Thursday, April 24, 2014
Over the past several years, the Anthem insurance company has given tens of thousands of dollars to candidates for the Maine Legislature and their political action committees.
For most of that time, their contributions have been relatively equal between Democrats and Republicans.
According to a new report set to be released later today by Maine Citizens for Clean Elections, however, that bipartisanship changed in 2010.
Starting before the elections that year and continuing through today, Anthem's contributions are now heavily tilted toward one party. Where before Republicans received around 50 percent, they now receive 84 percent of all contributions from the insurance giant.
Maine Citizens for Clean Elections ties this change directly to Republican support for LD 1333, now Public Law 90, the health insurance legislation that repealed key regulatory safeguards in the insurance market. It also allows Anthem and other insurance companies to charge greatly increased premiums to businesses and individuals across the state based on factors such as geography and age.
The report tracks almost $500,000 spent by the insurance industry to influence elections in Maine, but this total actually barely scrapes the surface of its influence. As Maine Citizens for Clean Elections notes, individuals and organizations that registered to lobby on this bill also gave an additional $936,328 in 2011 alone to candidates and PACs.
Then there are the national groups and Super PACs. Anthem's corporate owner, Wellpoint, gave more than $800,000 to the Republican State Leadership Council, a group founded by Karl Rove. The Leadership Council spent $400,000 on five key Senate races in Maine in 2010 that shifted the balance of power in the Legislature.
People often are shocked when they hear about how bad the health care situation has become for some small businesses since the passage of the insurance industry-backed legislation.
With rates increasing by 40 to 80 percent for some businesses, they wonder how this could have seemed like a good idea.
This report and this spending makes the reasons for the bill's passage more clear: Individuals and small businesses can't possibly hope to match the financial firepower and political influence of big insurance.
Last week, Rep. Deborah Sanderson, R-Chelsea, wrote a Maine Compass in this newspaper challenging several aspects of my last column about the insurance bill. I think I owe her a response.
First, she claimed that the insurance companies won't get to "pocket" the money from the new $4-per-month tax on people with insurance, because it "goes into a reinsurance trust fund."
The reinsurance fund is actually less a check on insurers and more of a wholly owned subsidiary. Five of the 11 members of the board overseeing it are directly appointed by the insurance companies and the other six are appointed by the LePage administration's insurance commissioner.
Figures from the bureau of insurance and insurance companies themselves easily confirm this, and they've already booked the revenue from this tax.
Anthem alone will receive $11 million in taxpayer dollars. Without the new tax, the insurer reports it would have had to raise rates almost 20 percent on individuals.
So much for the savings the deregulations were supposed to create.
Second, Sanderson claims that "all insurers selling individual policies in Maine lost money in 2011." That is absolutely untrue.
The rate increase approved by the state last year included a guaranteed profit margin last year, as have most rate increases for the past decade, and insurers have made much more on their group and other insurance products.
In 2009, during the height of the recession, Anthem-Wellpoint enjoyed record profits of $4.75 billion nationally and increased the pay of their CEO from $8.1 million to $13.1 million.
Finally, Sanderson claims that the "reforms were never expected to eliminate all increases."
One only has to go back to the words of her Republican colleagues as the bill was being debated to prove this is false. Rep. John McKane, R-Newcastle, claimed that the changes would "lower prices for younger people" and "not raise them for older people."
Senate Republicans even circulated a Q & A sheet answering "No" to the questions, "Will this law increase premiums for people living in rural areas?" and "Will this bill increase premiums for older people?"
The questionnaire stated that the changes would "spread risk to a larger group of people, resulting in lower premiums for everyone." [emphasis in original]
I do agree, however, with one thing that Sanderson wrote about PL90. She said the law was not "a gift to insurance companies."
As the Maine Citizens for Clean Elections report makes clear, it's not a gift; they paid for it.
Mike Tipping is a political junkie. He writes a blog at MainePolitics.net and works for the Maine People's Alliance and the Maine People's Resource Center. He's @miketipping on Twitter. Email to firstname.lastname@example.org