The Affordable Care Act, Part One: the Public Option

This is the first of two blog posts which will discuss the role that corporate influence and campaign contributions played in the development and passage of  the Patient Protection and Affordable Care Act, also known as Obamacare. This post discusses the demise of a proposed government-run public insurance option The next post will detail the significant concessions made to the pharmaceutical industry with regard to prescription drug pricing for Medicare.

One of the signature legislative accomplishments of President Barack Obama’s first term was the passage of the Patient Protection and Affordable Care Act (PPACA), commonly referred to as ‘Obamacare.’ The goal of this federal legislation was to make health insurance more affordable and to expand healthcare access to a greater number of Americans. Two major features of the PPACA are an expansion of Medicaid to individuals with incomes up to 133% of the federal poverty line and an individual mandate which requires that nearly all Americans above this income level purchase health insurance.  

Republican opponents of Obamacare have frequently criticized the law as a “government takeover of healthcare,” a statement which Politifact dubbed its ‘Lie of the Year’ in 2010. Despite criticism from conservatives, who assert that the individual mandate is a socialistic infringement on personal liberty, the concept of a health insurance mandate was in fact derived from a healthcare reform plan originally  promoted by the Heritage Foundation, a conservative think tank, in the 1980s. Furthermore, as a result of intense lobbying efforts and well-placed campaign contributions by  health insurance and pharmaceutical companies, much of the law is designed to protect and increase the power and profits of those corporations.

During Congressional negotiations over the health insurance reform bill that would eventually become the PPACA, several provisions were proposed by Congressional Democrats to reduce the healthcare costs of American citizens and ensure accountability and competition in the insurance market . The most widely discussed of these provisions was a government-administered public health insurance program, also known as the ‘public option’, proposed by Senate Democrats including Chuck Schumer (D-NY) and Tom Carper (D-DE). The concept of a ‘public option’ was supported by President Obama during his 2008 campaign. In a campaign speech, then-Senator Obama said that the ‘public option’ would “force the insurance companies to compete and keep them honest.” When he became President, however, Obama dialed back his once-enthusiastic support for a ‘public option,’ calling it a mere “sliver” of overall healthcare reform during a speech to Congress in 2009. Subsequent reporting in the New York Times revealed that Obama likely promised representatives of the hospital industry  that a ‘public option’ provision would not be passed into law in exchange for their political support for the final healthcare law.

Other likely factors in the ultimate demise of the ‘public option’ were lobbying efforts and campaign contributions made by the healthcare industry to members of Congress who would prove integral to shaping the PPACA. For example, Sen. Max Baucus, chairman of the Senate Finance Committee and a key player in healthcare reform negotiations, has received over $130,000 in campaign contributions from the healthcare company Aetna alone since 2007, according to Open Secrets. Sen. Baucus opposed the inclusion of a public option in the federal healthcare law. Another influential negotiator and strong opponent of the ‘public option,’ Sen. Joe Lieberman (I-CT), received about $60,000 in campaign contributions from health insurance and health services companies during the same period.

The opposition of these two Senators, as well as others with close ties to the insurance industry such as Ben Nelson (D-NE) and Olympia Snowe (R-ME), towards the public option all but ensured that the provision would not be included in the final bill. Despite current House Speaker Rep. John Boehner’s (R-OH) assertion in October 2009 that he was “still trying to find the first American to talk to who’s in favor of the public option,” public opinion polls consistently showed the public option proposal receiving the support of a solid majority of Americans.

The PPACA, though decried by conservative Republicans as a “government takeover of healthcare,” is in fact the product of legislative and executive branches which were, and continue to be, heavily influenced by the lobbying efforts and campaign donations of the health insurance industry. The enactment of policies  such as the ‘public option’ would increase the quality and affordability of healthcare for millions of Americans. The failure of the government to pass meaningful healthcare reform in an effort to protect the profits of insurance companies demonstrates the strong influence of corporate entities in determining the outcome of federal legislation.


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