The following editorial appears on Bloomberg View:
This week's furor over the Internal Revenue Service's selective scrutiny of tea-party groups and the Justice Department's secret collection of phone records from the Associated Press has obscured what may prove in the long run to be a more troubling ethical breach.
Unable to secure funding from Congress to carry out the Affordable Care Act, Health and Human Services Secretary Kathleen Sebelius has responded with a bizarre error in judgment.
Sebelius has been soliciting donations from the health-care industry, which she oversees, to support a nonprofit organization's efforts to publicize the law's benefits and encourage enrollment of the uninsured. Her department confirmed that insurance and pharmaceutical executives were among those approached for donations.
The Affordable Care Act's online insurance exchanges are scheduled to be up and running Oct. 1. For these insurance markets to work, they must attract young and healthy customers; otherwise, they risk being overwhelmed by older, sicker patients who would cause premiums to soar. To enlist healthy subscribers, the Department of Health and Human Services is already diverting $150 million intended for new community health centers to public outreach.
With a recent poll showing four in 10 Americans unaware that the law was even enacted, and with congressional Republicans determined to undermine it, Sebelius is right to be concerned. But her troubles don't justify soliciting donations from the health-care industry. Such ties between a government agency and the industry it oversees may pose a bigger long-term threat to the law's credibility and stability than any shortage of funds.
The Affordable Care Act has already influenced the allocation of many billions in health-care spending as it gradually wrenches close to one-fifth of the U.S. economy into a new configuration. Yet the federal government's enormous power over the industry didn't end with passage of the law. The government will also determine which health plans can participate in a federally managed insurance exchange, for example. What happens if an insurance company that made a donation at Sebelius' request subsequently receives approval for an outsize rate increase?
Given the vast sums involved, it is impossible to keep political influence entirely at bay. By soliciting donations from the health-care industry, however, Sebelius is opening the door to favoritism in a technically difficult, politically delicate process. She is also making herself, the Obama administration and the Affordable Care Act itself more vulnerable to attack from those who wish to scuttle the law.
"With something as personal as health care, it's understandable that people are anxious," President Obama said. Unfortunately, his health and human services secretary has given us no reason to calm down.