Some People Are Making Big Bucks Sabotaging Obamacare

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This story originally appeared at The Nation.

Senator Ted Cruz, R-Texas, greets supporters after addressing thousands of tea party activists at the US Capitol. (AP Photo/J. Scott Applewhite)

To gain steam for his initiative to tie funding of the government to defunding Obamacare, Senator Ted Cruz appeared at events over the summer with the Tea Party Express, a political action committee. “Either continue funding the government without giving one more dime to Obamacare, or shut down the government,” demands Tea Party Express chair Amy Kremer.

The Tea Party Express, in turn, has sponsored fundraising drives to help “elect more leaders like Ted Cruz.”

One problem for Cruz-acolytes hoping to make their way into office? The Tea Party Express PAC has spent nearly every dollar of the $2.1 million it has raised this year on campaign consultants and fundraising fees, but not a dime in transfers to candidates or on independent expenditures. In previous years, the PAC has funneled much of its proceeds to Russo Marsh and Rogers, a Republican consulting firm in Sacramento, California.

The frantic crusade to screw up the launch of the Affordable Care Act is a sad tale in American politics. If conservatives are successful, even with a short-term government shutdown Cruz and his House GOP allies might achieve, patients will suffer. If young people fail to sign up for health insurance — the stated goal of one Koch-backed front group now airing television advertisements — more will drown under crushing debt if they find themselves in need of serious medical care. But Washington, DC, has a bizarre way of incentivizing harmful behavior, and the sabotage Obamacare campaign is not without its winners.

A set of campaign consultants and insurance agents stand to profit from confusing Americans on the eve of the healthcare reform enrollment date.

The conservative media frenzy over the defunding debate has invigorated donors to many PACs, not just Tea Party Express. The Senate Conservative Fund PAC recorded its largest-ever fundraising hauls last month, though it spends way more on candidates and on candidate ads than the Tea Party Express. Still, the Jim DeMint-linked PAC expended nearly half its coffers on administrative, research and fundraising payments this year. FreedomWorks, the RNC and the Club for Growth have hopped on the Cruz campaign to raise funds by advocating the repeal of Obamacare. For a non-federal election year, at least these PACs are doing well.

The rigid anti-healthcare reform politics of the Koch brothers is also having a stimulative effect upon a small circle of Republican consultants. Americans for Prosperity, the largest Koch-owned front, pays the traditional 15 percent commission rate on all their television buys—the latest round going to Target Enterprises, a Sherman Oaks, California-based GOP media company. And with a seemingly endless appetite for anti-Obamacare paid media and anti-Obamacare grass-roots organizers, Koch makes good on its claim of being a stellar job-creator, at least for jobs in right-wing political advocacy.

The New York Times rightfully notes in an editorial that many other conservative advocacy groups, like the National Liberty Federation, have latched onto the Obamacare fight, viewing the healthcare reform debate as little more than opportunity to raise a few bucks.

The second and less noticed benefactor of some of the more malicious attacks upon healthcare reform are health insurance brokers. Health insurance brokers make a living by selling health insurance and collecting a commission for every person or group they enroll. With healthcare reform set to provide easy access to health insurance options, free of charge, many in the health insurance agent industry view the Obamacare rollout as a death sentence. In recent months, the broker industry has mobilized to erect obstacles for the dozens of community group “navigators,” organizations tapped to spread the word about how to enroll in the exchanges.

In Georgia, under influence from health insurance agent lobbyists, the state passed a law that prohibits navigators from providing advice “concerning the benefits, terms, and features of a particular health benefit plan.” Other states have thrown up licensing laws in an effort to curtail navigators from being able to do, well, anything.

The Center for Public Integrity’s Nicholas Kusnetz has done some of the most interestinginvestigative reporting on this side of the story, revealing that the Independent Insurance Agents and Brokers of America and the National Association of Health Underwriters have orchestrated a multi-pronged attack on Affordable Care Act navigators. The industry, which has secured anti-navigator laws in sixteen states, has poured some $7.5 million into state campaigns since 2010.

While brokers claim they seek only to ensure patients are not scammed by “unlicensed” navigators, in reality, blocking competition seems to be the primary motivation. Last month, the Independent Insurance Agents and Brokers of America released a statement endorsing an effort by Congresswoman Cathy McMorris-Rodgers (R-WA) to repeal all of the funding for the navigators programs. Notes from a lobbying association for insurance agents in Californiawarned brokers before a visit to Sacramento: “If we don’t [lobby lawmakers] they will not think it will matter that much when they allow the unlicensed ‘navigators’ to solicit your book of business!!”

