FreedomWorks

Recent events have shown lobbyists across the health care sector the truth of Dick Armey’s axiom that “if you make a deal with the devil, you are the junior partner.”

In July, the pharmaceutical industry cut a “deal” with the White House in which the Administration promised the industry that health care “reform” won’t cost them too much (less than $80 billion), in return for the industry’s agreement to spend $150 million on ads promoting Obamacare.

“Big Pharma’s” behavior was an understandable reaction to the Washington reality, especially in this Administration, that if you’re not at the table, you’re on the menu. But the effect was to put on the menu every American who takes medicine.

Within a month, however, the drug industry had already received their first stab in the back, from a House bill that would allow the government to negotiate drug prices – something the “agreement” had seemed to specifically preclude. The NY Times reported in August:

“We were assured: ‘We need somebody to come in first. If you come in first, you will have a rock-solid deal,’ ” Billy Tauzin, the former Republican House member from Louisiana who now leads the pharmaceutical trade group, said Wednesday. “Who is ever going to go into a deal with the White House again if they don’t keep their word? You are just going to duke it out instead.”

Indeed. Who is ever going to go into a deal with the White House again?

How about the American Medical Association? The health insurance industry, the American Medical Association (which represents fewer than 30% of American physicians but misleadingly acts as if it truly represents “the nation’s doctors”), and various hospital groups have, until the Baucus almost-bill, tried to “work with” the Administration to tailor “reform” so that it would benefit them, regardless of how much it would cost everyone else.

The AMA thought they had a deal that any reform would be gentle on Medicare reimbursement rates for doctors. Indeed, the House bill seemed to promise a slight increase in those rates, at least for primary care physicians. No such luck once they saw what Baucus got passed. The Baucus measure includes massive cuts to Medicare payments and subsidies (which will never actually happen, just as required cuts have not happened each year since 2003). The story is the same for hospital groups which decided to support Obamacare early on, with the starry-eyed naivety of someone who has never dealt with a Chicago politician.

So another “agreement” bites the dust. Can you picture Rahm Emanuel sitting down with the industry lobbyists, crossing his fingers behind his back as he shakes hands over his “understanding” with drug makers, doctors, or hospital administrators?

And just in the past few days, we have the results of the latest Democrat betrayal. The PriceWaterhouseCoopers report which shows that the Baucus almost-bill will substantially raise health insurance premiums was commissioned by America’s Health Insurance Plans (“AHIP”), an industry lobbying organization. While the report is good ammunition against what will be a disastrously expensive government destruction of our health care system, those of us who oppose Obamacare in all its forms must not simply assume that AHIP is an ally.

Like the other medical industry groups who couldn’t resist the temptation to try to influence a government hell-bent on controlling everything, the health insurance industry sided with Obamacare, if somewhat more cautiously than the drug makers did. They even revived “Harry and Louise” who have suddenly switched sides from when the very same insurers used those very same characters to great effect to defeat Hillarycare.

The health insurers thought that government would force millions of young, healthy people (i.e. extremely profitable people to sell health insurance to) into their arms like so many herring being caught up in a giant net. That didn’t happen either in the Baucus bill, and the penalties being proposed for not having insurance are too low for the industry to believe they will effectively force people into insurance they don’t want or can’t afford. Apparently the insurers missed the fact that government is made up of politicians who can ill afford to alienate every young healthy voter in America.

In other words, AHIP released the PWC report not because they thought the Baucus bill was bad for medicine or for Americans, but because it wasn’t sufficiently coercive and because they thought they had a deal. And they did…Chicago style. Yes, the PWC information is useful for those who oppose Obamacare, that does not mean we should confuse AHIP with a friend of economic liberty or even a friend of the best possible health care system. If it were up to them, everyone would be forced to buy their product whether it was wanted or not, and at almost any price.

Really, who can blame them? If Obamalosireidcus is going to force insurance companies to take people with pre-existing conditions without charging them more and limit how much more the companies can charge old people versus young people (even though old people have much greater risk of expensive health problems), the insurance companies see two possible outcomes: Premiums rising well beyond what makes sense for the average healthy young or almost-young person to spend, leading to further “adverse selection”, i.e. healthy people dropping coverage, and continuing in a rising premium death spiral for health insurance. Or the government forcing young healthy people into the “pool” to “spread the risk”, forcing them to subsidize health care for old or sick people…with premiums still rising, just not quite as fast. Of course the health insurance industry wants an “individual mandate!”

Imagine how much auto insurance would cost if people were allowed to buy it just after getting into an accident. That’s what Obama wants to do with health care. Effectively, he wants to force people who don’t drive to buy expensive car insurance and subsidize the losses that the insurers will take by paying claims for accidents which happened before the accident-causing driver was even insured. It is economically and politically unsustainable, not least because it’s bad for both young adults and old adults, all of whom happen to have the right to vote.

Indeed, Obamacare is only good for two groups: the very small minority of chronically sick people who can’t currently get health insurance (but do we need to destroy the whole system to help them find an answer?), and (particularly if there is a public option) unions who hope to dump their health care costs on government, leaving them free to take the money they had saved for their members’ and retirees’ medical bills and spend it on getting Democrats elected. Any wonder why Democrats are so desperate to get this passed, given the rapid shift in the political tide against them in the past few months?

With this Administration, even the unions can’t be sure they have a deal – luckily for the rest of us. That said, when it comes to Armey’s axiom, in a deal between the Obama Administration and Big Labor, it’s hard to know who is the junior partner.