The Healthcare-Reform Hypocrisy Sweepstakes

One thing everybody agrees on is that somebody else should bear the cost of better healthcare.

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Most people with a stake in the U.S. healthcare system agree there are deep problems that must be fixed. As long as somebody else pays for it.

Virtually all of the problems reformers are struggling to solve—relatively poor health outcomes, medical bankruptcies, nearly 50 million uninsured—derive from one überproblem: Healthcare in America costs too much. So as Congress finally gets close to producing actual reform legislation that could become law, just about every interest group with a Washington lobbyist is fighting intensely to make sure it doesn't get stuck with the bill.

[See how Big Pharma wins from healthcare reform.]

Don't get me wrong. Everybody thinks healthcare reform is a great idea. "The business community," for instance, "is eager to work with Congress to reform the healthcare system," according to the U.S. Chamber of Commerce. The insurance industry supports reform "that covers all Americans, improves quality, and puts the healthcare system on an affordable, sustainable path." Drug companies favor "comprehensive healthcare reform that would provide all Americans with high-quality health coverage." Kumbaya.

It's just that many of the groups that embrace reform happen to oppose key provisions of the $829 billion plan proposed by the Senate Finance Committee, generally considered the starting point for whatever a final bill will look like. Industry groups are even more hostile to the idea of a "public option" that would set up a new agency like Medicare to compete with private insurance plans, which is a key part of reform legislation in the House of Representatives. It's almost as if some of the groups most vocal about the need for reform don't actually want it. Hmmm.

Here are some of the inconsistencies in the positions of organizations with big lobbying efforts:

Small business. Companies with fewer than 50 workers could be the biggest beneficiaries of a better healthcare system, because small businesses typically pay more for insurance than big ones or can't afford to offer health coverage at all. The National Federation of Independent Business, the main lobbying group for small businesses, has pushed for more competition among insurance companies, citing studies that show that a small number of big insurers dominate the market in most states, which drives up premiums. And most small businesses that offer healthcare can afford to offer only one plan to their workers. But the NFIB doesn't want a government plan to be part of that competition, because it wouldn't be fair. Instead, NFIB has stated that the same insurers now strangling small businesses "can meet the challenge and can be held accountable to provide solutions that lead to lower costs and greater competition." As long as the government forces them to, that is.

[See 4 countries with better healthcare than ours.]

Big business. Fortune 500 companies pay a big chunk of the health insurance premiums that go up by two or three times the rate of inflation every year, and lowering those costs is a major corporate priority. But please, regulate somebody else, and leave the majority of big employers alone. Industry groups like the U.S. Chamber of Commerce viciously fight most regulation, but on healthcare, the chamber advocates more regulation of one industry—health insurers—to make insurance cheaper for all other big industries. The chamber also opposes a public option, even if that would mean lower costs for consumers, because it would be uncompetitive and create a "massive new bureaucracy," which presumably would be more onerous than the massive existing healthcare bureaucracy. But like the NFIB, the chamber favors compulsory competition among insurance companies and hopes the government will build a "robust marketplace" for insurance, to drive down premiums. Long live free enterprise.

[See why postal-style healthcare might not be so bad.]

Labor unions. The AFL-CIO and other labor groups insist upon a public option, arguing that it's essential in order to draw more people into the system, lower costs, improve quality, and cover the uninsured. But the same unions oppose the Senate Finance plan to tax the most generous health insurance plans—since many unions have negotiated such plans for their workers. By taxing "Cadillac" healthcare plans, the Senate Finance plan would raise $215 billion over 10 years, according to the Congressional Budget Office, which makes it one of the most effective ways to raise money to help pay for other provisions—like a public option. But the unions want to raise money for the reforms they favor through fees and cutbacks on somebody else, not their own members.

[See why health insurers make lousy villains.]

Health insurers. Big insurers like Aetna, UnitedHealth, Cigna, and the nonprofit Blue Cross and Blue Shield system support reform in general because they could gain up to 30 million new customers if more people were covered. But the fewer new customers, the less they like reform, and the whole industry is now having second thoughts. The surest way to generate new insurance customers is to force people to buy coverage, which is another provision of the Senate Finance plan. Good for insurers. But the insurers don't feel the fines levied on violators would be severe enough, which means people would continue to go without insurance, and some of those new customers would fail to materialize. Two new studies (one here and one here) predict there will be rising costs for everybody, along with plagues and locusts, if the insurers don't get their way. (As a general rule, made-to-order industry studies like these always exaggerate the costs of new regulations and never mention the ways profit-making businesses will adapt in order to keep making money.)

[Read about corporate America's identity crisis.]

Many other interest groups favor reforms that are cheap, easy, or funded by somebody else, while opposing measures that would place a burden on them. And hardly anybody has offered to pay a fair share, since that's a suckers' game that nobody else is willing to play. Add it all up, and the battle over healthcare reform makes America looks like a nation of kindergartners running up to a table of cookies, each determined to grab more than he's been apportioned. Maybe they'll keep making more cookies.

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  • Rick Newman

    Rick Newman is the author of Rebounders: How Winners Pivot From Setback to Success and the co-author of two other books. Follow him on Twitter or e-mail him at

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