Arnold Schwarzenegger’s proposal to make the purchase of insurance mandatory. They saw it as representing “real opportunities for our business,” given that it would “expand the industry’s market by four million to five million currently uninsured Californians—something health plans have been unable to do despite heavily marketing new products.”43 In contrast to 1993–94, when health industry resistance had sunk the Clinton health reform initiative, by 2009 healthcare providers and insurers were open to major reforms, as long as they addressed their specific complaints. Policymakers, for their part, were keenly attuned to health industry wishes, just as they were attuned to those of other business sectors. John McDonough, the top adviser on health reform for the Senate’s Health, Education, Labor, and Pensions (HELP) Committee, recalls that prior to 2009, “business, insurers, manufacturers, [and] medical organizations were all calling for comprehensive reform.”44
Support for reform by healthcare insurers and providers stemmed partly from the desire to preempt an independent overhaul of the healthcare system—which might lead to a single-payer insurance system, strict regulations on price-gouging providers, and other policies favored by the public and long present in other high-income nations. A staggering 82 percent of the public thought the US healthcare system either needed “fundamental changes” or should be “completely” rebuilt. Very few wanted the healthcare sector to be less regulated.45 If business was “on the menu,” rather than “at the table,” the reforms might prove inimical to their interests. Industry thus took preemptive action to shape the debate over reform. In December 2008, America’s Health Insurance Plans (AHIP), the top insurers’ lobby, released a comprehensive reform proposal that specifically excluded a single-payer system and government control of healthcare prices.46
This same preemptive logic guided much of the broader corporate world, even those companies without a direct stake in the healthcare sector. Many business leaders feared that an efficient publicly-run program would increase the appeal of government-run alternatives to private capital. The Wall Street Journal reported that corporate leaders were willing to incur some added costs as a result of reform as long as it preserved “a market-oriented health-care system.” But if the reform included an expanded Medicare system and/or government price controls, then the US might reach “a tipping point where the reforms needed to preserve an innovative, market-based health system may become politically impossible.”47 Thus, the rising pressure of healthcare costs on employers, coupled with healthcare executives’ fear of something worse if they stayed on the sidelines, lay behind the diverse corporate support for reform. By 2008 business leaders across the corporate world had decided that reform was necessary, while health industry leaders had decided that reform was inevitable. Shaping that reform then became the name of the game.
And shape it they did. Since they were the “commercial interests who [would be] most affected by the proposed change,” and since their “permission” was thus necessary, Democratic leaders in Congress invited them to help design the reform. John McDonough of the Senate HELP Committee reported that Senator Ted Kennedy “directed us to bring together key system ‘stakeholders’ to see whether they could find consensus on a path to reform.” Those stakeholders included “consumers, disease advocacy, business, insurance, physician, hospital, labor, pharmaceutical, and other organizations.” Although patients constituted the vast majority of the real stakeholders, they were a clear minority among the stakeholders invited to the table; in contrast, each industry sector was invited to send its own representatives. Three decades earlier, the Carter administration had taken the same approach, which, as one critic noted, may seem like “sound democratic practice, but it is also a formula for building fortifications around the status quo.”48
The resulting “consensus” was clear before Obama entered the White House. By inauguration time, business and its representatives on the key congressional committees (Table 1) had already determined the basic framework of whatever legislation would emerge. Certain options were entirely off the table. Single-payer insurance, or “Medicare for All,” was immediately ruled out by Democratic leaders. Of the presidential candidates in the 2008 Democratic primary, all except Dennis Kucinich had committed by early 2007 to keeping private insurance intact. In 2008, the two key Senate committees involved in early drafts, Max Baucus’s Finance committee and Kennedy’s HELP committee, unequivocally rejected single payer. The Baucus-Fowler team’s white paper of November 2008 was vague on details, but its “one clear position” was its opposition to single payer. Advocates of single payer, let alone socialized medicine, were entirely excluded from even testifying before Baucus’s people.49
Table 1: The Senate Finance Committee’s ties to the healthcare sector (partial list)
| Name | Position | Ties to Health Industry | Notes |
| Max Baucus (D-MT) | Chair of Senate Finance Committee (SFC) | Received $253k in industry donations in 2007–10, plus $201k in donations from industry lobbyists in 2007–09 VP for Public Policy and External Affairs, WellPoint insurance co., 2006–08 | 3 of 5 top donors in 2007–12 were healthcare or health insurance firms Helped write healthcare reform bill passed by Senate in March 2010; later hired by Johnson & Johnson |
| Elizabeth Fowler | Top aide to Baucus, Senior Counsel to SFC, 2008–10; previously Chief Health and Entitlements Counsel for SFC, 2001–05 | ||
| Michelle Easton | Chief Health and Entitlements Counsel for SFC, 2005–08 | Former VP at PhRMA; since 2008, lobbyist representing over a dozen health firms | |
| Jeff Forbes | Chief of Staff for Baucus, 1999–2002; Staff Director for SFC, 2002–03 | Lobbyist for HCR Manor Care PAC and for lobbying firms hired by PhRMA, Merck, HCR Manor Care, and other health industry firms, 2004–present Director of Int’l Public Policy for Aetna insurance, 1998–2006; lobbyist for Pfizer, PhRMA, eHealth Inc., and other health firms | |
| Scott Parven | Chief International Trade Counsel for Baucus, 2003–06 |
SOURCES: Center for Responsive Politics (opensecrets.org); Glenn Greenwald, “The Revolving Door Spins Faster on Healthcare Reform,” salon.com, July 15, 2010; Max Fraser, “The Affordable Care Attack,” NLF 23, no. 1 (2014): 98.
Baucus and company also ruled out a robust “public option,” that is, a public insurance plan open to everyone that would compete with private insurers.50 Insurers saw a strong public option as “disturbing, as it [would create] new government-run insurance to compete with their products” and could become a wedge for a single-payer system. In addition, “hospitals, physicians, a host of other provider groups, and most business organizations adamantly opposed” it. As so often happens, those who touted the superior efficiency of private enterprise and the market opposed a public institution that could put their argument to the test. Thanks to the concerted effort by the healthcare industry and its congressional allies, popular ideas like single-payer and a strong public option were “never envisioned in congressional reform plans,” as McDonough notes.51
Corporations were mostly unified in rejecting these progressive proposals, but they did not necessarily agree on what reforms they wanted. Their interests varied by industry. For example, most industrial and commercial employers stood to gain from cost containment, but the health industry opposed limits on its ability to set prices. Conversely, the health industry wanted a mandate requiring employers to cover their employees, but the employers were wary. Within the health industry itself, insurers did not like being forced to insure sick patients,