Insurers Adopt Tobacco Strategy, Make Case for the Public Option

by Karoli on October 12, 2009 · 19 comments

Health insurers are running their opposition to health care reform just like the tobacco lobby did 15 years ago. Working with established right-wing think tanks with varying interests, they are trying to mobilize businesses, religious leaders, tax reformers, and the media to carry their message that health care reform is bad for our country. Here’s how it was done, then and now. Only now, we can tell them “Not this time.”

Price Waterhouse Coopers released a report on the “Potential Impact of Health Care Reform on the Cost of Private Health Insurance Coverage” today. Simply put, it threatens that any reform could have a “significant impact” on the cost of private health insurance coverage. It goes on to outline some really scary numbers about how premiums could increase by 111% by the year 2019, and takes aim in particular at the Baucus plan’s call for “weak” individual mandates. This report proves one thing: The insurance lobby is using a 15-year old tobacco playbook. As Ezra Klein points out:

The report was farmed out to the consultancy PricewaterhouseCoopers, which has something of a history with this sort of thing: In the early-’90s, the tobacco industry commissioned PWC to estimate the economic devastation that would result from a tax on tobacco. The report was later analyzed (PDF) by the Arthur Andersen Economic Consulting group, which concluded that “the cumulative effect of PW’s methods … is to produce patently unreliable results.” It’s perhaps no surprise that the patently unreliable results were all in the tobacco industry’s favor. He who pays the piper names the tune, and all that.

Would it surprise you to discover that the insurance industry strategy is in that memo, right down to bringing in the same players?

Probably not, but this memo1 (PDF) (h/t Media Matters for America) still made my jaw drop, not so much from the carbon-copy strategy in play, but from the list of players and corrupt crossover of non-profit and corporations. Philip Morris, chagrinned at the idea of funding health care reform with excise taxes on tobacco products, formed a four-prong strategy to defeat it.

15 years later, the issue really doesn’t matter. It could be tobacco, climate change, gay rights, health insurance reform, Wall Street reform, or anything else. The goal is the same: Convince voters to act against their own interests. This is exactly what is happening now. Here’s how:

  • Prong 1: Mobilize the religious right – Philip Morris understood the value of using cultural wedge issues to stoke the fire of fundamental Christians. Using the Acton Institute for the Study of Religion and Liberty to publish “scholarly” articles opposing “sin taxes”, they were able to move a message through  religious communities that health care reform was a threat to basic principles. Today, we have Catholic bishops rising in opposition to the current bills, using abortion, conscience, immigrants, and affordability as their wedges, church insurance providers ‘fear reform’, and the Family Research Council faithfully trumpets their opposition in lockstep.
  • Prong 2: Mobilize the business community – With the aid of think tanks like Cato Institute, US Chamber of Commerce, American Enterprise Institute and many others, the author of the memo was able to work his message into their ‘scholarly’ reports around regulatory burdens on business, erosion of freedom, allegations of economic disaster, and the decline of the US health care system in general. Getting the business community to fall in line behind the opposition was critical, because health care reform then, as now, would have benefited business. It was essential, therefore, that the argument be compelling enough on an ideological plane to convince business owners to act against their own interests and stand in opposition.It wasn’t always easy. One of the business groups PM sought to get on board was The Business Roundtable. The author of the memo notes:

    Nevertheless, BRT has had a history of softness on tax issues, and we need to be extra vigilant in monitoring their activities and positioning on this debate. In particular, we need to be careful of White House efforts to divid the business community in exchange for some promised benefits, and especially of attempts by other BRT members to sell out the tobacco industry to save their own skins.

    Remarkable arrogance, that.

    In 2009, The Business Roundtable supports health care reform as currently proposed with one exception: they do not support any public option in competition with private insurers.

