Lobbying

How the Insurance Industry Funded Small Business's Anti-Obamacare Message


How the Insurance Industry Funded Small Business's Anti-Obamacare Message

Photograph by Robert Simon/Getty Images

The National Federation of Independent Business, a small-business lobby that opposes the Affordable Care Act, quietly cashed an $850,000 check from a health insurance industry lobby two years ago, National Journal reported on Tuesday. Advocacy groups can legally move their money in secret, but reporter Chris Frates found an expense by the insurers’ group, America’s Health Insurance Plans, on 2011 tax records that neatly matched a donation to the NFIB the same year. The NFIB has been lobbying to repeal an Obamacare tax on health insurance plans that the Congressional Budget Office has said would largely be passed on to consumers and businesses. From National Journal:

The back-channel spending shows how insurers were able to fund a key—and much more politically popular—ally in their fight against the premium tax. After all, helping small businesses is a political no-brainer while aiding big insurers is a political nonstarter.

NFIB officials say they are fighting the tax because it will disproportionately affect small businesses whose owners and employees will end up footing the bill. They expect insurance companies will simply pass along the cost of the new taxes to their customers, which, according to one congressional estimate, could cost a family as much as $400 in 2016. Meanwhile, big corporations that self-fund their insurance plans are exempt from the tax.

The look behind the curtain is sure to fuel the already-intense partisan warfare over the Affordable Care Act. Republicans have vowed to run against the law in 2014 and are almost sure to point to provisions like the premium tax as reasons why the law should be repealed and its supporters replaced. Democrats, meanwhile, are likely to point to the insurance industry’s shadowy spending as more proof of why reform is needed.

In the National Journal story, neither group comments on the $850,000, but both acknowledge working together.

AHIP spokesman Robert Zirkelbach points me to a 2011 announcement saying the groups would work together. The announcement doesn’t mention the money. NFIB spokeswoman Cynthia Magnuson said in an e-mail, “We feel comfortable in engaging with groups like AHIP where we share a common interest on a particular issue, such as seeking the repeal of the health insurance tax.”

Some in Washington call this message-laundering. Americans hold small business in higher regard than any institution other than the military. Groups with a small business pedigree make attractive mouthpieces for messages that lawmakers and the public would be skeptical about hearing from, say, big insurance companies. Hence, the NFIB-led campaign against the health insurance tax is billed as an effort by “the nation’s small business owners, their employees, and the self-employed.”

That’s not to say that the NFIB and its members don’t have interests at stake. The tax on health insurers, who are gaining millions of new customers through the Affordable Care Act, some of them subsidized by the government, may indeed be passed along to some businesses as higher premiums, especially in markets with little competition.

The NFIB, which fought the failed Clinton-era health reform and led the Supreme Court challenge to the Affordable Care Act, has taken money from outside groups before, including $3.7 million from Karl Rove’s Crossroads GPS. And the NFIB’s positions on other issues, such as tax rates for the wealthy, often echo the Republican Party line. There are also now small business groups on the political left, such as the Small Business Majority and Main Street Alliance, that generally reflect liberal positions.

It’s legal for the money to flow anonymously from the insurance lobby to the NFIB. (Insurers sent tens of millions more to the U.S. Chamber to lobby on health reform as well.) But it’s something that the public—and Congress—should keep in mind when evaluating the NFIB’s claims.

John_tozzi
Tozzi is a reporter for Bloomberg Businessweek in New York.

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