Thursday, October 15, 2009

The Health Insurance Industry's Risky Gambit

The Health Insurance Industry, which had seemingly been on board with the health care reform initiative as long as it believed all Americans would be mandated to buy their products in some form, has flip-flopped on the reform effort and is now mounting a furious lobbying and public relations effort to damage, if not kill, the health reform movement.

But I think the Health Insurance Industry is making a foolish mistake here. First off, even if it's the Baucus bill that ends up becoming law, a bill that reduces penalties for not buying health insurance, the net result will still be more people purchasing health insurance than ever before. Moreover, it's the Baucus bill that keeps the public option as far off the table as possible. You'd think that the health insurance industry would bend over backwards to support any bill, no matter how tepid, that keeps a government option out of the market.

Additionally, the health insurance industry must realize that most people, even many conservatives who don't support the Democratic health reform proposals, aren't big cheerleaders and fans of the health insurance industry. If there is one player in the whole health care economy that's generally reviled by a large majority of people, it's the rapacious health insurance industry. People don't like it that insurance bureaucrats can interfere with their healthcare and can meddle with the doctor/patient relationship. People don't like it that health insurance bureaucrats can seemingly deny coverage or benefits willy-nilly, at any time, on the flimsiest of pretenses, if it helps their bottom line. People don't like it that health insurance providers have posted obscene profits over recent years as the costs of basic healthcare to the average consumer become unsustainably high. In short, the health insurance industry has very little legs to stand on in leading up a high profile opposition to the health reform effort. And it probably won't matter how much of their obscene profits they spend in their lobbying efforts.

It also baffles me that the health insurance industry would mount such an effort in the midst of a political environment that has the Democrats in control of both the Congress and the White House by opposition proof margins. The natural constituency of the Democratic party are people who not only want health care reform, but probably want to punish the health insurance industry in a fit of vindictive fury.

The only chance the health insurance industry has is to completely crush the effort such that we return to the status quo that no one wants and which has only benefitted the health insurance industry's bottom line. But I seriously doubt that's gonna happen, especially with the reviled health insurance industry now leading the charge against the reform effort.


Eric said...

I think the health insurance industry is just trying to make sure they are dealt a fair hand in whatever reform package comes out. While you are caught up in your (completely justifiable)animosity against the insurance companies, it's easy to neglect to look at the situation objectively from thier side, which might go something like this: Sure, if citizens are forced at gunpoint to buy insurance, it will bring in more money for the insurance companies, but that benefit must be countered against the actuarial effects of legislation demanding insurance companies must provide full coverage for everyone who applies for insurance, regardless of their current health status. Nobody knows for sure if the insurance system can handle such a mandate, even if more people are forced to buy into the system. When we look at the Medicare system, we see similar methods (where everybody is forced to pay in, and everybody is guaranteed coverage) that are proving to be financially disastrous.

So I think it is probalby sensible for the insurance companies to be skeptical of government plans to broadly rewrite their actuarial tables for them. What I'm not sure of is what the best alternative would be. What I am sure of is the system we end up with will be worse than the system we have, because it is being designed by egalitarian idiots, who are by-and-large much worse systemic architects than profit-motivated idiots.

To me, the entire healthcare debate ignores the key problem our society (and most of the Western world) faces when it comes to dealing with this issue: population demographics.

andrew said...

Eric hit it pretty dead on.

The fact that we WANT IT NEED IT NOW OMG!!!11!1!!! is more than likely going to grant us a pretty crappy system. This kind of reform needs to be carefully crafted over years, not months.

Hey, did anyone ask your question??

If not I'll try to get a seat and ask him that the next time there's a town hall in San Antonio.

Our local news covered the meeting, apparently your fellow townsfolk asked him some pretty heated and pointed questions. I would too given the circumstance.