  • Prong 3: Stoke up the anti-tax/anti-government groups. Here’s where you’ll see the most obvious similarities. PM recruited Americans for Tax Reform, a “staunch ally of PM for a number of years in many tax battles” to stir up as much opposition as possible by using their expertise in the “town hall and direct mail formats” as a co-ordinated effort with Citizens for a Sound Economy (now FreedomWorks). PM funded a $400,000 initiative in districts represented by members of the House Energy & Commerce committee to stir and stoke the grassroots, via “town hall meetings, radio and print ads, direct mail, patch-through calls to the Capitol switchboard, editorial board visits, polling data…”. The message?

    The goal of this effort is to show the Clinton plan as a government-run health care system replete with higher taxes and government spending, massive job losses, less choice, rationing of care and extensive bureaucracies. CSE is taking aim at the heart of the plan – employer mandates, new entitlements, price controls, mandatory health alliances, heavy load of new taxes and global budgets — and, with the program well underway, is by all accounts getting rave reviews in the respective districts

    This summer’s FreedomWorks bus tour  and March on Washington‘ were not accidents, nor did they rise from a wellspring of citizen discontent. They were funded, orchestrated, and stirred by the insurance lobby. Until this year’s tax filings are complete, there is no way for me to show you documents proving that. Nevertheless, the message is exactly the same now as it was then. Dick Armey’s call for action against “socialized medicine” is no different than CSE’s opposition to a ‘government-run health care system’. (Where have we heard those words lately?)

  • Prong 4: Control the mainstream media message. PM went to the Manhattan Institute and straight to Betsy McCaughey. The author of the PM memo “worked off-the-record with Manhattan and writer Betsy McCaughey as part of the input to the three-part expose in The New Republic…” Of course, hindsight being 20/20, her report was thoroughly debunked after the Clinton plan was defeated without getting out of one committee. In 2009, the insurance lobby reached out to McCaughey as early as February and again in July just as the House committees reported out their version of health care reform (HR 3200). She launched the current round of misinformation on Fred Thompson’s radio show, her message mostly aimed at seniors (death panels, Medicare cuts). Why seniors? Because internal polls showed that seniors were the most likely group to oppose health care reform, and most responsive to negative messages surrounding it. Newt Gingrich has been instrumental in carrying the message to seniors and faith groups. Fortunately, Betsy McCaughey cannot erase history or PM’s arrogance, and history proves her lie and master, and now you know who the architect of the opposition is, and what their motives are for opposing health care reform.

One final thought: Without exception, the groups listed in the tobacco strategy memo are, were, and have been funded by the same people: Scaife, Koch, Adelson, DeVos, Broekhuisen (Elsa Prince). These are a very small group of people who control billions of dollars. They have built a strong, taxpayer funded (via their non-profit status) stable of think tanks and ‘educational organizations’ to blanket voters with ideas that will compel them to act against their own interests. Besides money, what motives would drive them to throw millions at an effort to allow more people to die, go bankrupt, or lose everything?

Ponder that, then ask yourself who has the power to push back? There’s only one group acting on behalf of the people: progressives who are actively pushing for a public option to be included in the final version of the bill. Why? Because the health insurance industry has shown us clearly they are not interested in our interests. The only way to tell them they have to be is to have an option that excludes them entirely, which is why the public option has become such an important component to health care reform.

1 The probable author of the memo is Roy E. Marden, former policy analyst at Philip Morris Companies, now a director of the Heartland Institute, a think tank funded by Philip Morris Company.

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  • lelawilley

    Just wish more of the RWNJs were actually interested in the facts. They would rather believe lies being spouted even when those lies are debunked. Good job.

  • Cynematic

    This is why I *almost* wanted banks TBTF to go ahead and fail, because it could've flushed out the corporatocracy nicely, along with the money that funds a lot of this hateful wingnuttery.

    Slight problem, though–our pensions and 401k plans were held hostage by Wall St. It would've caused a lot of misery and suffering among everyday people.

    In the meantime, why don't we bring back the Glass-Steagall firewall? We obviously need it.

