Obama Reignites K Street Lobby Fight

Posted February 22, 2010 at 6:48pm

After a short pause in their high-profile lobbying campaigns, stakeholders in the health care reform debate resumed their noisy effort Monday as they drew clear battle lines over President Barack Obama’s new blueprint for an overhaul.

That blueprint, which came out in advance of a Thursday bipartisan health care summit at the White House, attempts to clamp down on skyrocketing insurance premiums by setting up a national review board. Obama’s proposal drew a sharp rebuke from the insurance industry, whose lobbyists argued that capping rates would not deal with the underlying problem of growing medical costs.

Leading business groups, which have long been at odds with Democrats over their health care plans, wrote to Obama that he should scrap the mandates and tax increases in his plan and instead accept a modest proposal that includes tort and insurance reforms.

Meanwhile, progressive groups and organized labor praised the president for trying to jump-start the ailing health care reform debate, even though the plan does not have a public insurance option, which liberals favor, and does include a tax on high-end, or “Cadillac,” plans that these groups oppose.

“This gives a push forward to build on the substantial work that has already been done,” said Richard Kirsch, the national campaign manager for Health Care for America Now, a liberal, union-backed group. Kirsch said that in the past few weeks, all sides have “taken a breather from every single hiccup making front-page news.”

But with Obama set to hold a daylong bipartisan health care session Thursday, the frenzied lobbying activity has returned with HCAN planning a rally on Capitol Hill on Wednesday.

Despite past opposition to the tax on Cadillac health care plans, Kirsch said liberals are more receptive to Obama’s proposal because it sets a higher threshold on the tax and delays its implementation from 2013 to 2018.

Liberal groups also applauded the president’s proposal to create a new federal Health Insurance Rate Authority to provide oversight to states, which are now responsible for rate review.

The White House has cited Anthem Blue Cross of California’s intention to raise premiums by 39 percent as a rationale for more federal action.

But Karen Ignagni, president of America’s Health Insurance Plans, said insurance companies were being unfairly blamed by lawmakers for the rate increases.

“There is a heavy dose of politics at work here,” she said in a conference call with reporters.

Ignagni said health insurance rates were rising as healthier people dropped insurance policies because of the poor economy. That has left the health care plans with the more expensive burden of carrying the remaining less healthy customers. In addition, she said rising costs were attributable to underlying medical costs, not administrative costs of the insurance companies.

But others welcomed more national oversight, arguing that state insurance regulation doesn’t work.

“State regulation is so hit and miss and so weak,” said Richard Coorsh, a spokesman for the Federation of American Hospitals.

Coorsh called Obama’s plan “an improvement over the Senate bill.” He said hospitals favored a provision in Obama’s plan that would fill gaps, referred to as “doughnut holes,” in coverage for prescription drugs for seniors — an issue that the Senate bill does not completely address. Filling that gap was also a top priority for AARP, the nation’s largest senior citizens organization.

“While we’re still awaiting further details, today’s proposal does include some key priorities for our members and millions of Americans in Medicare such as lowering prescription drug costs by addressing Medicare’s ‘doughnut hole’ coverage gap,” AARP Vice President Nancy LeaMond said in a statement.

Obama’s plan also does not appear to alter the $155 billion that hospitals had already agreed to chip in to help fund health care reform.

However, the president’s plan, posted online, would increase an assessment on brand-name drug companies from $23 billion to $33 billion, although it would delay the implementation by one year.

Former Rep. Billy Tauzin (R-La.), the president of Pharmaceutical Researchers and Manufacturers of America, recently announced he would be stepping down this spring. There has been speculation that his departure was spurred by dissatisfaction among some of the group’s members, who were unhappy with PhRMA’s concessions to Congress and expensive advertising efforts to promote the plan.

The Generic Pharmaceutical Association said it was disappointed in a provision inserted by the White House that would prevent a brand-name drug company from paying a generic company to keep its drug off the market for a period of time. The administration argued that such deals delayed lower-cost generic drugs from being available to consumers. But the generic drug association said that such settlements between brand-name and generic companies avoided lengthy and expensive litigation.

Obama is also likely to face stiff opposition from many in the business community, led by the U.S. Chamber of Commerce, which has already spent millions of dollars trying to defeat the Democrats’ plan.

Officials with the chamber and other prominent business groups sent a letter Monday to the president in which they warned against a number of provisions in his plan, including fees on employers with more than 50 workers who do not provide health insurance and taxes on businesses and individuals.

The proposals offered by the business groups largely resembled Republican health care reform ideas that would cost far less than the Democratic plans but that analysts said would not substantially reduce the number of uninsured. The proposals included setting up insurance exchanges and multistate purchasing and incentives for wellness and disease prevention programs.

The president’s plan is also likely to reignite the abortion wars, with opponents of abortion rights particularly incensed that Obama’s blueprint does not include the restrictive language in the House bill.

“The president promised the American people that no federal dollars will be used to fund abortions, and federal conscience laws will remain in place. Incredibly, his health care proposal doesn’t contain a single mention of the life issue,” said Charmaine Yoest, president of Americans United for Life.