Why is Kevin McCarthy Blue Shield's favorite politician?

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Blue Shield of California claims to strongly support the Affordable Care Act, declaring on its website: “We pledge to do all that we can to make reform work.” When I worked there, it made a big effort to brand itself as an Obamacare champion to Democrats on Capitol Hill and in Sacramento. Yet Blue Shield’s political action committee showers campaign contributions onto the leader of the Republican crusade to repeal Obamacare—House Majority Leader Kevin McCarthy.

Blue Shield’s PAC has given more to him than to any other politician, including even Nancy Pelosi, who besides being the ACA’s most vital advocate in Congress, represents the very district in which Blue Shield is headquartered. Since 2013, Blue Shield has contributed more than twice as much to McCarthy as to Pelosi.

The company’s PAC has also favored other rabid opponents of Obamacare, such as Devin Nunes. Among the top eight recipients of Blue Shield PAC money, five have supported repeal of the law. Blue Shield has given them $143,000 compared to the $54,400 it has given the three supporters of the ACA. 

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So why is Blue Shield supporting those working to kill the law it claims to back? Based on personal knowledge, I think I can safely say that it’s not because Blue Shield is excited about their attacks on Planned Parenthood, immigrants, or the rule of law. 

But what Blue Shield does like about their policy agenda is that it includes lifting the ACA premium tax, which is a critical piece of the funding for the subsidized coverage provided by the law. The company hates the tax. Based on information I provided earlier this year to the IRS in a whistleblower filing, Blue Shield appears to have cheated on it, to the tune of $89 million. But a better long-term strategy to avoid the tax is to have it extinguished.

Blue Shield PAC favorites Devin Nunes, Mimi Walters, Jeff Denham, and David Valadao have all co-sponsored legislation to repeal the levy. And McCarthy played instrumental roles in getting the tax suspended in 2016 and 2019. One month before McCarthy engineered the continuing resolution this year that included the 2019 suspension, Blue Shield’s PAC gave his leadership campaign committee the maximum legal contribution.

So while Blue Shield isn’t eager to see Planned Parenthood defunded, immigrants deported, or Trump put above the law, it is apparently willing to give its backing to those causes in order to cut its taxes.

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