(Bloomberg Politics) — Conventional wisdom says big corporations that employ lots of people in a state generally call the shots with local politicians, especially when those corporations are the source of major campaign contributions.
But that’s not the case in Tennessee. At least when it comes to the Patient Protection and Affordable Care Act (PPACA).
Tennessee is looming as ground zero for the political fallout from the Supreme Court’s decision on King v. Burwell, which could come as early as Thursday, on the insurance subsidies at the heart of President Barack Obama’s health care law. Some of the nation’s biggest hospital chains are based in the Volunteer State and stand to lose hundreds of millions of dollars if the justices invalidate the subsidies. Yet they haven’t been able to make the state’s Republicans budge off their stance against the health care law.
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Led by Sens. Lamar Alexander and Bob Corker, Republican members of the state’s congressional delegation have remained steadfastly against PPACA despite receiving campaign donations from executives at hospitals, some of their state’s biggest employers.
Hospitals nationwide are going to be in some trouble should the Supreme Court rule against health-insurance subsidies for more than 6 million people—including about 156,000 in Tennessee—that are at the heart of the law.
The biggest for-profit hospitals have about 2 percent to 5 percent of their earnings at risk if the subsidies go away, according to an analysis by Bloomberg Intelligence. That could amount to hundreds of millions of dollars in lost profits for large hospital companies.
Tennessee, where HCA Holdings Inc. (NYSE:HCA) and Community Health Systems Inc. (NYSE:CYH) are among the largest employers, is one of the most glaring examples of the situation playing out across the country, with health care executives growing more frustrated with their inability to get lawmakers to listen.
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“Any kind of thing to do with so-called Obamacare, they’re opposed to,” Wayne Smith, chief executive officer of Franklin, Tenn.-based Community Health Systems, said of lawmakers across the country at an investor conference in June. “It doesn’t matter if it’s rational or not, if it’s good for the state, it doesn’t matter anyway. That’s the biggest hurdle I see.”
All told, employees of Community Health Systems have given at least $178,000 to members of their congressional delegation, according to figures compiled by the non-partisan Center for Responsive Politics and made available by the Sunlight Foundation. Of the more than $47,000 given by Smith, the vast majority — $41,650 — went to Tennessee Republicans including Alexander and Corker and Reps. Marsha Blackburn, and Diane Black who are opposed to PPACA. Smith, who has also backed Jim Cooper, one of the state’s two Democratic representatives, wasn’t available for an interview.
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Alexander’s press office said he hasn’t been influenced in any way by the hospital executives of his state.