Republicans and the Insurance Industry

REPUBLICANS AND THE INSURANCE INDUSTRY….The conventional wisdom about the Medicare prescription drug bill is that it was a huge giveaway to the pharmaceutical industry. And it was. But the real payoff was to the insurance industry, one of the Republican Party’s favorite special interest groups.

Today, the Congressional Budget Office reports on the latest valentine from the GOP to the insurance industry. It turns out that Republicans met in closed session last month to make technical changes to a budget cutting bill that saved the industry $22 billion:

The Senate version would have targeted private HMOs participating in Medicare by changing the formula that governs their reimbursement, lowering payments $26 billion over the next decade. But after lobbying by the health insurance industry, the final version made a critical change that had the effect of eliminating all but $4 billion of the projected savings, according to CBO and other health policy experts.

….”It happens in the dead of night when lobbyists get a [Republican lawmaker] in the corner and say, ‘We’ve got to have this,’ ” said Rep. Fortney “Pete” Stark (Calif.), the Democrats’ point man on Medicare issues. “It’s a pattern that just goes on and on, and at some point the public’s going to rise up.”

[Senate Finance Committee Chairman Charles] Grassley disputed the CBO’s interpretation of the change as “ridiculous,” dismissing what appears to be a major insurance industry victory as merely a mistake in CBO calculations, not a substantive policy change. He said he accepted the policy change because he “didn’t see a big difference from the Senate position and the conference position.”

Indeed. Not a “big difference.” Then why did the insurance industry lobby so desperately to get it passed?

Read the whole thing. It’s another good example of how minor technical changes with huge consequences get inserted into conference reports with no oversight from either the public or from Democrats. Only the lobbyists and the GOP know what’s going on.

And it works pretty well. $22 billion is a pretty good payoff for the insurance industry’s $24 million in contributions to Republicans during the 2004 election cycle, isn’t it? And it all comes out of your pocketbook.