Healthcare Reform Makes for Strange Bedfellows

Health insurance industry officials sat down with the Obama administration earlier this year to partake in healthcare reform probably heeding the old adage: “if you’re not at the table, you’re on the menu.” The naivete exhibited by the insurance industry CEO’s is almost forgivable – or was it fear in the face of bank and auto industry nationalization? Surely it was an attempt to secure a seat at the table of reform, repair their battered images and secure a future for their business models. Instead, what they should have remembered is the apocryphal quote, “he who appeases the crocodile is (merely) eaten last.” As the Baucus monstrosity makes it way through the distorting prisms of committees and compromises, many in the health insurance industry are just now realizing they may be joining polar bears on the endangered species list.

Blue Cross Blue Shield released a study done by Oliver Wyman, Inc, earlier this week challenging the assertions by congressional leaders regarding the effects of current healthcare reform legislation on health insurance premiums. The study predicts, as I have previously written in this column, that premiums will sky-rocket. In fact, another study predicts that premiums may go high enough that citizens would likely rather pay a fine than pay for higher premiums. The White House initially shrugged off these studies as flawed and industry-sponsored, but clearly they perceived a threat. In his latest weekly radio address, Obama fired a warning shot, threatening further regulatory oversight if the industry doesn’t “toe the line.” Obama and Baucus realize these studies threaten to undermine the fragile momentum gained from Olympia Snowe’s (“R”-Maine) recent thumbs-up, which is why the massive bill is being debated mostly behind closed doors.

Defying logic and shareholder interests, some health insurance companies still support Obama’s reform. It appears the health insurance industry has been successfully divided and soon will be conquered. Lost in the headlong rush for government control of healthcare is all the commonsense solutions for healthcare reform involving a truly free market for healthcare. In the end, passing healthcare reform (with or without the Senate’s use of the “nuclear option”) may prove to be the easiest part of healthcare reform. Making it truly work for the average American, who already enjoys the best healthcare in the world, will prove to be a much more elusive victory. Which reminds me of another old saying: “careful what you wish for, you might just get it.”