Insurers Pursuing Billions in Medicare Profits Make Big Contributions to Candidates Backing Ryan Budget

Public Campaign Action Fund and Health Care for America Now

October 10, 2012

During the height of debate over the Affordable Care Act, America’s Health Insurance Plans (AHIP) publicly appeared to be negotiating with Democrats and the Obama administration while its members were secretly funneling more than $100 million to the U.S. Chamber of Commerce to oppose the legislation.

When Republicans won back the House Majority in 2010, insurance interests again took center stage when the House twice passed Rep. Paul Ryan’s (R-Wis.) budget plan that would turn Medicare into a voucher program that would deliver billions in new profits to health insurers while devastating a critically important program for America’s seniors.

A new analysis by Public Campaign Action Fund (PCAF) and Health Care for America Now (HCAN) shows that the same insurance interests that would benefit from a voucher program are filling the campaign coffers of Medicare privatization supporters, raising questions about whether these members of Congress are really working for their constituents or big insurance donors.

How Insurance Companies Benefit from the Ryan Plan

A voucher program designed by Ryan and embraced by Republican presidential candidate Mitt Romney would be a boon to insurance interests by moving millions of seniors who join Medicare after 2022 into private plans partially funded by government vouchers.

Vouchercare would give insurers vast flows of new revenue and increase health insurance company profits by $16 billion to $26 billion in 2030. Here’s how Harvard economist David Cutler described it:

According to the CBO, people aged 65 in 2023 (the first year of the voucher) are expected to account for 4 percent of the $1.23 trillion in Medicare spending anticipated in that year … An estimated $31 billion in Medicare funds would be newly available to private plans in 2023. The GAO has estimated that insurers earn profits of between 4.1 percent and 6.6 percent on revenue. Thus, the newly available private insurer revenues would generate private profits of $1.3 [billion]–$2.1 billion in 2023. These profits would quickly mount. By 2030, new profits for private insurers would be as high as $16 [billion] to $26 billion.

The year 2030 may sound far off, but health insurance companies and Wall Street investors would see an immediate payoff if backers of Medicare privatization were to win big in November. A Romney-Ryan victory coupled with a Republican takeover of the Senate would boost health insurance company stock prices by 10 to 20 percent, according to Citigroup analyst Carl McDonald. Based on share prices on Aug. 18, the day McDonald published his report, a GOP sweep in Washington would quickly jack up the total market value of the 10 largest health insurers by $12 billion to $25 billion. Here’s how McDonald sees it:

We’ve argued that in the scenario where Mitt Romney wins the presidential election and Republicans take the Senate, the managed care group rises 10-20%, as the market factors in the likelihood that health reform implementation is delayed, scaled back, or that pieces are removed entirely, pushing up earnings forecasts in 2014 and beyond. We think the argument for how much the stocks could move is strengthened by the selection of Paul Ryan as the Republican vice president candidate, given Ryan’s widely publicized proposal to essentially privatize the federal Medicare program. Ryan has talked about changing the reimbursement methodology for Medicare Advantage plans, which creates some uncertainty, but that negative would be more than offset by a major increase in Medicare revenue if the bulk of the seniors in the country were ultimately moved into a private plan.

Industry Influence

Rep. Paul Ryan’s insurance industry ties are well known. Right after his selection as Romney’s running mate, Bloomberg News reported, “Insurance employees and their families have given $815,328 to Ryan’s election efforts over his career, more than any other industry.” These donations include those made to his leadership committee as well as his campaign account.

At the top of the ticket, Governor Mitt Romney has raised nearly $2.7 million from the industry compared to $1.5 million for President Barack Obama.

But Ryan isn’t the only House member raking in industry campaign cash. The supporters of his budget plan are the top recipients of the insurers’ largesse, according to Public Campaign Action Fund analysis of data from the Center for Responsive Politics.

The analysis below includes donations from the political action committees (PACs) and employees of insurance companies and health maintenance organizations (HMOs) to the members’ campaign committees. Leadership PACs are not included but would drive these numbers higher.

