Insurance companies and health maintenance organizations (HMOs), which stand to make huge profits from the Medicare privatization proposal that Rep. Jim Renacci voted for this year, made significant contributions to his 2012 re-election campaign, according to a new report from Health Care for America Now (HCAN) and Public Campaign Action Fund (PCAF). Congressman Paul Ryan, the GOP vice presidential candidate, included the privatization scheme in this year's House budget.
Ryan's plan, endorsed by Republican presidential candidate Mitt Romney, would end Medicare as we know it and leave seniors without protection from soaring out-of-pocket medical costs while increasing insurance company profits by $16 billion to $26 billion in 2030, the report found. Campaign donations from these insurers have disproportionately gone to the House members, including Renacci who support the Ryan Medicare scheme. The pattern raises questions about whether the congressman is working for his constituents or for campaign donors from big insurance companies and Wall Street.
So far in the 2012 election cycle, insurance industry and HMO interests have given at least $14 million in campaign contributions to U.S. House members who voted for the Ryan Medicare privatization plan, the HCAN/PCAF report said. From the top of the ticket on down, federal candidates who supported the Ryan plan received nearly twice as much insurance industry campaign cash as those who voted against it. Romney has received $2.7 million from insurance interests this cycle alone. Renacci received $105,685 for his re-election effort.
For the insurance industry, the political spending is an investment that could reap enormous returns. A respected Wall Street analyst estimates that the market value of Wall Street-run health insurance companies will soon increase by $12 billion to $25 billion if the Republicans win the Senate and the White House, the report said. By 2030 the industry would post $16 billion to $26 billion in increased annual profits attributable to the Medicare privatization, according to a Harvard economist.
"It's no coincidence that big insurance is putting big money into races like Rep. Renacci's re-election campaign," said Brian Rothenberg, Executive Director, ProgressOhio. "To an industry obsessed with maximizing its returns, this is a smart investment that will yield big profits. The problem is, lawmakers like Rep. Renacci are supposed to be working for constituents, not for Wall Street."
The Ryan plan to privatize Medicare would raise the cost of health care for seniors by more than $6,000 a year and replace the guaranteed Medicare benefits counted on by seniors with a voucher to buy a health plan from a private insurance company. The voucher is designed to grow at a slower pace than medical costs, leaving seniors to make up the difference by emptying their pocketbooks.
New polling shows that seniors are extremely sensitive about the alliance between the health insurance industry and the Republican Party. More than half - 55 percent - of voters said they would be less likely to vote for a candidate who supports the budget that includes the privatization scheme, according to Democracy Corps, Greenberg Quinlan Rosner Research and Public Campaign Action Fund. But that swelled to 70 percent when voters were asked if they would be less likely to vote for that candidate if he or she also took thousands in campaign donations from insurance executives, lobbyists and political action committees.
"Medicare works for seniors, and Rep. Renacci ought to be working to protect Medicare and Medicaid, the two programs we depend on most for health care at the most vulnerable time in our lives," said Rothenberg. "Instead of helping insurance CEOs make more money and collecting campaign contributions for doing it, Rep. Renacci ought to be representing the current and future retirees in his district."
The report, along with a complete list of members and their total contributions from the industry, is available online at www.campaignmoney.org/reports/insurance and at http://healthcareforamericanow.org/health-insura