New Analysis Shows $4 Million from Top Health Insurers and HMOs

Santa Monica, CA — As the Democratic health care bill goes to a vote today, the Foundation for Taxpayer and Consumer Rights (FTCR) released a new analysis of health insurance industry contributions to Sacramento politicians which helps explain why they would require Californians to pay for private health insurance but refuse to regulate what insurers can charge for the policies.

Health insurers and their lobbying associations gave a total $4,094,132 to Governor Schwarzenegger, members of the California legislature, and political parties between January 2001 and June 2007.

Assembly Speaker Fabian Núñez and Governor Arnold Schwarzenegger, the architects of a potential health care deal in Sacramento, have led the pack in contributions from the industry. Schwarzenegger has received $719,600, and Núñez has taken $136,300, more than any other legislator.

“No one can say, or will admit, how much health care will cost or who will pay. With $4 million from health insurers and 6 dozen fundraisers in the last three weeks, no one in the capital wants to offend the health insurers,” said Jerry Flanagan with FTCR.

AB 8, by Assembly Speaker Núñez, benefits insurers at the expense of Californians by requiring workers and taxpayers to pay for coverage but does not cap what insurers are allowed to charge. Under AB 8:

– If the cost of coverage exceeds 5% of income, the worker is not required to buy coverage but will be uninsured or under-insured (forced to buy a high-deducible, low-benefit policy). Those that currently receive coverage from their employer may not be able to afford that coverage in the future.

– If a worker earns below 300% of the federal poverty level, the worker’s share of coverage is capped at 5% and the remaining cost will be paid by taxpayers with no regulation of how much insurers can charge.

The analysis includes contributions made by the top six health insurer and HMO donors — Blue Cross, Blue Shield, PacifiCare, Molina, Health Net, Aetna — as well as the Association of California Life and Health Insurers and the Association of California Health Plans:

Assembly: $1,258,873
Senate: $1,058,912
Dem/Rep Party: $1,056,747
Schwarzenegger: $719,600
TOTAL: $4,094,132

“Lawmakers are focused on the interests of the health insurance industry to the exclusion of consumers and workers, who will be required to purchase a private health insurance policy regardless of what it costs or covers under the emerging deal,” said FTCR’s Carmen Balber.

Legislation that would have required health insurers to defend their overhead and profit while getting approval for premium increases to regulate the insurance industry was defeated in the legislature in July. The legislation would have applied to health insurers the same requirements that apply to the auto insurance market and have saved drivers $23 billion since 1988.

The five California companies (Kaiser, Blue Shield, Blue Cross, PacifiCare, and HealthNet), that control 80% of the HMO market, have recorded profit increases of $11.7 billion since 2002. Four of the companies transferred $4.1 billion in profit to out-of-state parent companies since 2002. The six largest HMOs spent $1.6 billion on marketing in 2006.

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FTCR is California’s leading public interest watchdog. For more information, visit us on the web at www.ConsumerWatchdog.org.