  • Current U.S. House Members who voted for Ryan’s budget plan to turn Medicare into a voucher program have received nearly twice as much insurance industry campaign cash this cycle as those who voted against the bill. Supporters of the bill have received at least $14 million this cycle from the industry while opponents received $7.4 million.
  • On average, individual supporters of the plan received 53 percent more money in the 2012 cycle than opponents – $60,472 to $39,435.
  • More broadly, supporters of Ryan’s plan have received $49.7 million in contributions from insurance interests during their time in Congress, nearly $12 million more than opponents, who have received $38 million.
  • Eight of the top 10 recipients of insurance industry money this cycle are Ryan plan supporters – including every member of House Republican leadership.
  • House Majority Leader Eric Cantor (R-Va.) is the top recipient of industry cash this cycle in the House, bringing in $463,000 from the industry for the 2012 election and nearly $1.7 million over his career.
  • Members of the leadership team – Speaker John Boehner (R-Ohio), Majority Leader Cantor, Majority Whip Kevin McCarthy (R-Calif.) and Conference Chair Jeb Hensarling (R-Texas) – have received a combined $1.4 million in contributions in 2012 and $5 million over their careers.

A full table of insurance and HMO contributions received by members supporting the Ryan plan is available below.

An army of industry lobbyists backs up all of these donations. Since 2011, insurance interests and HMOs have spent a combined $344 million lobbying Congress and federal agencies.

***

The Federal Election Commission estimates that $6 billion will be spent on the 2012 election, making it the most expensive in history. Much of that money is being spent by wealthy special interests that want to see their preferred candidates elected in order to pass legislation beneficial to them or block bills they don’t like. Insurance executives and their companies are a prime example, and they are also likely spending millions more on secret donations to groups like the US Chamber of Commerce.

When the insurance industry buys its preferred policies at the expense of everyday people, it highlights the problem with our current campaign finance system, in which elected officials have to make voting decisions based not on just what’s best for their constituents, but what’s best for their campaign bank accounts. And everyday Americans pay the price.

