THAT DEMOCRATS CUT TO PASS OBAMACARE

Obama’s Aides Were Present During The Deal Making Process To Pass ObamaCare In The Congress.  Obama tried to publicly distance himself from the deals, saying he wasn’t in the room when they were struck, even though some of his aides were. The president rankled Reid and House Speaker Nancy Pelosi by criticizing them for doing what generations of their predecessors have done: cut deals.” (Carrie Budoff Brown, “Obama Wants Side Deals Out Of Bill,” Politico, 3/10/10)

Landrieu’s Louisiana Purchase

The Final Passage Of ObamaCare Left In Place The Louisiana Purchase. “Retains $300 million in extra Medicaid aid for Louisiana, which had helped win support for the Senate health bill from Sen. Mary Landrieu, D-La. The state is still struggling to recover from Hurricane Katrina.” (“Cornhusker Kickback Gets The Boot In Health Bill,” The Associated Press, 3/18/10)

ObamaCare’s “Louisiana Purchase” Will Give Louisiana An Extra $4.3 Billion In Medicaid Funds As A Result Of A “Drafting Error.” “Do you remember the ‘Louisiana Purchase?’ I don’t mean Thomas Jefferson’s acquisition of land from Napoleon, but rather Democrats’ acquisition of Sen. Mary Landrieu’s (D., La.) support for the Patient Protection and Affordable Care Act. Landrieu, critics believe, pledged her vote in exchange for gaining $200 million additional federal funds for Louisiana’s Medicaid program. Except that, due to a drafting error, the law ended up giving Louisiana $4.3 billion in extra Medicaid funds — more than twenty times the assigned amount.” (Avik S. A. Roy, “The New Louisiana Purchase: ObamaCare’s $4.3 Billion Boondoggle,” The Atlantic, 3/6/12)

  • The Centers For Medicare And Medicaid Services Said That ObamaCare Will Cost More Because The Law Increased Federal Subsidies To Louisiana Rather Than Decreased Them “As Originally Intended.”  “However, in November 2011, when the Centers for Medicare and Medicaid Services (CMS) tried to make sense of the legislation, they came up with a much larger number: $4.3 billion. This was, in part, because the text of the law didn’t phase out the adjustment in two years, as originally intended, but rather increased the federal subsidy in out-years.” (Avik S. A. Roy, “The New Louisiana Purchase: ObamaCare’s $4.3 Billion Boondoggle,” The Atlantic, 3/6/12)

Louisiana Was Supposed To Receive Only $200 Million Under A Section Of ObamaCare “Whose Main Purpose Is To Ensure That Only Louisiana Benefits.” “Section 2006 of PPACA, a ‘Special Adjustment to FMAP Determination for Certain States Recovering from a Major Disaster,’ was designed to temporarily increase the federal government’s FMAP contribution to Louisiana to the tune of around $200 million. It contains extremely complicated legislative language, whose main purpose is to ensure that only Louisiana benefits from the specified FMAP increase.” (Avik S. A. Roy, “The New Louisiana Purchase: ObamaCare’s $4.3 Billion Boondoggle,” The Atlantic, 3/6/12)

Louisiana Has Already Received More Than $700 Million In Supplemental Medicaid Funds In FY2012 As A Result Of The Deal, And Stands To Receive $3.6 Billion More By 2015. “In fiscal year 2012 alone, the federal government sent about $700 million in supplemental funds to Louisiana’s Medicaid program, with another $3.6 billion to be spent in fiscal years 2013-2015. In FY13, the law changed the feds’ share of Louisiana Medicaid spending from 61 percent to 72 percent: a billion-dollar adjustment for the Bayou State.” (Avik S. A. Roy, “The New Louisiana Purchase: ObamaCare’s $4.3 Billion Boondoggle,” The Atlantic, 3/6/12)

“The Haste And Carelessness” Of The Louisiana Purchase Is “Endemic Of The Legislation, More Broadly.”  “It would be easy to dismiss the Louisiana Lagniappe as a trivial issue: after all, $4.3 billion in a trillion-dollar health-care law is a rounding error. But the haste and carelessness with which Sen. Landrieu’s provision was drafted is endemic of the legislation, more broadly.” (Avik S. A. Roy, “The New Louisiana Purchase: ObamaCare’s $4.3 Billion Boondoggle,” The Atlantic, 3/6/12)

Kerry’s Bay State Kickback

Another “Twist” Discovered In ObamaCare Is A Provision That Will Encourage Providers To “Game The System.” “President Obama’s health care overhaul was supposed to lead to reforms in Medicare’s byzantine payment system. Critics say this latest twist will encourage hospitals and other big players to game the system in a scramble for increasingly scarce taxpayer dollars.” (Ricardo Alonso-Zaldivar, “Health Law Windfall For Massachusetts Hospitals,” The Associated Press, 8/4/11)

Under ObamaCare, Massachusetts Benefits From Loophole While Rest Of Country Loses Out. “Massachusetts hospitals will get $275 million more a year in Medicare payments because of a provision inserted into the nation’s new health care law that benefits the state, angering hospitals across the country that will get less money as a result.” (Liz Kowalczyk, “Medicare Gives State Hospitals $275m Lift,” The Boston Globe, 8/5/11)

