Closed-Door Deal Makes $22 Billion Difference In Measure on HMOs (WaPo)

Closed-Door Deal Makes $22 Billion Difference
GOP Negotiators Criticized for Change In Measure on HMOs

By Jonathan Weisman
Washington Post Staff Writer
Tuesday, January 24, 2006; Page A01

House and Senate GOP negotiators, meeting behind closed doors last month to complete a major budget-cutting bill, agreed on a change to Senate-passed Medicare legislation that would save the health insurance industry $22 billion over the next decade, according to the nonpartisan Congressional Budget Office.

The Senate version would have targeted private HMOs participating in Medicare by changing the formula that governs their reimbursement, lowering payments $26 billion over the next decade. But after lobbying by the health insurance industry, the final version made a critical change that had the effect of eliminating all but $4 billion of the projected savings, according to CBO and other health policy experts.


That change was made in mid-December during private negotiations involving House Ways and Means Chairman Bill Thomas (R-Calif.), Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) and the staffs of those committees as well as the House Energy and Commerce Committee. House and Senate Democrats were excluded from the meeting. The Senate gave final approval to the budget-cutting measure on Dec. 21, but the House must give it final consideration early next month.

http://www.washingtonpost.com/wp-dyn/content/article/2006/01/23/AR2006012301700.html

That's how it should be phrased.

from 2003:

Rep. Rangel stated that the largest change the Thomas bill would make does not even involve prescription drug coverage, but is the provision to force Medicare beneficiaries into the private marketplace by 2010.

"This bill is being promoted as adding a prescription drug benefit, but the price of that benefit is the end of Medicare as we know it," Rep. Rangel said. "If this bill becomes law, it will start a time bomb that will go off in 2010 and end the guarantee of affordable coverage under Medicare."

By 2010, the Thomas bill would repeal Medicare’s entitlement to a defined set of benefits and replace it with a so-called "premium support" system in which a government subsidy would be set based on the bids of private plans. HMOs and other private insurers could artificially reduce their costs by restricting coverage, changing premiums and co-pays, and refusing to pay claims. These HMOs and private plans would market themselves to healthier seniors and leave traditional Medicare with the sickest and most expensive, driving up the cost to the beneficiary of staying in traditional Medicare.

http://www.house.gov/apps/list/press/wm31_democrats/rangel_medicare030616.html


from 2000:

Author of GOP Health Bill Linked to Lobbyist

An unsettling story about a key Republican congressman's "intensely personal" relationship with a lobbyist involved in the health-care debate is being reported by the Bakersfield Californian. The paper claims that Bill Thomas, chair of the House Ways and Means subcommittee on health, has a relationship with a Washington lobbyist for health-care firms that raises conflict-of-interest questions. Thomas, who has represented Bakersfield since 1978, was the chief architect of the Republicans' watered-down bill on prescription-drug benefits for Medicare recipients.

The lobbyist is Deborah Steelman, who represents a range of health-care firms, from drug companies to HMOs to nursing homes. According to the Center for Responsive Politics, Steelman's lobbying income in 1997, representing firms such as Aetna, Cigna, Prudential, and Goldman Sachs, totaled $2 million. A former Reagan administration official, she serves as a health-policy adviser to George W. Bush and is a key fundraiser for Bush and for congressional Republicans. She has been mentioned as a possible appointee for secretary of Health and Human Services in a Bush administration.

http://www.bushreport.com/health2.htm



Rep. Bill Thomas (R-CA), the lead sponsor of legislation
establishing Health Savings Accounts (H.R. 2596,
the Health Savings and Affordability Act of 2003) that
was folded into the Medicare legislation, has long been
an advocate of the tax-free medical accounts. In fact,
in 1998, Public Campaign awarded Thomas a "Golden
Leash" award, a symbol of the ties between special
interest money and elected officials, for taking a half a
million dollars from health care interests between 1991
and 1998 and pushing to increase federal incentives
for Medical Savings Accounts (MSAs) (the old term for
HSAs). Indeed, Thomas was instrumental in creating a
pilot program for MSAs in the balanced budget bill in
1997, which serves as the model for the new HSA pro-gram.
Back then, Thomas told the Heritage
Foundation, "We had medical savings accounts in the
balanced budget and we are going to have medical
savings in the current proposal to reform Medicare."15
Six years later, his word proved good. Thomas now
ranks third among his House colleagues for campaign
contributions from the health sector, with $1.9 million
dollars and counting.
http://www.publicampaign.org/healthcarepaybacks/healthcare_paybacks_report.pdf


