The last time the states were rallied to rise up against federal legislation was during the civil rights battle over forced integration of schools. A similar call for organized state-level resistance is now being made in a manifesto recently published by the American Legislative Exchange Council (ALEC), a powerful but “discreet” group that counts some 2,000 conservative state legislators as well as representatives from some of the nation’s largest industries as members.
The Council’s publication, “The State Legislators Guide to Repealing ObamaCare”, urges lawmakers to “Decline to Build the ObamaCare Edifice” and offers 14 practical steps states can take to undo or impede the Affordable Care Act. These steps include having states return federal grants for setting up health insurance exchanges, encouraging them to opt completely out of Medicaid, and urging them to file federal waiver petitions to block the medical loss ratio requirement (the new rule requiring insurers to spend 80-85% of premiums on patient care).
When it comes to health care reform, ALEC is perhaps best known as the group that drafted the “Freedom of Choice in Health Care Act;” model state legislation drawn up in 2008 that would block any state or federal “public option,” bar the individual mandate and obviate other major provisions of the Affordable Care Act. According to the Council, eight states (including Virginia, Idaho, and Arizona) have actually enacted such model legislation and it has been “introduced or announced” in 42 others. The mission of ALEC’s health and human services care task force is to promote “free-market, pro-patient health care reforms at the state level.”
The stated focus of ALEC is to “advance the Jeffersonian principles of free markets, limited government, federalism, and individual liberty”—in large part by indoctrinating state legislators with their brand of governance. For example, 20 Kansas lawmakers and at least two officials from Gov. Sam Brownback’s office attended an ALEC-sponsored conference on Aug. 3 in New Orleans. Shortly afterward, Gov. Brownback announced he was returning to the federal government a $31.5 million innovator grant that was awarded to help the state create a health insurance exchange as required by the ACA. (Step 5 in “Declining to Build the ObamaCare Edifice) Texas state legislators affiliated with ALEC have proposed that the state opt out of Medicaid or turn it into a block grant program—perhaps not coincidentally, these are also two pieces of the Council’s “model” legislation.
Although ALEC bills itself as the voice of conservative state legislators, the real voice—and most of the money—comes from powerful corporate interests. ALEC’s membership lists “thousands of state legislators,” who pay token dues of $50 each that account for slightly more than 1% of the group’s funding. According to the Center on Media and Democracy, a non-profit investigative reporting group, the other 98% of ALEC's funding comes from hundreds of large corporations including Exxon Mobil, Kraft and Altria (formerly Phillip Morris); conservative foundations like Heritage and those bankrolled by Koch Industries and Peter Coors; as well as trade associations like the American Petroleum Institute, the American Rifle Association and PhRMA. Only membership dues are reported in tax filings; “gifts” from corporate members that in some cases have totaled well over $1 million in the past decade add to the group’s coffers and have only recently been unearthed by groups like CMD and the National Institute for Money in State Politics. “Those funds help subsidize legislators' trips to ALEC meetings, where they are wined, dined, and handed ‘model’ legislation to make law in their state,” writes CMD’s executive director Lisa Graves.
Corporate representatives sit on and co-chair (with Republican state legislators) “task forces” that approve “legal rules that reach into almost every area of American life: worker and consumer rights, education, the rights of Americans injured or killed by corporations, taxes, health care, immigration, and the quality of the air we breathe and the water we drink,” according to Graves. Click here to see the CMD’s full report on ALEC, details on the Council’s membership, funding and, for the first time, listings of over 800 “model bills” jointly crafted by its corporate and state legislative members.
As a veritable font of pro-industry legislation (826 bills either drafted or backed by the group were introduced in the states in 2009 and 115 were enacted into law) ALEC is deeply in the pocket of private interests. Elected officials who introduce their bills are disingenuous if they claim to be acting in the interest of their voting constituents. They are more likely to be advancing the agenda of corporate America—often to the detriment of consumers, the environment and public health.
According to the American Association for Justice (a trial lawyers group), “ALEC’s campaigns and model legislation have run the gamut of issues, but all have either protected or promoted a corporate revenue stream, often at the expense of consumers.” Initiatives have included working on behalf of oil companies to undermine the science of climate change; helping pharmaceutical companies block states from importing cheaper prescription drugs; and reducing taxes on tobacco products.
In terms of health care, Wendell Potter, a former health care executive and CMD’s Senior Fellow on Health Care, writes in The Nation, “As its archive reveals, ALEC has been at work for more than a decade on what amounts to a comprehensive wish list for insurers: from turning over the Medicare and Medicaid programs to them—assuring them a vast new stream of revenue—to letting insurers continue marketing substandard yet highly profitable policies while giving them protection from litigation.” This includes model bills that allow insurers to sell products across state lines—including “junk insurance” and very high-deductible plans—even though they may not meet the standards of state insurance commissions.
The 2011 ALEC manifesto is more of the same from this group. But thanks to the treasure trove of information now made public by the Center for Media and Democracy’s “ALEC Exposed” site, the Council’s work has been put under a brighter spotlight. ProPublica has published a “Step-by-Step Guide" for journalists to help them (and the public) understand how ALEC influences state laws—as well as a searchable database of ALEC corporate members donations and the state legislators they influence. Consumer groups and media outlets are starting to delve into this newly available data and publicize the outsized influence of ALEC’s corporate partners on state legislation.
Last month, Common Cause called for an Internal Revenue Service audit of ALEC, charging that the group “may have filed false tax returns and put its tax-exempt, charitable status at risk.” In a letter to the IRS, the government watch-dog group wrote, “it seems incontrovertible that ALEC is substantially and indeed primarily engaged in attempting to influence legislation [i.e. engaged in lobbying]… All of its efforts are geared toward developing and promoting favored state legislation. These proposals are generated in a private process where the business interests of its corporate members are highlighted, then shared only with the organization’s legislator members so they can take the proposals back to their states and introduce them as their own idea.”
Supporters of health reform and its planned roll-out in the states need to cut through the consumer-friendly façade of proposed laws that mimic ALEC’s legal models, and they need to highlight the complicit role of national corporate interests. Rather than protecting patient rights, ALEC’s recent call to state legislators to block the “ObamaCare edifice” is nothing more than a brazen attempt to protect the profits of insurance companies, pharmaceutical companies and other entrenched players whose actions have helped drive up health care spending to the crisis levels we are currently experiencing.