UnitedHealth Group CEO William McGuire co-hosted a $1.4 million fundraiser on August 26, 2003, for President Bush, and has personally raised more than $100,000 for President Bush’s re-election campaign.
Recently, McGuire’s insurance company was chosen by the Bush administration to receive a contract to distribute so-called “drug discount cards” under the Medicare plan. Also tucked into the Bush Medicare plan at the last minute was a provision to expand Health Savings Accounts, which are only offered by a few companies like Golden Rule Insurance Company. UnitedHealth purchased Golden Rule for $500 million cash just days before the legislation was passed.
Is there a connection?
Few insurance corporations had as much to win or lose in Medicare debate last fall than Minnesota-based UnitedHealth, the nation’s largest insurer. That’s why it comes as no surprise that their CEO, William McGuire, co-hosted a $1.4 million fundraising event in St. Paul, Minnesota on Aug. 26, 2003, for President Bush, and earned Pioneer status for personally raising more than $100,000.
The Congressional Budget Office estimated that the Bush Medicare program would provide an additional $14.2 billion in profits for HMOs and insurance corporations for handling the prescription drug benefits. Clearly, privatizing Medicare will improve UnitedHealth’s already healthy bottom line. The company had $1.8 billion in profits in 2003, a 35 percent increase from the previous year.
In March, McGuire’s UnitedHealth was awarded a contract by the Bush administration to distribute drug discount cards to seniors. But the card doesn’t mandate savings for seniors. “Only in this administration would the words ‘discount card’ mean seniors get the card while corporations get the discounts,” commented Sen. Ted Kennedy.
The employees and Political Action Committees of UnitedHealth and companies like them that received contracts for these cards have donated almost $275,000 so far to President Bush this election.
UnitedHealth scored a lucrative acquisition on Nov. 13, 2003, precisely as the Medicare bill was being negotiated behind closed doors. Just days before the Medicare bill was released, UnitedHealth purchased Golden Rule Insurance Company for $500 million cash. Golden Rule and its executives are well-known in political and business circles as passionate advocates of Health Savings Accounts, or HSAs, which have been pursued for years by J. Patrick Rooney, the former chairman of Golden Rule Insurance Co. Rooney has directed millions to Republican candidates and causes, including $121,000 to fund Bush’s recount effort in Florida.
The HSAs had been removed from the Medicare bill early on, but emerged in the final package.
“But while insurers could only guess and gamble on the outcome in Congress, [UnitedHealth and Golden Rule] were ready to seize the opportunity,” reported the New York Times. The inclusion of HSAs even surprised some long-time advocates. “People thought it would be gone at the end,” said John C. Goodman, president of the National Center for Policy Analysis, a research group that promotes HSAs. “Frankly even I thought that was going to happen.”
The projected expense of HSAs is approximately $6.4 billion in taxes drained from the U.S. Treasury.
UnitedHealth’s stock price soared on the passage of the Medicare bill, in part, analysts said, due to purchase of Golden Rule and the Medicare provisions on HSAs. (It is now trading at above $63 per share, above its approximate $50 per share level in mid-November, an increase of more than 20 percent.) Golden Rule, now a division of UnitedHealth, announced its new HSA products in January as soon as the Medicare provisions had been implemented, even though the Treasury Department has not yet drafted regulations.
“We know this market exceptionally well, we pioneered it,” crowed Brian McManus, Golden Rule’s lobbyist.
‘Pioneered’ it, is right, if you mean raising $100,000 for the Bush campaign and reaping a tremendous return on that investment.
David Donnelly is director of Campaign Money Watch. Reprinted with permission from Special Interest Spotlight, campaignmoney.org/spotlight.