Blog - GOP and Big Business Not Seeing Eye to Eye on Health Care Reform

Interesting dynamic here — Alexander Bolton at The Hill reports that congressional Republicans are experiencing some strange tension between protecting big corporations and opposing the Democrats’ health care reform effort in Congress.

Tension between Republicans and the nation’s top CEOs over healthcare reform escalated this week when the executives released a report praising aspects of President Barack Obama’s top initiative.

Republicans in Congress and some of their business allies in Washington are fuming over a new report commissioned by the Business Roundtable (BRT), an organization that represents more than 50 of the nation’s biggest corporations. […]

While the 24-page report does not specifically back any of the Democratic healthcare measures, it cites cost-cutting provisions in the legislation that could lower the “trend line” of rising employer healthcare costs, which it predicted could reach an average of $28,530 per employee by the year 2019.

“We estimate that if enacted properly, the right legislative reforms could potentially reduce that trend line by more than $3,000 per employee, to $25,435,” the report stated. […]

GOP aides say the party’s relationship with the business association has deteriorated in recent weeks as the Roundtable continues to work with Democrats in the White House and on the Hill to advance healthcare reform.

GOP lawmakers have become increasingly critical of the Roundtable for failing to take more of an active role in standing up to Obama on healthcare reform. But several said they were disappointed and perplexed by the business group’s latest action: the release of a report that gives Obama valuable rhetorical ammunition against Republicans.

In creating their bill, Democrats in Congress and the Obama Administration have been careful to retain the support of big business. They’ve had a long-standing agreement with the pharmaceutical industry to maintain the dominance of name-brand drugs. The health care bills Congress is working on reflect this deal, and the benefit for the drug companies is reflected in their growth estimates over the next few years.

And by coupling a requirement that all individuals purchase insurance with a weak public option that is expected to cover only 2 percent of the population, the insurance companies will be getting tens of millions of new customers and no new competition. The CBO has estimated that the weak public option plan that’s being considered by both the Senate and the House would be more expensive than private policies because they would “engage in less management of utilization by its enrollees and attract a less healthy pool of enrollees.” In other words, the public option plan has basically been made into a subsidy for private insurers that will take sick customers off their hands.

Democrats are using the Business Roundtable report to make the Republicans’ look marginal in their opposition to the health care bill:

The BRT is made up of all the biggest U.S. companies. Generally, these companies provide health insurance for their employees, so the savings that would come from the bill would be a boon for them, which is basically what they said in their report. Small and medium-sized businesses that currently don’t provide insurance for many of their employees have a lot less to gain from the bill.