  • http://www.drumsnwhistles.com/ Karoli

    Thanks…we can at least hope maybe some are open to a few facts. That memo is a huge eyeopener.

  • http://www.drumsnwhistles.com/ Karoli

    I don't understand why there isn't more hue and cry for Glass-Steagall. Because it would mean divorcing unholy alliances? I have no clue, but the derivatives market is going to rise up and bite us again soon, I think.

    One interesting factoid: Phil Gramm was the architect of Glass-Steagall's undoing. In this tobacco memo, it is Phil Gramm's 'alternatives' that are touted as the answer to “Hillarycare”. Phil Gramm was, of course, the darling of the bankers and investment houses (along with the RW think tanks named in the memo), and now serves those masters well with UBS. He's not really in the forefront of the current debate, but I'm sure he's playing behind the scenes.

  • disgustedbyyourblog

    You on the Left are sadly blinded. You never answer the simple question. If Medicare/Medicaid, Social Security are bankrupt, how do you expect to pay for your Government Run Health Insurance for all and avoid breaking our economy?

    You site all the articles to bolster your argument for progressive thinking, but you never answer the basic economic questions of paying for your plans. Why Why Why?

    I don't want a pissing contest of articles. I want you to explain how you justify breaking our economy so that you don't fund your own health expenses.

    You site articles explaining how the right wing politicians spend money on themselves, then you turn around and propose how the Progressives will be even better at spending even more money on everyone.

    Why is one bad and one good?

    You talk in circles and you make me so frustrated. I am beginning to believe you really don't understand what you are supporting. I have to believe you are so naive that you really think there is a great big pot with an unending stream of money, and you progressives just want more of it to come your way… You do not seem to understand the dire straits our country is in. If you did, I can't believe you would continue to scream for all the spending you are demanding.
    Karoli, you use lines like 'sit in the time out chair', stomping their feet', and I used to be amused. Now I am no longer amused, but concerned about your insistance on spending us into bankruptcy as fast as you can.

    I realize you will be satisfied that I am a sucker for all the points listed in this article, but I wish you would take your blinders off and look at the numbers. The money just isn't there to do what you want to do…

    Unfortunately I continue to be disgusted by your blog.

  • http://www.drumsnwhistles.com/ Karoli

    LOL! If you're disgusted, don't read it.

    Are you seriously arguing that the use of propagandist techniques worthy of Russian kudos in the 50's are justifiable? Do you view that as an honest debate?

    I have given you the roadmap written 15 years ago as the strategy to defeat health care reform. The majority of the “facts” churned out by these think tanks were demonstrably false and have been debunked over and over again.

    Yet, you still quote them, chapter and verse, as though once proven wrong, everything else they say must be right.

    Read the memo. I didn't write it; one of the primary architects for your side did. Especially dig deep into the tone, the derision aimed at the people of this country, the middle class. Knowing what you know today about the effects of tobacco, can you seriously argue the intellectual honesty of their arguments?

    15 years later the same strategy and tactics are in play. Instead of standing on facts that actually have some substance, you're claiming facts not in evidence.

    Here's a fact for you: On a per capita basis, not dealing with the health crisis we have will cost everyone, rich and poor alike. Right now taxes are as low as they've been in decades. It's no coincidence that the gap between the rich and poor is wider than it's ever been, and that the middle class is slowly sinking into the poverty zone.

    Just as you claim I have not answered any of your questions, neither have you answered mine; namely, how you justify the spending in Iraq (I will not even include Afghanistan in the question), the Bush stimulus payments, the unfunded Medicare Advantage subsidies which are the primary source of insurers' profits, and any number of other initiatives left over from the days of Reagan, Bush and Bush?

    I don't really expect you to answer, any more than you expect me to. My point is simply this: less than 1% of our current defense budget could pay for health care reform. Single payer, even. Yet no conservative would ever consider such a thing. Why would we quit paying for bombs to start preserving ordinary lives?

