Diagnosis for Democracy
Insights into the State of Our Union
A Blog by Rob Tenery, MD


January 10, 2014: It Always Seems to Boil Down to Politics

By Rob Tenery, MD on January 10, 2014

In 2009, when the final vote was taken on The Patient Protection and Affordable Care Act (ACA, Obamacare), it was split along party lines. Since the Democrats held the majority in both Houses of Congress, they already had a distinct advantage.

But, it was the additional deals ‘arranged’ by the administration and the Democratic leadership that were necessary to insure the controversial legislation’s passage. They were the ‘not-so-secret’ promises to certain elected representatives and influential bodies in the health care industry.

There was Democratic Senator Mary Landrieu’s ‘Louisiana Purchase’--- the provision that would provide $300 million in Medicare subsidies for people living in Louisiana. Senator Landrieu denied that her vote on health care reform was contingent on the Medicare subsidy. However, she did not publically commit to supporting the health care reform bill until the subsidy for her home state was included.

In early November, Senator Landrieu stated, in a speech on the floor of the Senate, that she had been mislead when she voted for the ACA in 2010. She was responding to the growing uproar as millions of patients across the country were losing their health care coverage as the dictates of the ACA were being implemented.

With Democratic Senator Ben Nelson, as a key holdout vote on the bill, Senate Majority Leader Harry Reid made a deal with him to allegedly secure his vote, giving the Democrats the 60 votes needed to kill a Republican filibuster. The deal, referred to as the ‘Cornhusker Kickback’ included language giving Nebraska 100 percent federal funding of the Medicaid expansion indefinitely. The deal drew so much fire from critics -- who said it amounted to Nelson selling his vote -- that he asked Senator Reid to remove the permanent Medicaid exemption from the legislation.

However, the real genius of the Obama administration, as opposed to the Clinton task force proposal in 1993, was in the President’s handling of the pharmaceutical industry, AARP and the AMA.

The drug industry backed, what would later be called Obamacare, in return, they were promised a 10-year limit of only an $80 billion cut in prescription drug costs. (A drop in the bucket of their almost $3 trillion in projected revenues over the next decade). They were also given assurances that the administration would continue to work against importing the lower-cost Canadian drugs. All the pharmaceutical industry had to do was put its formidable advertising budget at the disposal of the administration. Of the estimated $120 million spent lobbying for the passage of legislation, the drug companies funded $26.1 million of that total.

A subsidiary of the American Association of Retired Persons (AARP) was the supplier of Medi-gap insurance--- a privately purchased coverage that picked up where Medicare benefits left off. The George W. Bush administration created the Medicare Advantage program that was a lower-cost alternative to the Medi-gap coverage. More than 11 million seniors took advantage of the program that significantly cut into AARP’s Medi-gap revenues. President Obama eliminated subsidies for the Medicare Advantage program that had made the more-expensive Medi-gap coverage more competitive.

Even though over $700 billion in projected funding for the Medicare program would be diverted to cover the new enrollees under the ACA, and although seniors would end up paying more money for their coverage, the leadership at AARP threw its support behind the proposed new law. Appearing to be more concerned with corporate revenues than abandoning the seniors, who comprised its membership, the leadership of AARP donated millions of dollars toward the advertising campaign and lobbying efforts in support of the proposed legislation. Referred to as ‘corporate cronyism’ much of their membership openly rebelled against its leadership.

When the Board of Trustees of the American Medical Association (AMA), and reaffirmed by its House of Delegates (HOD), openly supported the current administration’s proposal to solve the growing problem of the uninsured, it came as a shock to much of the physician-community. A survey by a physician recruitment firm, Jackson & Coker, revealed that only 13% of physicians surveyed agreed with the organization’s decision. Another study, the National Physicians Survey, reported that more than three times as many physicians believed that the quality of the American health care system would ‘deteriorate’ rather than ‘improve’ under the mandates of the ACA and nine out of ten physicians thought the proposed legislation would have a negative impact on their profession.

Several reasons have been floated for the AMA’s surprising support.  The major reason given to the AMA’s membership was that the President would throw his support behind a permanent ‘fix’ to Sustainable Growth Rate (SGR). Since the 1997 Balanced Budget Act first went into effect in 2002, the SGR formula, which is used to calculate levels of Medicare reimbursements to physicians, has not taken a realistic approach to increases in patient volume and the complexity of the science. Therefore, each year physician organizations across the country have groveled at the feet of the representatives in Washington, only to be granted a temporary reprieve from the fee cuts mandated in the Balanced Budget Act. Each year they had been promised a permanent fix. Each year there wasn’t. There was real hope that, with the President’s influence, this time it would be different. It hasn’t been, until possibly this coming year. The flawed SGR formula still looms over their heads. And, the AMA’s already dwindling membership has taken another hit.

The Supreme Court’s ruling, that the ACA was constitutional, as a tax but not a mandate, seemed to seal the fate of those who still held out hope that the controversial law could be overturned. That was until the Republican led House of Representatives decided to block funding for the new legislation. Although the House softened its demands to only delaying implementation of the Individual Mandate clause of the law for one year, Senate Majority Leader Harry Reid used his position so that the continuing resolution sent over by the House never even came to the floor of the Senate for debate. This apparently irresolvable divide was what led to the most recent government shutdown.

Giving him credit, Senator Reid was able to put together a temporary compromise, not necessarily to end the debate over the health care legislation, but to end the government shutdown and raise the debt ceiling. However, it only extends until February 7, 2014. He broke the logjam by eliciting the support of Senate Minority Leader Mitch McConnell. Unfortunately, the real differences between the two parties still exist, but thanks to Senators Reid and McConnell, the federal government is once again up and running.

Did I mention that the bill released by the Senate, passed by the House and signed by the President to end the most recent shut down also included an authorized spending increase of $1.2 billion for an already proposed $1.718 billion construction project on the lower Ohio River in Illinois and Kentucky--- the state represented by Senator McConnell?

As implementation of the ACA chokes and sputters to ‘get out of the gate,’ and failing to meet its projected goals on most levels, the administration has issued exemptions and delays on almost a routine basis.  The ACA’s future appears to rest in the hands of the administration and of the results of the upcoming election in November.

These compromises, delays issued by CMS and Presidential mandates that appear to fly in face of the law and almost indiscriminate exemptions give us a peek into how things really work in our nation’s capitol.

And we just thought it was about the issues!




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