Several community groups that had signed up to participate in the navigators program have now backed out, citing political pressure from Republican politicians. The House Oversight Committee, led by Congressman Darrell Issa (R-CA), and Republican attorneys general have harassed several navigator groups with lengthy questionnaires and other demands.

Some anti-healthcare reform activists are truly motivated by their convictions. But others stand to gain financially from making sure their fellow Americans have problems signing up for health insurance.


Lee Fang is a reporting fellow with The Investigative Fund at The Nation Institute. He covers money in politics, conservative movements and lobbying.
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  • Anonymous

    Maybe Obama can overcome with emergency measures. I do hope that all House republicans are cut off from pay and insurance. Just to let them know how it feels.

  • THIS

    I do not understand why Americans do not want everyone to have access to affordable healthcare.

    I keep waiting to read the article that will explain this.

    Is health bad?

  • Steve Tapia

    It’s about the money and power! If the gatekeepers (brokers) can keep a lid on the information and only release limited amounts, based on how much you (the insurer) are willing to pay for a new patient, then they can both limit your knowledge about what benefits you the most, and charge the most exorbitant amounts to suck out of the new patients! Don’t you get it? :-D

  • rick dalton

    Republican is afraid it will work that why they trying to hard to get rid of it cause if it works they have a better chance rolling a snow ball thou the gates of hell then win 2016 elections

  • photosponge

    We have to get our budget under control and funding OC will only make it worse. It is not the answer!

  • Anonymous

    But funding Ag subsidies, millions of which go to the same farm state members of Congress who support defunding affordable healthcare, and approving earmarked spending to military suppliers for things the military doesn’t even want but are produced by major political contributors is the way to go. Voting your prejudices won’t balance the budget. It only insures that the money is spent on programs that help the already wealthy. If you are in the top 1% or 2% in income and wealth! I can understand your position. If you are not, the programs being pushed by the Congress members you support are ensuring that you will go down with the rest of the middle class. Enjoy the down hill slide.

  • Anonymous

    We want everyone to have affordable healthcare however I have heard several times that even with Obamacare there will be about 30 millions folks without coverage.. That is more than ones who don’t have coverage now. . Health obviously is good … bad healthcare is bad. Many unions members are up in arms about the new health care coverage as well ..Its far far from a perfect bill that is affecting employment & fails to meet the cost estimates.

  • Anonymous

    Thanks for this great article. Yes the GOP is working full stream against Health Care Reform. I fully support the Affordable Care Act and I want it to be a success that will help many people. We need republicans to allow Medicaid in their states so that the poor will have health care.

  • Anonymous

    Those will be covered by Medicaid if republicans will be civilized and allow their states to be fully funded by the government.

  • Anonymous

    If you research who those 30 million are, you’ll find they are those whose governors would not expand Medicaid, those who are eligible but do not sign up for Medicaid (perhaps all the demonizing of those who use social services to blame?), and the undocumented.

  • Anonymous

    I would respectfully suggest that you need to check your sources. Almost all of those 30 million, if not covered by Medicaid ARE able to buy insurance in the exchange, AND get most of it paid by subsidy. They SHOULD be covered by Medicaid, but the greedy gov’nors won’t commit to that, so these poor need to go to the exchanges to get their insurance. But, it is crazy and illogical to claim that more will be uninsured under the ACA than without it. Crazy, and entirely untrue.

  • Anonymous

    So, what IS the answer? I have yet to see a coherent answer from the right about how to solve this major problem in our society. Millions of uninsured, ever-increasing and out of control health-care costs, and discriminating against those who are sick is not acceptable, but the only solution the right has ever come up with is the one in the ACA! The left would prefer a single payor, but since conservatives won’t agree to that, we accepted THEIR plan, and now they hate that, too. I suspect the ugly truth is that the GOP doesn’t care a flip about the uninsured or those paying a fortune for their minimal health care plans.

  • JonThomas

    To all those wondering why the Right is against the ACA…

    First and foremost: It represents a political victory, and explicitly determines (without the aid of gerrymandering, or other political tools which affect congressional representation) which party has the power to accomplish it’s goals.

    So, if the Right gets it’s way, then they can prove they still have a future. If they lose, it not only shows they’ve lost a bit of power, but also, and maybe more importantly, it sends signals to ANY donor, or any group (be it corporate, private, or any other interest) that they are less effectual than promised.

    Religious and moral groups won’t care much, they don’t have anywhere to go…they are basically the filling, pawns counted on for votes… but business, tax policy, foreign policy, and other interest groups… will have to start thinking of alternatives.

    This doesn’t mean you should count the Republicans out, but watch for serious internal changes beyond what has already happened on the Right.

