Congress Is Up to Something

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 by guest blogger Diana Zuckerman, PhD, National Center for Health Research

If you think health insurance should be affordable and you didn’t get a 65 percent raise over the last two years, keep reading!

Congress is up to something, and only you can prevent it from happening. Even though the upcoming Supreme Court decision about the Affordable Care Act could drastically curtail it, that may not be the greatest threat to the millions of Americans who don’t want to lose their health insurance.

A greater threat comes from certain U.S. companies and from hundreds of members of Congress, and the culprits might surprise you.

The senators and representatives you need to worry about include some of the most conservative Republicans, but also some Democrats that are usually strong supporters of patients and consumers—including Elizabeth Warren, Chuck Schumer, and Barbara Mikulski.

And they’re bowing to pressure from companies that advertise on NPR, your favorite TV shows, and other media, touting how they save lives every day. In truth, these companies do save lives. But they also make billions of dollars and don’t feel like giving any of it to help pay for the Affordable Care Act, as the legislation requires. And that could be fatal to countless Americans.

This is what happened: The three industries that would benefit from millions more insured Americans were asked to make small financial compromises to help pay the cost of subsidies that would make health insurance affordable to millions more Americans. The compromises included lowering certain prices, limiting profits, or paying a small excise tax on products sold.

Two of the industries kept their agreements, but the third immediately tried to repeal the part of the law that affected it.

No, it’s not Big Pharma that is the problem. Those companies understand how the Affordable Care Act helps their bottom line and their patients.

It’s not the insurance companies, either. They fought the Affordable Care Act but eventually agreed to the terms that have helped keep prices under control. They haven’t reneged, and they even lined up in greater numbers to sell policies at lower costs through the state exchanges this year.

The problem includes companies that make lifesaving heart valves and stents, hip and knee replacements, PT scanners and mammography machines, and the contact lenses that millions of us rely on.

The medical device companies selling these and other products spent more than $150 million to try to repeal a 2.3 percent tax on the devices they sell in the U.S. These include implants that cost $20 to make but that sell for $500, as well as devices that sell for half a million dollars but are as obsolete as your iPhone 2 after a few years.

They’re complaining to Congress that the tax is killing jobs and cutting funds for the research and development needed to create the innovative products that patients deserve. If they get their way and the tax is repealed, there will be $29 billion less to pay for health insurance over the next decade, and we can expect Pharma and the insurance companies to try to get out of their contributions, as well.

I’m a scientist, so I decided to examine the evidence for the “job killing” and other claims made by the device companies.

First we looked at stock prices—all publicly available online. Not all device companies have publicly traded stock, but the ones complaining the loudest about the device tax do. We looked at the 12 largest U.S.-based companies that sell nothing but devices (not ones that also sell pharmaceuticals or appliances). In the two years since the tax started, their stock went up a whopping 65 percent on average—much more than the NY Stock Exchange (25 percent) or the largest U.S.-based pharmaceutical companies (54 percent).

Then we looked at sales. Sales steadily increased over the last decade, including after the device tax was implemented. So, there would seem to be no reason to cut jobs and every reason to hire more workers.

What about R & D costs to develop new products and possibly hire new workers? Again, a steady increase over the decade, and after the tax went into effect.

What about profit margins? These were stable over the decade for most companies, despite the 2008 economic meltdown and despite the device tax. Again, no reason to cut jobs or raise a ruckus about the tax.

And yet, the House of Representatives has passed several bills that include repealing the tax, and the Senate passed a bipartisan resolution declaring its opposition to the tax. Fortunately, the resolution specified support for repeal only if another source is designated to make up for the $29 billion in revenues that the tax would provide.

Finding another $29 billion seems unlikely, yet congressional leaders keep saying there is overwhelming support to repeal the tax, and journalists repeatedly report that “widespread bipartisan opposition” to the tax will inevitably result in a repeal.

If that happens, the dominoes start to fall and the Affordable Care Act would become unaffordable.

Don’t let that happen. Here’s more information and the Senate voting record on repealing the tax. Let your voice be heard.

Diana_ZuckermanDiana Zuckerman is the president of the National Center for Health Research. She received her PhD from Ohio State University and was a post-doctoral fellow in epidemiology and public health at Yale Medical School. After serving on the faculty of Vassar and Yale and as a researcher at Harvard, Dr. Zuckerman spent a dozen years as a health policy expert in the U.S. Congress and a senior policy adviser in the Clinton White House. She is the author of five books, several book chapters, and dozens of articles in medical and academic journals, newspapers, and websites.

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2 Responses to Congress Is Up to Something

  1. Alice Green January 8, 2015 at 1:04 pm #

    Diana, If this vote has already been passed, is it too late to write to our Congress people and tell them we oppose this Amendment?? If so, then what else can we do to stop this from happening?? I have not heard of this until your message here on this blog and I get all kinds of political email. I want to do something, but if it has passed, what can I do to oppose it now? Please let me know what to do, and I will do it as soon as possible. Thank you!!

  2. Lori Brown January 9, 2015 at 2:12 pm #

    Sooo greedy, these companies. And they have hoodwinked the public into thinking it would harm the patients who need the devices. Thank you Dr. Zuckerman, for uncovering the real culprit and the terrible consequences if we let this happen.

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