Later On

A blog written for those whose interests more or less match mine.

Trumpcare’s Lonely, and Seedy, Supporter: Conflict of interest in action

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David Leonhardt writes in the NY Times:

The Republican health bill doesn’t have many outside supporters. Groups representing doctors, nurses, hospitals, retirees, patients of various diseases and even insurers have all criticized it. Some of the only outside praise has come from the chief executive of Anthem, the country’s second largest insurer.

And therein lies another tale of the Trump administration’s conflicts of interest.

It turns out that one of the bill’s few high-profile fans may not even support it on the merits. Instead, Anthem appears to be providing political cover to the administration at the same time that company officials are lobbying the administration for a favorable decision on another matter. It’s pretty brazen.

Here are the details: Anthem, which is based in Indiana, is already the largest insurer in California, Kentucky, Virginia and elsewhere. Two years ago, its chief executive, Joseph Swedish, made a big bet. He decided to put public pressure on Cigna, another major insurer, to accept a merger. Eventually, Swedish succeeded, and Anthem agreed to pay $48 billion to buy its rival.

But the Obama administration’s Justice Department filed suit against the merger, arguing that it would force consumers to pay higher prices. Last month, a federal judge agreed and blocked the merger. Cigna isn’t happy with the deal anymore either and has filed a $14 billion lawsuit against Anthem. None of it makes Swedish look good.

Anthem’s best remaining hope for the deal is probably to persuade the Trump administration to take a different view of the merger and unblock it.

Against this backdrop, Swedish wrote a carefully worded letter last week to Congress praising the Republican health bill. He stopped short of supporting the entire bill, as Jordan Weissmann of Slate has noted. Rather, Swedish lauded a few provisions (which would clearly help Anthem’s bottom line) and offered enough kind words that the White House could claim Anthem supported the bill.

“The time to act is now,” Swedish wrote. The bill, he added, “will ensure more affordable health plan choices for consumers in the short term.” More objective evaluators of the bill — like the Congressional Budget Office — are less sanguine.

Regardless of its accuracy, though, the letter seemed to make the White House happy. “Progress on repeal & replace: Major insurer supportive,” Kellyanne Conway tweeted, linking to Politico’s story about the letter.

More significantly, President Trump and Tom Price, the Health and Human Services secretary, granted Swedish a private meeting this week. At it, Swedish lobbied for changes to the bill that would benefit Anthem, according to reports in Bloomberg and Modern Healthcare.

Anthem’s chief financial officer, John Gallina, all but bragged the next day at an industry conference about the meeting’s success: “We feel very good, very encouraged, by the fact that the president and his team are listening and actually making changes based on feedback that the industry is providing.”

It’s too early to know whether his self-interested optimism is warranted. The health care bill is in enough political danger that no version of it may pass, and the Anthem-Cigna merger may likewise be unable to come back from the dead. . .

Continue reading.

Written by LeisureGuy

17 March 2017 at 4:30 pm

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