This article originally appeared on AlterNet
Obama has become the health insurance industry’s top salesperson.
Yesterday, in Massachusetts, he urged Americans to take a long view on
implementing Obamacare. While it may provide coverage to millions who
now lack it, the evidence is mounting that Obama never should have
trusted the private health insurance industry to begin with. Let us
count the ways.
1. Obamacare was written by the industry for the GOP.
The template for the Affordable Care Act was the Heritage Foundation’s 1992 report
expanding the health insurance marketplace. Their plan had tax credits,
while Obamacare has income-based subsidies paid directly to insurers to
make it affordable to the poor, working class and middle class. As
former Secretary of Labor Robert Reich points out
this was the Republican’s and insurance industry’s plan, not the
Democrats, who wanted to expand existing government programs. Its
reliance on the private sector was flawed from the start and is at the
core of its current troubles.
2. Obamacare did not have meaningful price controls.
though the law passed in 2010, most of Obamacare was not slated to take
effect until January 2014. That gave insurers several years to ratchet
up premiums—with 18 percent to 25 percent annual jumps
states like California where insurance premiums are unregulated. While
the law limits the percent of administrative costs that are part of
premiums and that took
in 2012, it does not regulate overall costs. Does anybody think
insurers were not going to lock in profits and gouge the public when
3. All insurers didn’t have to cooperate—and didn’t.
every health insurance company decided to participate in the ACA, which
left many small states with very few options for uninsured residents.
That means Obamacare is not offering a range of plans, in which
competition is supposed to lower costs, in states like Maine
and New Hampshire
. That’s left state legislatorswondering
they will have to create interstate compacts with neighbors to create
coverage pools to attract private insurers to give residents more
choices. Again, insurers did what was best for their bottom lines, not
for the public health.
4. Is anyone surprised policies now are canceled?
Nobody should be surprised at the latest outrage from the industry, which iscanceling
of thousands of individuals’ policies, making the president eat his
words that anyone can keep coverage they like. Obama ought to have known
better. But as Secretary of Health and Human Services Kathleen Sebelius
told Congress Wednesday, insurers are canceling policies or offering
higher-priced substitutes because the old policies don’t meet the law’s
minimum coverage requirements.
People might be angry that their
policy is being canceled or might cost more if they can’t get a federal
subsidy, but they would feel a lot worse if they were hospitalized and
faced thousands in unexpected bills and hounding by debt collectors.
Who’s more at fault here, Obama for being played like a card, or
insurers for selling bad policies in the first place?
5. And now Republicans prefer a public option?
a lot more to be seen in the Obamacare drama before the nation’s new
healthcare regimen emerges. But for now, a final—and perverse—reason why
the health insurance industry shouldn’t have been trusted in the first
place goes beyond the previous four.
Republicans whose states are taking federal money to expand coverage for
the poor though state-run Medicaid are predicting that the market
reforms won’t work. Ohio Gov. John Kasich wants the law’s public portion
to work, theNew York Times reported
week, but predicted the private insurance requiremens won’t. “It’s
going to throw people out of work and not control costs,” he said.
beyond ironic, as it reminds everyone that the best approach to
healthcare reform is what Democrats and progressives have called for all
along—a so-called public option via expanding existing government-run
programs such as Medicaid and Medicare.
“Had Democrats stuck to
the original Democratic vision and built comprehensive health insurance
on Social Security and Medicare, it would have been cheaper, simpler,
and more widely accepted by the public,” wrote
Reich. “And Republicans would be hollering anyway.”
Obama and the Democrats trusted the private insurance industry, thought
it would do its part, and not keep stabbing them—and policyholders—in
the back. That doesn’t mean the ACA doesn’t have positive features, as
Obama keeps saying
speeches, but with the President as a punching bag the industry can
keep doing what it has always done: put its profits first.
Is anyone really surprised?
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