Last, First Vote Party/State 2012 Total Career Total
Adams, Sandy Yea R-FL $54,200 $96,600
Aderholt, Robert Yea R-AL $19,250 $166,583
Akin, Todd Yea R-MO $45,000 $160,100
Alexander, Rodney Yea R-LA $24,000 $183,275
Amash, Justin Yea R-MI $4,750 $24,950
Austria, Steve Yea R-OH $10,750 $78,350
Bachmann, Michele Yea R-MN $46,151 $346,431
Bachus, Spencer Yea R-AL $241,460 $1,146,060
Barletta, Lou Yea R-PA $33,200 $80,750
Bartlett, Roscoe Yea R-MD $5,250 $41,250
Barton, Joe Yea R-TX $22,400 $488,544
Bass, Charlie Yea R-NH $70,250 $358,725
Benishek, Dan Yea R-MI $26,275 $47,412
Berg, Rick Yea R-ND $139,311 $191,711
Biggert, Judy Yea R-IL $233,250 $689,651
Bilbray, Brian Yea R-CA $47,350 $368,354
Bilirakis, Gus Yea R-FL $27,200 $185,797
Bishop, Rob Yea R-UT $13,500 $52,300
Black, Diane Yea R-TN $191,578 $251,128
Blackburn, Marsha Yea R-TN $88,500 $305,961
Boehner, John Yea R-OH $408,100 $1,906,560
Bonner, Jo Yea R-AL $27,000 $147,525
Bono Mack, Mary Yea R-CA $40,800 $189,969
Boustany, Charles Yea R-LA $261,500 $594,765
Brady, Kevin Yea R-TX $112,050 $406,500
Brooks, Mo Yea R-AL $9,000 $19,700
Broun, Paul Yea R-GA $26,234 $82,216
Buchanan, Vern Yea R-FL $129,200 $359,330
Bucshon, Larry Yea R-IN $48,000 $85,098
Buerkle, Ann Yea R-NY $55,300 $61,850
Burgess, Michael Yea R-TX $85,500 $288,450
Burton, Dan Yea R-IN $9,000 $379,941
Calvert, Ken Yea R-CA $13,550 $161,930
Camp, Dave Yea R-MI $371,849 $1,380,492
Campbell, John Yea R-CA $89,250 $373,150
Canseco, Quico Yea R-TX $153,685 $210,335
Cantor, Eric Yea R-VA $463,550 $1,687,049
Capito, Shelley Yea R-WV $81,800 $497,840
Carter, John Yea R-TX $10,509 $91,959
Cassidy, Bill Yea R-LA $114,572 $200,247
Chabot, Steve Yea R-OH $27,250 $575,341
Chaffetz, Jason Yea R-UT $7,500 $22,750
Coble, Howard Yea R-NC $12,000 $163,368
Coffman, Mike Yea R-CO $30,350 $54,300
Cole, Tom Yea R-OK $25,500 $183,600
Conaway, Michael Yea R-TX $19,000 $91,000
Cravaack, Chip Yea R-MN $16,000 $22,000
Crawford, Rick Yea R-AR $9,750 $28,010
Crenshaw, Ander Yea R-FL $13,200 $125,100
Culberson, John Yea R-TX $15,750 $123,050
Denham, Jeff Yea R-CA $54,200 $89,400
Dent, Charles Yea R-PA $24,463 $179,037
DesJarlais, Scott Yea R-TN $22,200 $48,450
Diaz-Balart, Mario Yea R-FL $4,500 $188,555
Dold, Bob Yea R-IL $147,806 $211,906
Dreier, David Yea R-CA $4,750 $417,292
Duffy, Sean Yea R-WI $99,812 $153,562
Duncan, Jimmy Yea R-TN $7,250 $137,776
Duncan, Jeff Yea R-SC $29,500 $47,750
Ellmers, Renee Yea R-NC $25,950 $34,500
Emerson, Jo Yea R-MO $38,800 $80,830
Farenthold, Blake Yea R-TX $15,000 $24,700
Fincher, Stephen Yea R-TN $114,250 $182,095
Fitzpatrick, Michael Yea R-PA $96,000 $328,090
Flake, Jeff Yea R-AZ $117,050 $191,617
Fleischmann, Chuck Yea R-TN $49,750 $75,879
Fleming, John Yea R-LA $41,782 $120,464
Flores, Bill Yea R-TX $27,300 $70,400
Forbes, Randy Yea R-VA $28,250 $92,400
Fortenberry, Jeffrey Yea R-NE $24,650 $168,737
Foxx, Virginia Yea R-NC $23,250 $94,650
Franks, Trent Yea R-AZ $8,000 $64,870
Frelinghuysen, Rodney Yea R-NJ $5,250 $116,900
Gallegly, Elton Yea R-CA $2,700 $136,846
Gardner, Cory Yea R-CO $69,500 $120,780
Garrett, Scott Yea R-NJ $149,972 $639,161