  • disgustedbyyourblog

    LOL Back at you. Your ignorance on this subject continues to scream from your blogs. Again, I don't want a pissing contest between right and left articles. I can find the same articles to point out how Obama and his appointees are snowing people like you, which means I have to foot the bill for your naivette and ignorance.
    Well, at least you did answer my question. You and many like you do think there is an unending pot of money that those Bad Ol Republicans get their hands into and keep it from flowing to the middle class. You do think that it's just a matter of fighing back and knocking off the other guy so you can get yours. You are so entrenched in this thinking, that you will vote this country into bankruptcy.
    I especially LOL that you actually believe that it would only take less than 1% of the current defence budget. Really Karoli? Have you actually looked at the numbers??? You really believe that the single payer system to pay for all Americans' Health care will only cost less than 1% of our current defense budget? I thought so, but was hoping otherwise. Are you really so convinced that the right (and only the right) is so greedy that they want to keep less than 1% of all that money just sitting around in big fat money pots and spend it only on blowing up things and countries just because they like to and to keep you from getting your medical bills paid? You find every article out there to support your belief.
    Fact is both left and right in government squander money. We can find articles to prove both sides do this. The private sector squanders money too. But your solution to hand the business decisions over to the government, and to hand over your liberties to a government that has the power to legislate your money (our money) any way they want to is simple and naive. Your simple trust in a government to play nice for the middle man is in fact what Lenon convinced the Russians his government would do and the people rose up and supported his government running everything. Then, if you look at history, (there are many books and articles to support what I am saying) these same people were plunged into one of the most oppressive eras in history.
    But what, you say Karoli? Oh this is America. That would never happan here! Why not? Why would you hand over your liberties, and balance of powers, corrupt as they are, to one central place with the law on their side rather than yours and trust that they have the good sense to make sure that “all that money” goes to all Americans' health bills?

    It's good to look at strategy and tactics. But it's even better to learn from the results of those strategies and tactics. Please take a lesson from history, study basic economic principles and rethink what it is your are asking every American to give up just so that we pay for your health care.

    Ask your Republican husband to help you with this…

    Karoli, these things have been done before. They fail badly, the same tactics are being used by the left.

    Take some economic courses from both conservative and liberal professors. Look at history. Then decide. But in the mean time, please stop pushing for the bankruptcy of this once great nation.

  • http://momocrats.typepad.com/momocrats/2008/03/phil-gramm-than.html Cynematic

    I know all about Phil Gramm, having written a MOMocrats post called “Thanks for the Subprime Meltdown, Phil Gramm!” The fact that Bill Clinton signed this piece of crap legislation was an additional reason why I couldn't support Hillary. Was she really going to repeal a piece of legislation her husband had signed, and in doing so rebuke part of his legacy?

    Although, with Obama, it's not like we're seeing him take any leadership in getting rid of this unregulated environment even though he has no personal or political conflict of interest in going against Bill.

  • Cynematic

    Disgusted (or should that be “Disgusting”?),
    I read through all that and didn't see your reply to Karoli's question on the Iraq war and how much that costs us per day.

    Where were you in Feb/March of 2003, when this war was being launched? I don't know about you but I was out on the streets with hundreds of thousands of people screaming at the top of our lungs that we should not enter into this–faked evidence, it'll be a quagmire (yup, still there, STILL having our servicepeople killed and STILL sucking the life out of our economy), we couldn't win where the British had failed. So unless you can show some evidence that the billions unaccounted for that went to Hallburton pisses you off as much as spending taxpayer money to save 45,000 Americans from needlessly dying for lack of health care per year, you don't have much credibility.

    Why shouldn't people who earn more than $3million a year pay more in taxes? You know, like they did under that Marxist Reagan?

  • http://www.drumsnwhistles.com/ Karoli

    My sense is that we're not going to see pushback until health care
    reform passes. that's got to get through before there's anything
    aggressive. And duhhh, I remember your Phil Gramm essay on MOMocrats!
    The brain melts in the face of all the info hitting it.

