Herding the Healthcare Cats

The Obama Administration’s consensus in favor of healthcare reform, at least in the form that it’s taking in the Congress, seems to be fraying at the edges a bit. First, moderate Republicans deserted the ship one by one, leaving only Maine Senator Olympia Snowe as a possible Republican vote in the Senate. Now it’s the healthcare insurers who only a few months ago seemed to be solidly behind reform efforts:

After months of collaboration on President Obama’s attempt to overhaul the nation’s health-care system, the insurance industry plans to strike out against the effort on Monday with a report warning that the typical family premium in 2019 could cost $4,000 more than projected.

The critique, coming one day before a critical Senate committee vote on the legislation, sparked a sharp response from the Obama administration. It also signaled an end to the fragile detente between two central players in this year’s health-care reform drama.

The complete report from AHIP is here, courtesy of Ezra Klein.

Supporters of the version of reform making its way through the Congress, like Ezra, are critiquing AHIP’s report. That’s beside the point. The point is that the coalition of support that included the Congressional leadership, some Republican moderates, and the insurance companies, pharmaceutical companies, and the AMA, was conditional on certain basic elements being in whatever plan became a part of the final plan.

For insurance companies support may have been contingent on the individual mandate which promised a large, new pool of customers for the insurance companies (and no public option). The support of the AMA may have been contingent on continued forebearance on the long-promised cuts to physician compensation by Medicare. It’s hard to imagine any plan achieving cost reductions without those cuts.

That may have been the reason for the sense of urgency on enacting healthcare reform that was so evident this summer. As time passes and an actual plan emerges it has become increasingly difficult to maintain the consensus or even its illusion. One by one the former supporters are slipping away.

Until only the smile remains.

5 comments… add one
  • Brett Link

    Looks like they’ll have to fight a battle anyways. I always figured it was going to come, at some point – if they’re going to cut costs, they’ll have to fight the vested interests that are the source of much of these costs (as you mentioned, doctor’s compensation among other reasons).

  • Brett Link

    Shoot – I forgot to add-

    At least they’ve come farther than Clinton’s bill in 1994 did. That never got out of committee.

  • steve Link

    When this all started I predicted that the insurance companies would prefer the status quo and fight against any change. They already have most of the people who are healthy signed up. BTW, did you miss Rheinhardt’ series on insurance costs. Some good stuff.



  • Interesting link there steve, my answer to this part,

    The question arises how much longer these low health benefit ratios, defended by the council and by like-minded think tanks, can remain part of the American health system, especially at a time when the annual cost of health care for non-elderly Americans keeps rising apace; when unemployment is high; and when employment-based health insurance in the small-group market is steadily eroding, driving more and more Americans into the market for individual health insurance.

    Rent seeking. The insurance industry is going to get out the lobbyists and try to get as good a deal as they can.

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