Gerlach, Jim Yea R-PA $164,928 $710,324
Gibbs, Bob Yea R-OH $32,500 $65,375
Gibson, Chris Yea R-NY $48,200 $84,000
Gingrey, Phil Yea R-GA $75,250 $330,820
Gohmert, Louis Yea R-TX $9,750 $91,150
Goodlatte, Bob Yea R-VA $29,000 $184,236
Gosar, Paul Yea R-AZ $17,500 $42,800
Gowdy, Trey Yea R-SC $41,244 $53,194
Granger, Kay Yea R-TX $26,200 $245,080
Graves, Sam Yea R-MO $41,000 $282,398
Graves, Tom Yea R-GA $20,500 $48,700
Griffin, Tim Yea R-AR $34,800 $66,200
Griffith, Morgan Yea R-VA $35,500 $47,250
Grimm, Michael Yea R-NY $99,506 $119,606
Guinta, Frank Yea R-NH $88,825 $152,025
Guthrie, Brett Yea R-KY $98,500 $254,350
Hall, Ralph Yea R-TX $8,500 $229,900
Hanna, Richard Yea R-NY $27,500 $52,250
Harper, Gregg Yea R-MS $6,700 $42,350
Harris, Andy Yea R-MD $24,650 $102,400
Hartzler, Vicky Yea R-MO $24,200 $46,200
Hastings, Doc Yea R-WA $20,000 $208,194
Hayworth, Nan Yea R-NY $190,856 $324,706
Heck, Joe Yea R-NV $107,700 $175,430
Hensarling, Jeb Yea R-TX $275,647 $757,470
Herger, Wally Yea R-CA $51,500 $671,610
Herrera Beutler, Jaime Yea R-WA $23,450 $65,950
Huelskamp, Tim Yea R-KS $15,538 $29,702
Huizenga, Bill Yea R-MI $84,665 $109,415
Hultgren, Randy Yea R-IL $29,000 $72,050
Hunter, Duncan Yea R-CA $14,250 $35,200
Hurt, Robert Yea R-VA $99,156 $201,163
Issa, Darrell Yea R-CA $40,300 $148,756
Jenkins, Lynn Yea R-KS $105,028 $237,252
Johnson, Sam Yea R-TX $87,500 $46,100
Johnson, Bill Yea R-OH $43,750 $54,900
Johnson, Timothy Yea R-IL $9,150 $59,800
Jordan, Jim Yea R-OH $33,232 $123,663
Kelly, Mike Yea R-PA $31,500 $61,350
King, Pete Yea R-NY $18,500 $296,911
King, Steve Yea R-IA $49,350 $111,185
Kingston, Jack Yea R-GA $14,500 $355,017
Kinzinger, Adam Yea R-IL $77,100 $130,500
Kline, John Yea R-MN $120,050 $434,300
Labrador, Raul Yea R-ID $12,500 $32,868
Lamborn, Doug Yea R-CO $7,000 $28,100
Lance, Leonard Yea R-NJ $65,440 $229,813
Landry, Jeff Yea R-LA $15,000 $40,100
Lankford, James Yea R-OK $19,200 $47,600
Latham, Tom Yea R-IA $114,400 $367,457
LaTourette, Steven Yea R-OH $17,000 $285,700
Latta, Robert Yea R-OH $23,000 $84,750
Lewis, Jerry Yea R-CA $2,000 $327,879
LoBiondo, Frank Yea R-NJ $25,500 $277,852
Long, Billy Yea R-MO $26,750 $64,250
Lucas, Frank Yea R-OK $23,000 $197,975
Luetkemeyer, Blaine Yea R-MO $83,485 $187,660
Lummis, Cynthia Yea R-WY $2,000 $10,300
Lungren, Daniel Yea R-CA $42,750 $170,350
Mack, Connie Yea R-FL $83,550 $232,166
Manzullo, Donald Yea R-IL $33,350 $330,826
Marchant, Kenny Yea R-TX $59,712 $179,382
Marino, Thomas Yea R-PA $29,750 $61,062
McCarthy, Kevin Yea R-CA $287,227 $605,734
McCaul, Michael Yea R-TX $7,800 $97,951
McClintock, Tom Yea R-CA $11,650 $127,722
McHenry, Patrick Yea R-NC $68,250 $317,514
McKeon, Buck Yea R-CA $46,750 $185,050
McMorris Rodgers, Cathy Yea R-WA $54,250 $212,219
Meehan, Patrick Yea R-PA $114,625 $235,465
Mica, John Yea R-FL $27,000 $226,060
Miller, Gary Yea R-CA $27,000 $174,068
Miller, Candice Yea R-MI $7,400 $107,051
Miller, Jeff Yea R-FL $6,750 $19,500
Mulvaney, Mick Yea R-SC $30,400 $64,010
Murphy, Tim Yea R-PA $63,000 $3,600
Myrick, Sue Yea R-NC $17,700 $290,471
Neugebauer, Randy Yea R-TX $118,200 $392,071