  • http://www.drumsnwhistles.com/ Karoli

    I think at this point, it is a waste of your time and mine to argue
    the point. Your mind will not be changed, nor will mine. There is a
    time where it's worth acknowledging that we both have a grasp of our
    facts, whatever those are, and agree to disagree. While it bothers me
    that you are willing to be led by those with high monetary gains in
    front of their rhetoric, I'm grateful that we live in a country that
    allows us both to hold differing opinions, express them, and vote
    accordingly. The post you're commenting on simply reported facts. The
    millions of dollars spent by a very few people to shape the debate is
    not what I call democracy. As long as you're okay with that, so be it.

    By the way…my Republican husband is no longer a Republican (nor is
    he a Democrat), primarily because of their refusal to sit down at the
    table and have an honest debate about health care reform. Further, he
    strongly supports a public option because he has enough real-life
    experience with insurers to understand that until they are forced to
    deal with their customers honestly, they won't. He will also tell you
    about the free markets we don't have in this country, and how the
    actions of a few endanger the lives, livelihoods, and financial
    security of many. Again, his perspective comes from years of
    observation inside and outside of the industry. His word, not mine,
    for the intellectual dishonesty of the Republican attitude on health
    care reform? Shameful.

    That doesn't mean he's turned into a liberal. He hasn't. He's
    inherently conservative, and believes the best option for health care
    is single payer, because it's the most cost-effective. But he's
    pragmatic, and will support a strong public option in lieu of single
    payer, with the goal of getting to single payer at some point. He also
    believes that Medicare should be expanded to age 50 as part of the
    final bill, with Medicare Advantage phased out over the next 10
    years. At the core of his beliefs, there is a strong understanding of
    the economic disaster awaiting large and small businesses as well as
    individuals if we do not get our health care system reformed.

    So…I agree to disagree with you. I'm sorry my views disgust you, but
    really, try on the other side of the debate for a few minutes and see
    if you can at least view it through a less tainted lens than the one
    bought and paid for by our insurance lobby. You won't agree, but you
    might be less disgusted.

  • disgustedbyyourblog

    Cynematic, You raise a good quesiton about war. When we went to war in Iraq I was concerned as to why Iraq when we were told Taliban's headquarters were in other places. When the WMD did not turn up as expected, I too was upset. The thing about Iraq that I take away is that Saddam was stopped from exterminating his own countrymen. The people are working towards a democratic government, and they are learning a different way of life to bring them out from under the affects of an oppressive government. If the reason for war in Iraq was only to line the coffers of Haliburton, then that's a tragedy.

    I don't rule out the need for a country to arm itself to protect itself. I support paying taxes to arm our military. That's what we do. We pay the military to protect us. It costs money. It causes death. It is necessary at times. Does that mean I think all wars are justified? No.

    Health care like anything else costs money too. I just look at how we pay for our own health care in a very different way than you. I look at the free market and private sector to provide jobs for our salaries and insurance for our catastrophic expenses to help cover them. I don't look to government to pay all of my medical expenses. I do not look to those who earn over $3million a year to pay for may medical expenses.

    How do you put Marx and Reagan together? When you know what Marx stood for and the results of countries that adopted his ideology, you don't get the results that Reagan institued here. So not sure what you mean by that. . .

  • disgustedbyyourblog

    Here are two web sites regarding the Public Option that might be of help to you.
    1. http://blog.heritage.org/2009/07/29/which-chart
    2. http://paracom.paramountcommunication.com/hoste

    You're not getting what you think you are demanding.

  • disgustedbyyourblog

    Here are two web sites regarding the Public Option that might be of help to you.
    1. http://blog.heritage.org/2009/07/29/which-chart
    2. http://paracom.paramountcommunication.com/hoste

    You're not getting what you think you are demanding.

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