Kerry Amendment Makes Hospital Reimbursement Rates A Zero-Sum Game. “Kerry’s amendment requires that the money for Medicare hospital wage reimbursements be a fixed amount nationally, rather than a fixed amount for each state, meaning that any increase for Massachusetts requires a decrease for other states.” (Liz Kowalczyk, “Medicare Gives State Hospitals $275m Lift,” The Boston Globe, 8/5/11)

  • Under ObamaCare, “Political Hardball” Determines Hospital Rates. “Steve Brenton, president of the Wisconsin Hospital Association, said he is ‘extremely upset’ that Massachusetts engineered ‘a money grab’ won through ‘political hardball.’” (Liz Kowalczyk, “Medicare Gives State Hospitals $275m Lift,” The Boston Globe, 8/5/11)

Additional Deals

Former Senator Chris Dodd (D-CT) Was Able To Keep Funding For A Public Hospital In His State. “Keeps $100 million included in the Senate bill that is expected to go for a public hospital in Connecticut sought by Dodd, who is retiring.” (“Cornhusker Kickback Gets The Boot In Health Bill,” The Associated Press, 3/18/10)

Sen. Max Baucus (D-MT) Was Able To Keep Special Benefits For A Small Town In Montanta. “Preserves language won by Baucus permitting many of the 2,900 residents of Libby, Mont., to qualify for Medicare benefits. Some of them have asbestos-related diseases from a now-shuttered mine.” (“Cornhusker Kickback Gets The Boot In Health Bill,” The Associated Press, 3/18/10)

Numerous States Were Able To Secure Billions To Pay For Medicaid. “Provides an additional $8.5 billion over the next decade for 11 states and the District of Columbia to help them pay for the more generous Medicaid assistance they have been providing low-income residents. “These states are Arizona, Delaware, Hawaii, Maine, Massachusetts, Minnesota, New York, Pennsylvania, Vermont, Washington and Wisconsin.” (“Cornhusker Kickback Gets The Boot In Health Bill,” The Associated Press, 3/18/10)

North Dakota, South Dakota, Montana And Wyoming Were Dealt Additional Funding For Hospitals And Doctors. “Maintains a Senate-approved provision giving extra money for hospitals and doctors in North and South Dakota, Montana and Wyoming.” (“Cornhusker Kickback Gets The Boot In Health Bill,” The Associated Press, 3/18/10)

OBAMA’S SPECIAL DEAL WITH DRUG INDUSTRY

To Pass ObamaCare, A Deal Was Made With The Pharmaceutical Industry

Obama Cut A Deal With The Pharmaceutical Industry , Which Countered Obama’s “Reformer” Message To Take On The Pharmaceutical Lobby.“Eager to dismantle barriers to the legislation’s passage, Rahm Emanuel and Jim Messina, a deputy chief of staff, had cut a quiet deal with pharmaceutical industry lobbyists: in exchange for supporting the legislation, the administration would guarantee that it would cost the companies no more than $80 billion. Many White House aides were surprised and alarmed: Obama had campaigned as a reformer who would fight lobbyists and pharmaceutical companies, and now he was cutting a backroom deal with them that looked like a giveaway? David Axelrod and Emanuel, the closest of friends and allies, went back and forth, Emanuel saying that he needed to do what had to be done to pass the bill, Axelrod protesting that this was exactly what they had campaigned against. But Obama, his competitive juices stoked and his most important initiative on the line, did not halt his chief of staff’s horse trading. That was their deal, another aide said: Rahm would try to pass Obama’s bill, but the president had to accept that it wouldn’t look pretty.” (Jodi Kantor, “The Obamas,” 2012, pp. 137-138)

IN THE END, THE HEALTH CARE INDUSTRY IS THE BIG WINNER

Since Obamacare Became Law, “Profits And Share Prices Shot Up At Large Health Insurance Companies.” “Since President Barack Obama signed health care reform into law in March 2010, profits and share prices shot up at large health insurance companies like UnitedHealth Group and WellPoint.” (Jeffrey Young, “Supreme Court Health Care Reform: Businesses Actually Worse Off If Supremes Repeal Law,” The Huffington Post, 3/26/12)

  • Insurance Companies’ “Profit Margins Expand To 8.24 Percent” Since ObamaCare Was Enacted. “Still, the companies’ saw their average operating profit margins expand to 8.24 percent in the six quarters since the overhaul became law, compared with 6.88 percent for the 18 months before it was passed.” (Sarah Frier, “Insurers Profit From Health Law They Fought,” Bloomberg, 1/5/12)

Health Insurance Companies Look To ObamaCare As “A Healthy Source Of New Business.” “Though the industry still opposes some new regulations from the law, companies are looking to health care reform as a healthy source of new business. The law is supposed to create a new marketplace for insurance where Americans have to buy what insurance companies sell and millions will receive subsidies to help pay for it.” (Jeffrey Young, “Supreme Court Health Care Reform: Businesses Actually Worse Off If Supremes Repeal Law,” The Huffington Post, 3/26/12)