The health insurance industry always seems to win in Washington health care debates.
The most famous example was Obamacare, which transformed from a liberal crusade against insurance companies into a law guaranteeing them new profits, mandating Americans to buy their products, protecting them from competition, and providing hefty subsidies to shift skyrocketing costs onto taxpayers.
More recently, insurers dominated the so-called Inflation Reduction Act. Through the law, they protected the exemption their pharmacy benefit manager subsidiaries use to pocket huge rebates on prescription drugs and extended supersized Obamacare subsidies that flow directly to them. Now, insurance companies have convinced Democrats to shut down the federal government to demand yet another extension of those subsidies, which were supposed to be a temporary COVID-era measure.
If they succeed again, it will probably be because the biggest health insurance company in the country has turned the largest political advocacy group into something close to a wholly owned subsidiary.
I’ve written many times about AARP’s lucrative arrangement with UnitedHealth, in which the latter’s cash cow AARP-branded Medicare plans divert about 5% of premiums to pay “royalties” to AARP. We estimated these payments totaled around $800 million per year, around triple what AARP collects in membership dues. That already made AARP the $800 million gorilla in D.C. health care debates.