Monday, December 13, 2010

Be careful what you wish for, GOP & Insurance Companies (Publicus Proventus)

Ha ha! That Virginia federal judge who's all fired up about getting to strike down the health care reforms first -- so that eventually the conservative-Bush-packed Supreme Court can strike it down, too -- just issued his first ruling, announcing that the individual mandate (requiring consumers to buy insurance by 2014) is unconstitutional.

Why is that funny? Because that's the part of the law the insurance companies liked. This quote is all the way back from a June 7, 2009 article in the LA Times:

Private health insurance faces a bleak future if the proposal they champion most vigorously -- a requirement that everyone buy medical coverage -- is not adopted.

The customer base for private insurance has slipped since 2000, when soaring premiums began driving people out. The recession has accelerated the problem. But even after the economy recovers, the downward spiral is expected to continue for years as baby boomers become eligible for Medicare -- and stop buying private insurance.

Insurers do not embrace all of the healthcare restructuring proposals. But they are fighting hard for a purchase requirement, sweetened with taxpayer-funded subsidies for customers who can't afford it, and enforced with fines.

Such a so-called individual mandate amounts to a huge booster shot for health insurers, which would serve up millions of new customers almost overnight.

That view hasn't changed -- as recently as November 19, Businessweek was reporting that the insurance companies wanted to keep the individual mandate:

The industry, however, views it as the bedrock supporting the entire health reform law and is lobbying to keep it. The prospect of a vastly bigger market has helped spark a 7.4 percent rise since Jan. 1 in the Standard & Poor's 500 Managed Health Care Index of publicly traded health-care companies.

For insurers, eliminating millions of potential customers while keeping other aspects of the overhaul would be a "nuclear nightmare," says Robert Laszewski, president of Health Policy and Strategy Associates, a consulting firm that works with insurers. It would leave insurers without the extra revenue to cover higher costs from the law's ban on the denial of coverage to people with pre-existing conditions or charging sicker patients higher premiums. "It's the No. 1 lobby issue in the insurance industry right now," says Laszewski.

All those millions spent on lobbying -- insurance companies gave about $16,000,000 to the GOP for the midterm elections -- and this is how they get repaid.

The Obama Administration says it'll appeal -- and they might, unless Mitch McConnell tells them not to -- but a quicker fix is simply to tell states that if they don't require individual insurance purchases, the feds will withhold highway money. That worked to raise the drinking age and speed limits, and states already have the power to mandate that individuals buy insurance coverage. (They do it with auto insurance all the time.)

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