    Secondly, the ACA represents a modern day foothold for Government mandated programs.

    In terms of political thinking: if it is successful, it means the legitimacy for socialized programs, a defeat for privatization, and a step backward for the future ability to strip power from traditionally Governmental spheres of oversight…education, the EPA, etc…

    One last mention-worthy effect is on taxation. Right now, the U.S. has a very low individual tax rate (especially relative to quality of life.) If the ACA proves successful, or even a step in the right direction for improving the health, and health-related financial security of American citizens, then a paradigm shift will occur in what Americans deem as necessary Government expenses.

    Universal healthcare could become attractive, and that will put a crimp in the continued low tax rates of the wealthiest of Americans.

    So, if anyone has even the slightest inkling this is about healthcare, they are sadly, sadly mistaken. Kind of makes a person feel sorry for healthcare professionals who are being used to promote these causes.

    For me, the crime is in the Government-mandated business with insurance companies. ACA advocates will claim I’m being extreme, but any Government legislative action which forces (under threat of penalty) citizens to hand over their efforts to private enterprise, is a form of slavery.

    My efforts are mine. If the community, in the form of Government wants to provide a form of insurance, without profit motive, then that would be both legitimate and acceptable. However, all Americans will now be mandated to be wage and dividend earners for investors and private enterprise…the new plantation…their future is insured.

    Here’s the kicker…the Right has put themselves in an incredibly stupid position. They were sleeping with too many mistresses. Now they are forced to fight against the ACA, but for the wrong reasons.

    If they fight against it on grounds of legitimacy, they alienate their Corporate overlords.

    They can’t admit the culpability they incurred at the drafting of the legislation, because they were sleeping with the Insurance and Pharmaceutical industries – so as to stave off Universal Health Care. Owning up to that affair forces them to face being outed to their Sovereignty sector…libertarians and such.

    If they were to admit all the indiscretions, then the marriage between the moral factions, the financial factions, and the TEA Party and Libertarian factions divorce…

    So, their only grounds that they can use is that which relies simply on defeating the President. It’s this ideological umbrella under which they are hiding; hoping that this small umbrella will keep their pristine appearance unbesmirched…after-all…they came to the party with too many dates…it will be tough to dance with all of them without being caught.

    In the meantime…all you Left-Leaners who flirted with the Right’s dance partner which promised you some favors afterwards…

    One last bit of advise, don’t let her handcuff you to the bed…ooops too late…

    Welcome to Government sponsored Corporatism.

  • Anonymous

    I thought Obamacare was sabotaged at the beginning, during the negotiations.

  • Anonymous

    There is one fact about the ACA. the misinformation dominates the day. Did members of congress & staff get exempted or a fat deal.. I’ve heard both ways. I do not believe the WH on many issues.

  • Anonymous

    Congress, normally covered under the usual federal employee health care plan, voluntarily included themselves in the ACA. They had failed to realize that their employer, like almost all American employers, pays most of the cost of their insurance. So, at their request, Obama signed a provision that gives members of Congress (and their staff) the money that the feds would normally spend on their insurance, so that they can use it to shop in the new ACA marketplace. And, the best way to find out the truth about all the misinformation out there is to google the question, skip all the obviously biased sources and find the first 2-3 neutral sources. I always read at least 2 to make sure I’m getting the real scoop. While I am strongly in favor of the ACA, I care way more about the truth than any preference of mine, and the intentional and lazy/sloppy lies out there are staring to adversely effect my blood pressure. I guess I’ll just add that to my list of pre-existing conditions. ; )

  • Alan Pierce

    so let’s tweak it, make it right. Don’t throw it out all all together.

  • TEDjosa

    this is exactly what rick perry is doing in texas he is making it so difficult for navigators to come to texas and work helping texans acquire acha cover age he is stumping against it saame crap he is is saying

  • TEDjosa

    since when do republicans care what unions care or think you started destroying our manufacturing base under st rionnie ray mind gone

  • Anonymous

    34nelson – NO NO NO CONGRESS is not exempt!! The only issue was would their employer – the federal government – pay a part of the premium as it has in the past
    Especially relevant for staffers – fed pays 75% of the premiums.

    So – YES!!! Congress is on an exchange under the PP& ACA.