Bill Thomas (R-CA) $291,165 A cosponsor of the industry-backed Medicare reform legislation,
Thomas is a former chairman of the House Ways & Means Health
Subcommittee, where he helped fashion the legislation in its early
forms. At the time he was involved in a private personal relation-ship
with big-time pharmaceutical lobbyist Deborah Steelman
whose Washington firm, Steelman Health Strategies, received
$2.4 million in lobbying fees from health interests in 1999, includ-ing
$900,000 from pharmaceutical manufacturers. (thomas.loc.gov,
"News Makers," Modern Health Care, October 14, 2002; Saul Friedman, "RX for Conflict of
Interest?", Newsday (New York), July 22, 2000.)
http://www.publicampaign.org/healthcarepaybacks/healthcare_paybacks_report.pdf



In the 2004 election cycle, a total of $9,523,775 was given in campaign contributions by the pharmaceutical industry, 71% of which went to Republicans. How much did these industry lobbyists earn? Plenty! Bush $891,208; Senate Majority Leader Bill Frist (R-TN) $123,957; Sen Orrin Hatch (R-UT) $433,324; Sen John Breaux (D-LA) $59,150; Sen Max Baucus (D-MT) $145,372; Sen Charles Grassley (R-IA) $217,921; House Speaker Dennis Hastert (R-IL) $194,700; House Majority Leader Tom DeLay (R-TX) $78,250; Rep Billy Tauzin (R-LA) $211,249; Rep Nancy Johnson (R-CT) $336,908; and Rep Bill Thomas (R-CA) $322,514.
http://www.sierratimes.com/cgi-bin/ikonboard/topic.cgi?forum=2&topic=726



Republicans Trampled Congressional Rules to Pass Bush Prescription Drug Plan. The Medicare Conference Committee Chair Rep. Bill Thomas (R-CA) refused entrance to all House Democrats appointed to the committee finalizing the bill and only allowed two of the four Democratic senators to attend, describing the group as a "coalition of the willing."

Then, when it appeared the Bush plan would lose in the final House vote, GOP leaders extended the roll call vote from 15 minutes to nearly 3 hours to strong-arm wavering members. Norman Ornstein described it as "the ugliest and most outrageous breach of standards in the modern history.
http://www.nydems.org/html/features/200403bush_medicare.html



The principal negotiators of the Medicare bill – a bill which provides a windfall to the HMOs and drug industry – are Sens. Charles Grassley (R-IA), Max Baucus (D-MT) and John Breaux (D-LA) and Rep. Bill Thomas (R-CA). Not surprisingly, these members of Congress are among the largest recipients of HMO and drug industry cash. All told, the health industry, including HMOs and the big drug lobby, has given those four principal negotiators $2.36 million starting with the 2000 election cycle. According to the Center for Responsive Politics, Rep. Thomas leads the way, having accepted almost half of those funds - a whopping $1,021,920. Sen. Grassley took in $573,678. Sens. Baucus and Breaux reaped $646,450 and $118,612 respectively, with a giant fifth of Baucus's health care money coming from the drug industry.
http://www.americanprogress.org/site/pp.asp?c=biJRJ8OVF&b=38351


Contributions to Thomas:
$133,500 from Health Industry. $95,500 from PACs - $38,000 from Individuals
http://www.opensecrets.org/politicians/sector.asp?CID=N00007256&cycle=2006

http://www.opensecrets.org/politicians/sector.asp?CID=N00007256&cycle=2006

USANext(United Seniors Association) President and CEO Charles Jarvis served as deputy under secretary at the Department of Interior during the Reagan and Bush administrations. His resume also includes experience as legislative director for Sen. Charles Grassley (R-Iowa) and campaign chairman for presidential candidate Gary Bauer. Jarvis was also the executive vice president of Focus on the Family.
http://www.citizen.org/congress/campaign/special_interest/articles.cfm?ID=7999


United Seniors Association (USA) burst onto the soft money scene in 2002, when it spent $18.6 million on advertising, according to its filing with the IRS.2 Some of its expenditures paid for issue advocacy communications in the summer of that year while Congress was debating a Medicare prescription drug bill, as chronicled in this Public Citizen report: United Seniors Association: Hired Guns for PhRMA and Other Corporate Interests. (http://www.citizen.org/congress/campaign/special_interest/articles.cfm?ID=7999)

USA was founded by Richard Viguerie, a conservative who pioneered the art of using direct mail pitches to solicit small political contributions.

USA's officers and consultants are steeped in Republican politics. Its president is Charles Jarvis, who served in the Reagan and George H.W. Bush administrations. Members of its board of directors have included Jack Abramoff, who is among the foremost fundraisers for the Republican Party and a top fundraiser for President Bush, and Craig Shirley, a Republican operative whose involvement with soft money political spending dates back to at least 1988, when he played a leading role in creating the "Willie Horton" political ad. USA's lobbyist, David Keene, is chairman of the American Conservative Union, and previously worked for Vice President Spiro Agnew, Ronald Reagan, George H.W. Bush and Bob Dole. (http://www.stealthpacs.org/profile.cfm?org_id=46)