ObamaCare’s revolving door

Marilyn Tavenner, who spearheaded the fraught Affordable Care Act rollout for the Obama administration, is but the latest ACA insider  to cash in.  Lobbying for America’s Health Insurance Plans is a natural transition for the former director of the Centers for Medicare and Medicaid Services (CMS).

Tavenner was chosen to run CMS principally because she was not a healthcare reformer like her predecessor, Dr. Donald Berwick, a pediatrician the Senate refused to confirm.  Instead she was a colorless former apparatchik for Hospital Corporation of America (HCA), a company that once paid $1.7 billion in penalties for fraud.

{mosads}The revolving door between industry and government existed long prior to the ACA, but the commingling of industry and government interests under the ACA brings with it new implications.  Simply put, the ACA represents the biggest transfer of taxpayer resources to the private sector since Gilded Age railroad barons were beneficiaries.

Prior to his 2008 election, Obama had been sanctimonious on the subject of blurring lines between the private and public sectors.  He pledged to not directly hire industry lobbyists, although his administration busied itself with granting waivers from this executive order.

Following the ACA’s March 2010 passage, some Obama officials rushed with unseemly haste to benefit.  Joel Ario, the first head of the Office of Insurance Exchanges spearheading state exchange efforts, left in September 2011 after little over a year in his post – with no exchanges yet operational – to be managing director of Manatt Health Solutions, with clients including Aetna.  His boss, Steve Larsen, the director of the Center for Consumer Information and Insurance Oversight, left in July 2012 to serve our nation’s largest health insurer, UnitedHealth Group, as executive vice president of subsidiary OPTUM.

After advising Montana Sen. Max Baucus (D) during consideration of the ACA, Elizabeth Fowler went to work as a healthcare adviser to President Obama, where she made herself useful, according to media accounts, advising Wall Street investors hungry to know the direction ACA implementation was going.  In 2012 Fowler departed to take a job with healthcare giant Johnson & Johnson.  A year later, revealing what a massive stake they have in healthcare, the company paid a $2.2 billion fine for fraud.

Obama’s health reform director, Nancy-Ann DeParle, artfully steered the president away from standing up to healthcare cost drivers.  In August 2013 she became partner in a new private equity firm, Consonance Capital, guiding healthcare investments made more lucrative by her past decisions.  She now also sits on the board of HCA, Tavenner’s former employer.

The list goes on and on.  And one can only imagine what aspects of the ACA were compromised in turning it into a jobs fair.  For example, instead of a resume, DeParle could probably have just submitted her email exchanges with pharmaceutical lobbyists during the ACA debate – in which she assured them the president would break his vow to support drug re-importation.

Tavenner’s 2013 confirmation as CMS director was reportedly greased by turning planned 2.3 percent cuts in the Medicare Advantage program into 3.3 percent increases.  The ACA has been in place for a half-decade, and yet the federal government still has not adopted anti-discrimination rules the Act requires.  Indeed, under Tavenner one is hard-pressed to find any accommodation the insurance industry sought that wasn’t granted.  By now the revolving door spins so efficiently that upon Tavenner’s departure her replacement, Andy Slavitt, was a former (and future?) top executive with a UnitedHealth Group subsidiary.

Insurers, who long ago outgrew the state regulation their federal antitrust exemption is based upon, are combining to become even bigger, as compliant state regulators prepare to grant them huge 2016 rate increases on top of the narrow networks, high deductibles, and other contrivances they have gotten away with to date under the ACA.  As regulatory insiders continue to migrate into the health care industry what more might we expect?

Williams, an attorney and former deputy insurance commissioner, is a frequent writer on healthcare issues.