  • Karen

    Obamacare is NOT health care! Obamacare is a law FORCING you, under threat of financial penalties imposed by the IRS, to buy health insurance from private companies and in no way guarantees you health care, much less good health care. Health care is provided by health care providers, NOT insurance. Under Obamacare, if all of the 30,000,000 so called uninsured people (and not necessarily American citizens) are added to the system, do you really believe that you will be able to get quality health care in a timely manner?? Do you think that adding the millions of people whose lifestyles make them currently un-insurable to the health care system will help you get affordable or quality health care?? My question is why the sheeples cannot understand the difference between health care and health insurance??? And I fully agree that being forced by the government to hand over your income to a private industry is most certainly a form of slavery. Nor is such an act by our government supported by the United States Constitution. The idea that “we” voted for Obamacare is a joke. Never ever forget the statement made my Nancy Pelosi as the president and his cronies were trying to shove this down our throats, “You have to pass it to find out what’s in it.” Obamacare benefits no one.

  • Darren Stevens

    Some of what you say is true, but I don’t agree with all of it. Follow the money, I say. It’s the insurance industry that stands to lose the most from the ACA–it severely impacts the bottom line on which they used to base their annual profits (refund on premiums not used, preexisting conditions, etc.). Too bad, come up with a different calculus. Check out who in the industry contributes to GOP politicians and you’ll find the bedfellows behind this nonsense.

  • Anonymous

    my health care is going from $875 a month to $225 Thank God for Obama the Great man that saved America

  • Anonymous

    Obama SAVES AMERICA one more time THANK GOD for the Great Obama

  • JonThomas

    I welcome discussion, and I rarely mind disagreements. Although, most times, until they are shown to be false, I will staunchly defend my assertions passionately.

    In this case, I’m not so certain there is much disagreement. When you say… ” Too bad, come up with a different calculus….” Did you mean to say that I should come up with a different calculus, or should the Insurance companies do so to adjust for a new paradigm?

    It will be interesting to see the change in Insurance company business models, and how that translates into real world decisions.

    Investors demand profit share increases. True, up front there will hopefully be enough competition to lower policy costs, and former practices which allowed the industry to increase profits at the expense of customer compensation and coverage should be to a large extent ameliorated, but the increase in a healthier customer base promises to somewhat (if not mostly) offset such losses.

    I really do not hope to argue that particular point about exact profits because until the ACA is in full effect, all the prognosticating in the world pales to actual results.

    What I will comment on is my reason for discussing the insurance companies. When Mr. Obama began discussing Healthcare, and that was before he even ran, his goal was some sort of ‘Single Payer’ or a ‘Universal Health Care’ system.

    Like you say, there may indeed be a reduction in health insurance annual profits, but that is a HUGE win in comparison to them largely being tossed out of the market by Universal Health Care. That is why they came to the table. That is why they participated in the debates, the backroom dealings, and the eventual drafting.

    With the amount of political capital and popular mandate that Mr. Obama brought to the table, the Insurance Companies knew they had to compromise. With Democrats in control of Congress at the time, and no one really wanting to upset the traditional healthcare system ‘too much,’ dances were danced, new relationships were formed, and happy endings exchanged… everyone satisfied… well except perhaps for the peons who will be on their hands and knees having to deal with the mess.

    The Right Wing is not offering an alternative Healthcare Reform. If they can succeed in destroying the ACA, then those who are invested in the traditional system continue to profit. The Right will also find a treasure of political capital…at the very least, enough to carry them right through the next election cycle.

    Overall though, I agree with the point you made, money shows no allegiance except to itself. Just because one financial sector suffers somewhat, another may find a way to profit. The vast, vast majority of people who invest in the markets only have one interest… and it is the same as their ethic…

  • Anonymous

    “Obama To India: Block Production Of Low-Cost Generic Drugs . . . Or Else” by Jonathan Turley.

  • Gary D. Vaughn

    My republicans mandated that I purchase car insurance with a cost to me for un=insured drivers and comprehensive plans that add a lot of money to my and everyone’s policy. I don’t see this mandate as any different. There will still be deadbeats, hopefully just not as many. And maybe my insurance company can finally drop the added cost for comprehensive coverage.

  • Gary D. Vaughn

    Fox has them believing that Obamacare will target itio..I mean conservatives and slow walk their hip replacements for 4 years. I watched that fiasco and got a real good belly laugh. Sadly, they used hip replacement because they know their audience all probably have had or need one. I say remove the medical device tax and put an idiot tax on instead. You could charge a lower rate, as Fox proves there are plenty of idiots out there.

  • Anonymous

    “Under Obamacare, if all of the 30,000,000 so called uninsured people (and not necessarily American citizens) are added to the system, do you really believe that you will be able to get quality health care in a timely manner??”

    This is the argument against it that bugs me the most. Are what you saying that, of all the things right and wrong with the current system, you believe that one of the things that is RIGHT is that pricing 30 million people out keeps the lines down?