Health Insurance Companies Are Praying ObamaCare Will Stand
Since ObamaCare became the law of the land, Americans have been faced with the fearful notion that, ultimately, the health care law will put health insurance companies out of business and make the federal government the “single payer” of health insurance in the United States. In addition, the president and his party, as well as the liberal media outlets, have painted health insurance companies as greedy corporate structures that are scheming to make profits, while poor Americans are running around without health insurance or dying because health insurance companies will not allow them to get the treatments they need. This is why, the president, et al say, we need the government to step in and protect victimized Americans from profit-driven health insurance companies.
So, then, with the promotion of this image of a benevolent, protective government versus the mean, greedy health insurance companies, it is interesting that some in the media are now discovering that many health insurance companies are in full support of ObamaCare.
Timothy Carney of the Washington Examiner has done an excellent job of fleshing out the true relationship between ObamaCare and health insurance companies. He writes:
Would you be surprised to hear corn farmers supporting ethanol subsidies? What if the federal government ordered the states to start subsidizing gym memberships – would you find it a “curious twist” that gyms were pushing the states to set up these subsidy programs faster?
Why are journalists so constantly surprised when the companies that stand to profit from provisions of Obama’s health-care law support the implementation of those provisions?
In a nutshell, ObamaCare is set up to subsidize health insurance companies as well as hospitals and pharmaceutical companies. And while health insurers have battled the Obama administration on a few particular details of the program, like Medical Loss Ratios, which place a ceiling on the amount of profits health insurers can make, in general health insurers were eager for both the individual mandate and employer mandates to cover employees--features that would allow them more control of all corners of the insurance market. In addition, the state health insurance exchanges would provide health insurers with government subsidies for implementation of ObamaCare.
So, aside from a few pesky details, what’s not to love about ObamaCare if you’re a health insurance company? With it, there is the promise of a long life on the government dole, with little chance of going out of business. No wonder, then, that the top health insurance lobbying group is hoping the law is not overturned. In fact, Blue Cross/Blue Shield of Massachusetts filed an amicus brief in support of the law, and reports that it played a central role in the passage of “RomneyCare,” the template for ObamaCare.
The insurer claims that it "remains firmly committed to the 2006 health care reform and the individual mandate, and believes that the closely related reforms enacted by Congress in 2010 will further advance important economic and social goals."
According to Mr. Carney, the real reason why health insurers wanted the individual mandate was not to prevent “free riders,” i.e. people without health insurance who get care at emergency rooms. Instead--and Blue Cross/Blue Shield wrote this in their amicus brief--it was primarily because insurers sought to "improve risk selection by bringing healthier people into the risk pool.” In short, the individual mandate “was intended to force healthy people to subsidize the health care of less healthy people, but with corporations, instead of the government, as the middleman.”
The challenge for health insurers was how to partner with President Obama in convincing the media and Americans that they were really enemies, struggling for control of healthcare--the private sector versus the government. Health insurers succeeded by following an Alinsky-style plan: 1) passive support for ObamaCare with no public relations efforts against the law and 2) allowing President Obama, the Democrats, and the liberal media to demonize their industry and paint them as “the bad guys,” particularly at moments when the law was under attack from Republicans. This would entail Democrats dragging out human shields who would say they were denied coverage by the “evil” insurance companies and other similar devices.
When we consider this relationship between the federal government and health insurance corporations, it should come as no surprise that America’s Health Insurance Plans (AHIP), the largest lobbying group for health insurers, is hoping that the Supreme Court will decide against “severing” the individual mandate from the law’s regulations on insurers. If the high court strikes down only the individual mandate, health insurers would still be required to cover everyone but without the funding mechanism derived from everyone being forced to purchase insurance or pay the penalty. In other words, health insurance companies would be “on their own,” with no corporate welfare coming their way.
As the Supreme Court considers its decision on ObamaCare, freedom-loving Americans and members of Congress should be ready to bring forward realistic plans to eliminate regulations that are preventing a free market for health insurance. Only a free market will encourage the development of more health insurance companies with new ideas on how to insure at competitive prices. One of these ideas is an increase in health savings accounts, which will put more healthcare buying power into the hands of consumers, who will be looking for the greatest service at the lowest price. This is an outcome both big government liberals and corporate welfare junkies are hoping won’t happen.