Noem, Kristi Yea R-SD $96,800 $128,505
Nugent, Richard Yea R-FL $25,250 $48,500
Nunes, Devin Yea R-CA $68,000 $354,850
Nunnelee, Alan Yea R-MS $29,750 $86,900
Olson, Pete Yea R-TX $28,750 $90,150
Palazzo, Steven Yea R-MS $24,500 $55,550
Paulsen, Erik Yea R-MN $195,680 $476,903
Pearce, Steve Yea R-NM $25,060 $250,350
Pence, Mike Yea R-IN $7,650 $270,153
Petri, Tom Yea R-WI $11,500 $137,970
Pitts, Joseph Yea R-PA $120,189 $232,714
Platts, Todd Yea R-PA $0 $11,700
Poe, Ted Yea R-TX $11,819 $92,329
Pompeo, Mike Yea R-KS $53,000 $104,068
Posey, Bill Yea R-FL $43,250 $118,323
Price, Tom Yea R-GA $214,750 $591,321
Quayle, Ben Yea R-AZ $52,950 $90,962
Reed, Tom Yea R-NY $87,005 $112,455
Renacci, Jim Yea R-OH $105,685 $163,385
Ribble, Reid Yea R-WI $68,324 $86,074
Rigell, Scott Yea R-VA $53,750 $101,050
Rivera, David Yea R-FL $4,000 $49,900
Roby, Martha Yea R-AL $31,550 $45,700
Roe, Phil Yea R-TN $1,625 $19,575
Rogers, Mike Yea R-MI $154,790 $657,587
Rogers, Hal Yea R-KY $15,400 $66,250
Rogers, Mike Yea R-AL $26,500 $290,475
Rohrabacher, Dana Yea R-CA $11,000 $75,850
Rokita, Todd Yea R-IN $72,815 $123,340
Rooney, Thomas Yea R-FL $13,750 $74,932
Ros-Lehtinen, Ileana Yea R-FL $14,950 $223,384
Roskam, Peter Yea R-IL $261,400 $656,638
Ross, Dennis Yea R-FL $52,250 $145,900
Royce, Ed Yea R-CA $197,340 $981,545
Runyan, Jon Yea R-NJ $78,850 $120,250
Ryan, Paul Yea R-WI $209,643 $1,056,946
Scalise, Steve Yea R-LA $47,400 $206,275
Schilling, Bobby Yea R-IL $38,750 $63,700
Schmidt, Jean Yea R-OH $26,000 $203,550
Schock, Aaron Yea R-IL $145,946 $345,905
Schweikert, David Yea R-AZ $139,450 $211,827
Scott, Austin Yea R-GA $53,750 $71,000
Scott, Tim Yea R-SC $131,950 $203,725
Sensenbrenner, James Yea R-WI $10,000 $297,648
Sessions, Pete Yea R-TX $114,500 $688,063
Shimkus, John Yea R-IL $88,010 $444,977
Shuster, Bill Yea R-PA $13,500 $125,767
Simpson, Mike Yea R-ID $12,500 $68,350
Smith, Lamar Yea R-TX $80,513 $341,736
Smith, Chris Yea R-NJ $12,150 $81,100
Smith, Adrian Yea R-NE $91,845 $225,246
Southerland, Steve Yea R-FL $21,750 $37,553
Stearns, Cliff Yea R-FL $13,900 $276,021
Stivers, Steve Yea R-OH $223,285 $631,547
Stutzman, Marlin Yea R-IN $27,100 $52,800
Sullivan, John Yea R-OK $31,750 $142,600
Terry, Lee Yea R-NE $81,076 $575,534
Thompson, Glenn Yea R-PA $38,500 $82,060
Thornberry, Mac Yea R-TX $8,450 $69,175
Tiberi, Pat Yea R-OH $298,850 $1,258,433
Tipton, Scott Yea R-CO $23,000 $40,050
Turner, Michael Yea R-OH $15,250 $79,550
Upton, Fred Yea R-MI $171,200 $505,005
Walberg, Timothy Yea R-MI $63,950 $204,000
Walden, Greg Yea R-OR $115,995 $358,835
Walsh, Joe Yea R-IL $79,450 $90,694
Webster, Daniel Yea R-FL $65,400 $140,886
West, Allen Yea R-FL $68,090 $142,340
Westmoreland, Lynn Yea R-GA $52,685 $194,035
Whitfield, Ed Yea R-KY $42,250 $330,759
Wilson, Joe Yea R-SC $43,750 $169,700
Wittman, Rob Yea R-VA $4,000 $19,000
Wolf, Frank Yea R-VA $1,550 $74,925
Womack, Steve Yea R-AR $8,500 $16,200
Woodall, Rob Yea R-GA $15,300 $32,550
Yoder, Kevin Yea R-KS $80,000 $160,290
Young, Todd Yea R-IN $25,400 $57,850
Young, Bill Yea R-FL $8,000 $79,700
Young, Don Yea R-AK $1,250 $110,250