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Sabotaging Obamacare Is a Lucrative Endeavor for Some | The Nation

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Lee Fang

Lee Fang

Investigating the intersection of politics, lobbying and public policy at RepublicReport.org.

Sabotaging Obamacare Is a Lucrative Endeavor for Some


Senator Ted Cruz, R-Texas, greets supporters after addressing thousands of tea party activists at the U.S. Capitol. (AP Photo/J. Scott Applewhite)

To gain steam for his initiative to tie funding of the government to defunding Obamacare, Senator Ted Cruz appeared at events over the summer with the Tea Party Express, a political action committee. “Either continue funding the government without giving one more dime to Obamacare, or shut down the government,” demands Tea Party Express chair Amy Kremer.

The Tea Party Express, in turn, has sponsored fundraising drives to help “elect more leaders like Ted Cruz.”

One problem for Cruz-acolytes hoping to make their way into office? The Tea Party Express PAC has spent nearly every dollar of the $2.1 million it has raised this year on campaign consultants and fundraising fees, but not a dime in transfers to candidates or on independent expenditures. In previous years, the PAC has funneled much of its proceeds to Russo Marsh and Rogers, a Republican consulting firm in Sacramento, California.

The frantic crusade to screw up the launch of the Affordable Care Act is a sad tale in American politics. If conservatives are successful, even with a short-term government shutdown Cruz and his House GOP allies might achieve, patients will suffer. If young people fail to sign up for health insurance—the stated goal of one Koch-backed front group now airing television advertisements—more will drown under crushing debt if they find themselves in need of serious medical care. But Washington, DC, has a bizarre way of incentivizing harmful behavior, and the sabotage Obamacare campaign is not without its winners.

A set of campaign consultants and insurance agents stand to profit from confusing Americans on the eve of the healthcare reform enrollment date.

The conservative media frenzy over the defunding debate has invigorated donors to many PACs, not just Tea Party Express. The Senate Conservative Fund PAC recorded its largest-ever fundraising hauls last month, though it spends way more on candidates and on candidate ads than the Tea Party Express. Still, the Jim DeMint–linked PAC expended nearly half its coffers on administrative, research and fundraising payments this year. FreedomWorks, the RNC and the Club for Growth have hopped on the Cruz campaign to raise funds by advocating the repeal of Obamacare. For a non-federal election year, at least these PACs are doing well.

The rigid anti–healthcare reform politics of the Koch brothers is also having a stimulative effect upon a small circle of Republican consultants. Americans for Prosperity, the largest Koch-owned front, pays the traditional 15 percent commission rate on all their television buys—the latest round going to Target Enterprises, a Sherman Oaks, California-based GOP media company. And with a seemingly endless appetite for anti-Obamacare paid media and anti-Obamacare grassroots organizers, Koch makes good on its claim of being a stellar job-creator, at least for jobs in right-wing political advocacy.

The New York Times rightfully notes in an editorial that many other conservative advocacy groups, like the National Liberty Federation, have latched onto the Obamacare fight, viewing the healthcare reform debate as little more than opportunity to raise a few bucks.

The second and less noticed benefactor of some of the more malicious attacks upon healthcare reform are health insurance brokers. Health insurance brokers make a living by selling health insurance and collecting a commission for every person or group they enroll. With healthcare reform set to provide easy access to health insurance options, free of charge, many in the health insurance agent industry view the Obamacare rollout as a death sentence. In recent months, the broker industry has mobilized to erect obstacles for the dozens of community group “navigators,” organizations tapped to spread the word about how to enroll in the exchanges.

In Georgia, under influence from health insurance agent lobbyists, the state passed a law that prohibits navigators from providing advice “concerning the benefits, terms, and features of a particular health benefit plan.” Other states have thrown up licensing laws in an effort to curtail navigators from being able to do, well, anything.

The Center for Public Integrity’s Nicholas Kusnetz has done some of the most interesting investigative reporting on this side of the story, revealing that the Independent Insurance Agents and Brokers of America and the National Association of Health Underwriters have orchestrated a multi-pronged attack on Affordable Care Act navigators. The industry, which has secured anti-navigator laws in sixteen states, has poured some $7.5 million into state campaigns since 2010.

While brokers claim they seek only to ensure patients are not scammed by “unlicensed” navigators, in reality, blocking competition seems to be the primary motivation. Last month, the Independent Insurance Agents and Brokers of America released a statement endorsing an effort by Congresswoman Cathy McMorris-Rodgers (R-WA) to repeal all of the funding for the navigators programs. Notes from a lobbying association for insurance agents in California warned brokers before a visit to Sacramento: “If we don’t [lobby lawmakers] they will not think it will matter that much when they allow the unlicensed “navigators” to solicit your book of business!!”

Several community groups that had signed up to participate in the navigators program have now backed out, citing political pressure from Republican politicians. The House Oversight Committee, led by Congressman Darrell Issa (R-CA), and Republican attorneys general have harassed several navigator groups with lengthy questionnaires and other demands.

Some anti–healthcare reform activists are truly motivated by their convictions. But others stand to gain financially from making sure their fellow Americans have problems signing up for health insurance.

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