Dems’ Health Insurer Bailout Follows Bundled Checks from the Industry’s Lobbyists

Health insurance lobbyists have collected nearly three-quarters of a million dollars for the DCCC so far this cycle.

Dems’ Health Insurer Bailout Follows Bundled Checks from the Industry’s Lobbyists
Speaker of the House Nancy Pelosi (D-Calif.) discusses the stimulus bill known as the CARES Act.

Throughout the coronavirus pandemic, progressives have argued that a single-payer health care system would prevent people who lose their jobs from going without health care and further exacerbating the public health crisis.

“Medicare for All means never losing your health insurance if you lose your job,” Sen. Bernie Sanders (I-Vt.) tweeted on March 26, the day the Labor Department announced that a record 3.3 million people had filed for unemployment insurance. (The unemployment figure has since risen to 17 million, and it is expected to keep increasing.)

But the Democratic leadership in Congress, none of whom are among the 118 cosponsors of the Medicare for All Act, have embraced a different approach. The leaders are planning to include a measure in the next coronavirus package to expand subsidies for the COBRA health insurance program, allowing people who lose their jobs to keep the same insurance plan that their employer had made available to them. Under the plan, which was viewed by Vox, the federal government would pay the full cost of the premiums to private health insurance companies to keep laid-off people on their plans. 

The COBRA expansion would not provide coverage to people who become unemployed but were not receiving coverage through their employers. It would also not cover people’s deductibles. 

Progressive advocates call the proposal a handout to the insurance industry. “The Democrats could push to simply expand Medicaid, but instead they are pushing new subsidies for private health insurance companies,” David Sirota, a journalist and former Sanders campaign staffer wrote on Twitter. 

“This proposal should be favored by providers, since it will increase their likelihood of receiving higher commercial rates from these workers,” Katherine Hempstead, a senior policy adviser at the Robert Wood Johnson Foundation, told Vox.

The Democrats’ proposal mirrors a recommendation put forward recently by the health insurance industry. Less than a week before the Democrats floated their plan, the presidents and CEOs of Blue Cross Blue Shield and America’s Health Insurance Plans (AHIP), the health insurance industry’s top lobbying group, sent a list of policy proposals to Congress including a recommendation that it provide full federal subsidization of COBRA premiums.

While House Democrats are generally more open to expanding government health programs than the Republicans, the Democrats’ campaign arm has deep financial ties to the for-profit health insurance lobby.

So far in the 2019-20 election cycle, lobbyists who represent the health insurance industry have raised more than $736,000 for the Democratic Congressional Campaign Committee (DCCC), the campaign arm of House Democrats that works to protect incumbents against Republican and progressive challengers. The contributions from health insurance lobbyists make up nearly a third of all the bundled lobbyist contributions the DCCC has reported to the Federal Election Commission (FEC) this cycle, and many of the lobbyists have bundled checks for the DCCC in previous cycles as well.     

The Republican equivalent to the DCCC, the NRCC, has not reported any lobbyist bundlers to the FEC since 2013.

David Thomas, a partner at Mehlman Castagnetti Rosen & Thomas who is registered to lobby for AHIP and Blue Cross Blue Shield, has bundled $158,500 for the DCCC so far this cycle, according to FEC records.  Thomas has lobbied for AHIP since 2006 on issues including “Medicare expansions and Medicare for All,” “Tax exclusion capping the employer exclusion on health care expenditures,” and Medicare Advantage, a federal program that pays private insurance companies to offer plans to Medicare beneficiaries. 

Mehlman Castagnetti Rosen & Thomas lobbyists have had Pelosi’s ear on health care issues in the past. Last year, partner Lauren Aronson was among the small handful of experts advising the Speaker on drug pricing legislation. Arsonson is also the executive director of the Campaign for Sustainable Drug Pricing, an industry coalition whose members include AHIP and Blue Cross Blue Shield. 

Lobbyist Steve Elmedorf, former chief of staff for past Democratic leader Dick Gephardt, has bundled $299,500 this cycle. Elmendorf, a partner at Subject Matter, has lobbied for UnitedHealth Group, the largest health insurer in the U.S., since 2007. In September 2009, hours after Speaker Nancy Pelosi (D-Calif.) announced she was backing away from including a public option plan in the Affordable Care Act, Elmendorf sent an email announcing he would be holding a $2,400 per person fundraiser for Pelosi.

Elmendorf’s old boss, Dick Gephardt, is also a DCCC bundler, collecting $106,000 for the organization this election cycle. Gephardt is not personally registered to lobby for the health insurance industry, but his firm, Gephardt Group, has been paid $1.7 million in lobbying fees by UnitedHealth Group since 2013. 

DCCC lobbyist bundler John Gonzalez, who has raised $163,500 for the group this cycle, represents health insurers Cigna and Innova, as well as the National Association of Healthcare Underwriters, a health insurance industry trade group. 

Former Democratic Rep. Allyson Schwartz, now president and CEO at Better Medicare Alliance, has raised $39,000 for the DCCC this cycle. Better Medicare Alliance is a nonprofit lobbying group that says its mission is to support the Medicare Advantage program. Its website lists multiple private insurance industry allies, including UnitedHealth Group, Aetna, and Humana. Schwartz, who represented a district in suburban Philadelphia from 2005 to 2015, was elevated in 2011 to a leading candidate services in the Democratic Congressional Campaign Committee.

“These contributions are made at her request in accordance with all reporting requirements and are not related to her work at Better Medicare Alliance, nor are they associated with any events or lobbying effort” a spokesperson for Schwartz told Sludge. “Further, these contributions were solicited and made before the height of the coronavirus pandemic and before there was any mention of recovery legislation.”

According to tax documents reviewed by Sludge, Better Medicare Alliance and AHIP have shared a common vendor: APCO Worldwide, a PR firm that is notorious for setting up front groups for corporate interests. A pamphlet archived by the University of California, San Francisco reveals APCO’s pitch for corporate clients: “We use political campaign tactics to create an environment in support of our client’s legislative and regulatory goals…We utilize the most effective, up-to-date technology and campaign tactics to help you achieve your legislative and regulatory goals,” the pamphlet reads. UnitedHealth’s Head of US Government Affairs, Michael Tuffin, who oversees the company’s lobbying operations, formerly worked simultaneously in senior positions at APCO Worldwide and AHIP, according to his LinkedIn bio

Sen. Sanders and Rep. Primila Jayapal (D-Wash.) recently introduced legislation to guarantee health care to all Americans during the coronavirus pandemic by empowering Medicare to pay the costs of treatment for the uninsured throughout the course of the crisis. 

None of the lobbyists mentioned in the report besides Schwartz responded to Sludge’s inquiries regarding their DCCC bundling practices and their communications with Democratic leaders. 

The congressional portals for lobbying activity do not make complete, standardized data available to public watchdogs, so lobbying reports must be queried manually, meaning it is difficult to quantify the extent of industry spending on a policy question. Any relevant lobbying activity that is not tagged with an issue category, for example “Health,” might not be included in a given search, and the more-detailed information in individual reports about lobbying topics (such as bill numbers or place names) is not available to download.

CORRECTION: This article previously stated that Better Medicare Alliance president and CEO Allyson Schwartz is a lobbyist.

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