Why the ObamaCare ‘Dirty Deals’ Don’t Tarnish the Law

Breaking! The White House engaged in secret deal-making with the pharmaceutical industry to help enact health care reform.

Or so went the headlines last week.

“Report: [White House] pushed hard for PhRMA health reform deal,” Politico revealed.

“Now we know why President Obama broke his promise … to have health care reform televised on C-Span,” the Washington Examiner‘s Conn Carroll concluded.

Yes, newly released White House emails show that the administration helped kill a plan to import cheaper drugs and nixed several other punitive measures aimed at Big Pharma. In exchange, the Pharmaceutical Research and Manufacturers of America pledged to cut $80 billion in drug industry costs and run an ad campaign supporting the health reform legislation.

Those would be sensational details — if they hadn’t already been reported in California Healthline and many, many other publications.

Three years ago.

ACA Dogged by Charges

Of course, backroom deals are a part of any major legislation, including the original Medicare law. The final push to pass Medicare Part D, under President George W. Bush in 2003, featured legendary arm-twisting and promise-making, too.

But the PhRMA story has had legs — even if it’s nothing new to regular “Road to Reform” readers — because it fits critics’ broader narrative around the Affordable Care Act: that the law is full of “dirty deals.”

Those critics are right, in a sense. Deal-making was rampant, as the law inched along, destined to pass by the slimmest of margins. And several agreements drew popular scorn, like the so-called “Cornhusker Kickback” that would have sent added Medicaid funds to Nebraska to secure Sen. Ben Nelson’s vote.

But arguments against the PhRMA deal are overblown, according to John McDonough, a veteran of the Senate Health, Education, Labor and Pensions Committee and author of “Inside National Health Reform.”

McDonough didn’t participate in the White House or Senate Finance Committee discussions with Big Pharma, but he wasn’t surprised by the emails that were released last week. And he’s still convinced: The agreement with PhRMA was necessary to getting the ACA through Congress.

Imagine if PhRMA had spent $150 million to oppose the law rather than championing it, McDonough argues. “That could have been the difference” between passage and failure, he told California Healthline.

Perhaps one problem with perception, McDonough notes, stems from then-candidate Obama’s impossible campaign pledge in 2008 to televise all health reform negotiations. The promise was either terribly disingenuous or naïve — could a Republican senator truly float a compromise, when the senator’s supporters would have immediately criticized it? — and set up expectations that couldn’t possibly be met.

Instead, the PhRMA deal has served as stalking horse for opponents of the ACA, who are less concerned with the actual agreement and mostly upset that the law passed, McDonough concludes. Even House Republicans, who spent over a year pursuing the emails, have touted the agreement less as a sign of the ACA’s structural flaws but mostly as evidence that the White House failed to live up to promised transparency.

Looking Behind, Looking Ahead

The most telling example of why last week’s “news” about ObamaCare actually wasn’t: The secret White House-PhRMA deal was so broadly known that liberal supporters of the administration even suggested that the terms weren’t good enough. Slate’s Timothy Noah in 2009 sniped that the deal was the president’s “dumbest mistake,” arguing that the White House should have secured billions more in additional savings from Big Pharma.

If anything, the documents reveal politics as usual, Matthew Arnold observes in Medical Marketing & Media: a White House attempting to muscle through major legislation and PhRMA playing its role as drug industry advocate.

This episode may be quickly forgotten, especially if the Supreme Court strikes down the health reform law later this month. But if the ACA is allowed to stand — and Republicans are re-energized to overturn the law this fall — expect to hear even more about the White House’s health care dealings.

Here’s what else is happening around the nation.

Administration Actions

  • In a statement released last week to mark LGBT Pride Month, HHS Secretary Kathleen Sebelius noted that the Obama administration’s “core belief in equality” extends to providing those who are lesbian, gay, bisexual or transgender with affordable and accessible health care through health reform and various other initiatives (Viebeck, “Healthwatch,” The Hill, 6/1).
  • President Obama‘s re-election campaign has launched a Spanish-language television advertisement to promote the federal health reform law to Hispanic voters, a crucial voting bloc. A campaign news release noted that the overhaul would allow more than 730,000 young Hispanic residents to remain on their parents’ health insurance plans and make insurance coverage accessible to up to nine million additional Hispanics by 2014 (Baker, “Healthwatch,” The Hill, 5/30).

Eye on the Courts

  • Anticipation and debate over the U.S. Supreme Court‘s ruling on the federal health reform law has stakeholders and lawmakers concerned about the future of the law’s popular consumer benefit provisions. Observers say they fear the provisions might not stand, even if only the law’s individual mandate is struck down (Jan, Boston Globe, 6/5).
  • At a Commonwealth Club event in San Francisco last week, House Minority Leader Nancy Pelosi (D-Calif.) said she expects the U.S. Supreme Court to vote 6-3 to uphold the federal health reform law. Pelosi added that she believes that the law’s “constitutionally is ironclad” (Richman, San Jose Mercury News, 5/29).

In the States

  • In recent months, several conservative organizations have led efforts to discourage state lawmakers from pursuing legislative measures to establish the health insurance exchanges required under the federal health reform law. The groups have argued that the federal government will be unable to implement the overhaul without the exchanges. One group said the lobbying effort has caused 10 states to delay action on the exchanges (Kennedy, USA Today, 5/29).

On the Hill

  • Democrats are divided over a 2.3% medical device tax, which is projected to raise $2 billion annually beginning in 2013 to help fund the federal health reform law. A recent House GOP leadership memo indicated that the House could vote on a bill (HR 436) that would repeal the tax as early as June 4. The bill has 238 co-sponsors, including 10 Democrats (Haberkorn, Politico, 5/30).

Rolling Out Reform

  • Health policy experts are concerned that there could be “major logistical challenges” to successfully establishing health information technology systems that are able to handle enrollment procedures when the state-based health insurances exchanges are launched in 2014. The foundation of the exchanges will be the IT systems, which will provide consumers with the necessary information to direct them to most compatible health plans available (Feder, Politico, 5/29).

Related Topics

Road to Reform The Health Law