Background
‘The purchasing alliances would be similar to the corporate purchasing coalitions of the 1980s and dominated by the five largest health insurers: Aetna, Prudential, MetLife, Cigna, and Travelers. However, smaller specialty firms stood to lose 30 to 60 percent of their business, and insurance agents would be put out of business’ [2].
The tobacco industry’s success in mobilizing opposition to the Clinton plan among ideologically diverse constituencies underscores the challenge of overcoming corporate efforts to obstruct health care reform [12]
Methods
Search terms | Number of hits | Relevant documents |
---|---|---|
“Health Insurance Association of America” and Clinton | 38 | 0 |
“National Federation of Independent Businesses” and Clinton | 49 | 0 |
“U.S. Chamber of Commerce and Clinton; | 0 | 0 |
“National Association of Manufacturers” and Clinton | 65 | 0 |
“Association of Private Pension and Welfare Plans” and Clinton | 3 | 0 |
“Pharmaceutical Research and Manufacturer’s Association” and Clinton | 0 | 0 |
“Employee Retirement Income Security Act Industry Committee” and Clinton | 0 | 2 |
Results
‘…it is no coincidence that the politics have forced the level down from the proposed one time increase of $2.00 per pack to the current proposal of a 45¢ increase phased in over five years. While our opponents never miss a chance to promote their positions with the media, we have aggressively but quietly worked the pressure points because, in the end, it is votes that count not ink. In many ways, the excise tax fight has been a case study of combining our Washington talent and experience with our corporate resources to achieve the best possible outcome for the company’ [21].
‘Our federal excise tax strategy was based on several key assumptions. (C) First, a far less ambitious and consequently less costly package would give the Tax Committees more flexibility in terms of financing. This would give us room to maneuver on the tobacco tax. To impact that debate, we organized intense grassroots efforts targeting swing Democratic Members arguing against wholesale changes to the health care system. Efforts at the grassroots level eventually deadlocked key Committees and forced the Congress to retreat from the costly Clinton plan.
(C) And, with the House and Senate leadership initially depending on Democrats alone to pass legislation, the Democratic tobacco-voting bloc's leverage was significantly increased. We constantly worked to maintain the solidarity and intensity of their efforts. And as southern Democrats, their reelection difficulties were not lost on their leadership.
(C) Finally, our strategy was to win the issue in the House by concentrating our activities in the House Ways and Means Committee which would act first on the tax. Winning in the House would provide Senate Majority Whip Wendell Ford with an 'anchor' and a greater ability to negotiate in the Senate where our support is much weaker’ [21].
‘Throughout the year, our lobbying activities have included organizing Hill activities for labor and tobacco grower organizations, creating a grower advertising campaign, working with anti-tax groups to oppose excise taxes, funding several economic analyses suggesting alternative financing mechanisms, and developing and implementing an anti-excise tax grassroots campaign lead by those interests who have a direct economic stake in the outcome’ [21].
‘Assumptions
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The Administration will bring forth another National Health Care Plan in 1995.
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“Clintoncare II” will begin being drafted between now and year-end, and will be completed early in the session. The President will speak to Health Care in his State of the Union Address as a goal for the ‘95 session.
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Changes in the makeup of the Senate and the House will make it more difficult to get massive, government-run Health Care Plan passed. Therefore, the plan will be less ambitious than “Clintoncare I,” perhaps in over several years. Some of the more controversial aspects, such as employer mandates, regional alliances, etc., could be eliminated, thereby appeasing some of the opponents that lined up against the Plan in 1994. If that’s the case, we lose many of the allies we had in ‘94.
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Universal coverage remains the goal’ [41].
‘Early this summer (1994), the Senate Finance and the Senate Labor and Human Resources Committees favorably reported their versions of health care reform, and both Committees proposed a total tax increase of $1.00 per pack. Tobacco-state Democrats nonetheless were able to use their leverage as the congressional leadership searched for floor votes and incorporated the ‘45 cents over 5 years’ proposal into all final leadership bills. However, due to election year politics and intense opposition to comprehensive health care legislation, neither the House nor the Senate held floor votes on a health care package resulting in no tax increase in the 103rd Congress. The Administration is already revamping its health care proposal for reintroduction in the 104th Congress, and indications are that it will call for increased tobacco taxes to fund it’ [35].
Clinton White House documents
‘An increase of $2.00 per pack of 20 in the federal excise tax would reduce U.S. cigarette consumption by 25 to 40 percent from 500 billion to 300 to 375 billion cigarettes. As a result, U.S. tobacco production could fall as much as 30 percent. To soften the impact of the decline in U.S. tobacco production, a proposal has been made to pay quota owners to retire unneeded quotas’ [50].
‘The tobacco industry obviously feels mistreated because of the single nature of the above taxes. Other taxes have been discussed with the President and he rejected them at the time. Some of these are taxes on various alcoholic beverages and soft drinks. They are still a possibility and would definitely soften the blow to the tobacco interests’ [57].
‘I (Caren Wilcox) am continuing to work with the few elements of the large business community who remain committed to improving the bill sufficiently enough in the Senate that they believe a good bill could emerge from conference (committee). However, even these companies are expressing discouragement or concern. In addition, the small business coalition remains a constant support, but they have two issues of importance: the definition of the self employed, and the equal pricing issue for drugs sold to pharmacies’ [13].
‘Companies which offer insurance now, find it difficult to swallow a complete carve out for businesses with under 25 employees, on top of premiums already being voluntarily paid. They are concerned that this carve out will also lead to a cost shift in the system which will cause their premiums to go up’ [13].
The reforms we are considering can be categorized in three ways: (1) coverage protections for the currently insured, (2) access to insurance guarantees for all, and (3) market-based approaches to promote desirable competition among insurers. All three of these categories have been the focus of major pieces of legislation (Bentsen, Mitchell, Gephardt, Chafee, Dole, Rowland/Bilirakis, Cooper, and others) throughout the last two Congresses.
Although complex, the issues are not new. However, while most bills appear to have many of the same goals, the approaches and potential consequences vary widely.
The challenge of pursuing any insurance reform agenda is to ensure that it will be drafted and implemented correctly. If not, we risk not only unacceptably disrupting the current market and raising premiums to particularly influential constituencies, but undermining public confidence in our ability to move forward with future reforms. If we succeed in passing a strong set of reforms, we can make real and positive change to our currently quite flawed insurance market’ [13].