Republicans Defend Big Tobacco From Sick Children

By Marie Cocco

WASHINGTON—In keeping with Oscar Wilde’s adage that one cannot be too careful in the choice of enemies, congressional Democrats have chosen wisely and well.

Are there two industries in America toward which the public has more animosity than tobacco and managed-care health insurance? They make money either by making people sick (tobacco) or by limiting treatment for those who already are (managed care).

The logic of raising tobacco taxes and curtailing well-documented overpayments to managed-care companies that cover some Medicare patients, then using the funds to provide insurance to children in poor and working-class families, is better than politically perfect. It boosts public health by reducing smoking. It spares taxpayers billions now wasted on propping up corporate insurers rather than treating Medicare patients.

Which is, perhaps, one reason President Bush and Republican leaders in Congress are opposing with increasing stridency what started out as a bipartisan no-brainer: An expansion of coverage under the State Children’s Health Insurance Program that was long envisioned to be part of the reauthorization of the program this summer.

Bush began the ideological war against the children’s insurance program—which was crafted in part by Newt Gingrich and passed in the 1990s with broad bipartisan support—a few weeks ago. The president declared SCHIP to be a scary step toward “a federalization of healthcare” that would lead to “worse medicine.” In fact, states—not the federal government—run the children’s insurance program and typically contract for care with private managed-care insurers. These are the very same private insurers on whom Republicans lavished billions in taxpayer subsidies when they wrote the Medicare drug legislation and sundry other schemes to give the insurers more Medicare business generally.

But put aside, for a moment, this breathtaking inconsistency. Because that isn’t the whole story.

Just as it is hard to find two industries that have put profits ahead of the public welfare more consistently than Big Tobacco and Big Insurance, it would be difficult to find more loyal Republican campaign contributors. Though tobacco companies now give far less to congressional candidates than they have in years past, the industry still donated about $3.5 million in 2006—with 73 percent of it going to Republicans, according to the Center for Responsive Politics, which tracks contributions to federal campaigns. Likewise, 60 percent of the $7.6 million in contributions from health services companies and health maintenance organizations went to Republicans in 2006. 

With friends like these, why worry about a few million kids who don’t have insurance?

What started out as the president’s ideological bomb-throwing has escalated with the usual Republican complaints about taxes and the alleged Democratic assault on “free-market Medicare plans.” House Republican leader John Boehner accused Democrats of “hiking taxes on working families,” though the only families affected would be those that include smokers.

The House bill on children’s insurance would finance the increase in coverage in part with a 45-cents-a-pack hike in the current federal cigarette tax. In the Senate measure, the tobacco tax would be increased by 61 cents a pack. Confiscatory? No, healthy.

In May, the Institute of Medicine said that “increasing taxes on cigarettes is one of the most effective ways to decrease smoking, particularly among adolescents.” The institute recommended that Congress increase the tax on a pack of cigarettes “by at least $1 a pack, and index the tax to inflation.” Hiking cigarette taxes not only would help cover kids without insurance. By reducing smoking, it would also make other kids—and adults, for that matter—healthier. And it would save taxpayers billions in future Medicaid and Medicare expenses to treat smoking-related diseases.

As for reducing excessive payments to private Medicare managed-care plans—proposed by the House, but not the Senate—that, too, is better than shoveling billions into the coffers of the private insurance industry. Since the start of managed care in Medicare, proponents have argued that private plans would reduce costs. But the opposite has proved true. According to both government and private studies, Medicare managed care now costs taxpayers about 12 percent more per patient than it would to treat the very same patient through traditional, government-administered Medicare. Managed care in Medicare is no “free market,” as Boehner contends. It’s a free lunch.

And it also happens to be just the sort of donor indulgence voters sought to stop when they put the Democrats in charge. 

Marie Cocco’s e-mail address is mariecocco(at)washpost.com.

© 2007, Washington Post Writers Group