ALEC’s Attempts to Thwart Obamacare

Part of the Series

Moyers and Company

As part of our ongoing focus on the American Legislative Exchange Council, or ALEC, we checked in with health insurance executive turned industry whistleblower Wendell Potter to learn about ALEC’s efforts to influence the health care debate and undermine The Affordable Care Act (a.k.a. Obamacare).

Lauren Feeney: ALEC turned 40 last week. How long has the organization been involved in trying to influence the health care debate?

Wendell Potter: I don’t know whether insurance companies were part of the initial founding of the organization, but I’m sure they were involved early on. Health insurance is regulated largely at the state level, and ALEC’s strategy is to work at the state level, bringing together state legislators and industry representatives to create “model bills” for state-level legislation. Insurance companies want to try to have consistency from state to state, so they have a vested interest in trying to make sure that laws that are to their benefit in one state are passed in others as well.

Feeney: How did you first encounter ALEC?

Potter: I’ve known of the organization for as long as I was in the insurance industry, and that goes back more than 20 years. The organization works very secretively, but a few years ago I became aware that people I used to work with were playing a role in drafting some of these model bills. Someone was able to disclose what ALEC has been doing, and I was able to review a lot of the model bills. It was pretty amazing, the scope and breadth of the legislation that the organization has been working on over the years to try to preserve the status quo for health care special interests.

Feeney: ALEC has been actively involved in behind-the-scenes efforts to undermine the Affordable Care Act (also known as the ACA or “Obamacare”). The organization produced a document called The State Legislators Guide to Repealing Obamacare. Can you tell us about it?

Potter: It’s a step-by-step guide that ALEC put together to tell friendly lawmakers what they can do to try to derail the ACA. Efforts to repeal it have failed, so this is an effort to try to thwart the implementation, and it’s certainly something that lawmakers in various states have used or been inspired by.

Feeney: Have they been successful? Can you give us some examples?

Potter: One of the most far-reaching successes has been lawmakers in many states blocking the expansion of the Medicaid program, which was one of the most important aspects of the ACA, one of the chief ways covering more people. The Supreme Court ruling on the ACA allowed states to opt out of Medicaid expansion. ALEC led lawmakers to believe Medicaid expansion under the ACA would create a financial burden on the states, which is of course not true. In the initial years, the federal government will pay 100 percent of the cost of the expansion, so refusing the expansion means leaving federal dollars on the table. By insuring more people, the expansion also removes the cost of treating uninsured patients, which taxpayers currently end up paying for. Nonetheless, ALEC is largely an ideological organization and they were able to persuade a lot of lawmakers. Many states that are controlled by either a Republican governor or Republican lawmakers (or both) have said that they do not plan to expand the Medicaid program, costing untold millions of Americans benefits that they otherwise would have.

Feeney: Some of the most extreme attempts to thwart the ACA have been in Missouri.

Potter: Yes, one of the most egregious is that the state passed legislation that prohibits any state worker from doing anything to help implement the Affordable Care Act in any way. The state also passed a bill that restricts consumer groups from helping people to understand the law and to make decisions on the best insurance options for them. This pertains to the Navigator Program, part of the ACA that provides funding for identifying and training people to help advise others on their options. Missouri established very stringent licensing requirements which make it almost impossible for anyone other than an insurance agent or broker to serve as a navigator, which is of course contrary to the intent of the law. But it protects the profits and the incomes of agents and brokers, which is what is really behind it.

Feeney: A number of states have enacted (and the vast majority of states have at least introduced) ALEC-model legislation called the Freedom of Choice in Health Care Act. What’s that, and what does it mean for states where the law has been enacted?

Potter: Boy, that’s a very Orwellian title; it’s about anything but health care freedom. But they’re very savvy; they spend considerable time coming up with titles for these model laws that are anything but what the title says. Essentially what it aims to do is thwart the implementation of Obamacare and preserve the so-called free market system of health care — in other words, let the insurance companies do exactly what they have been doing, underwriting health risks in ways that make health insurance far too expensive for people who’ve been sick in the past and for people as they get older, and in many cases enabling insurance companies to refuse to sell coverage to people at any price because of preexisting conditions.

But of course, even in states that pass this law, it’s superseded by federal law.