Insurers Spin Court Decision on Health Insurance Mandate

When I testified before Congress last year, I told lawmakers that if they passed a health care reform bill with an individual mandate but no public option, they might as well call their bill the "Health Insurance Profit Protection and Enhancement Act." Well, of course, that is exactly what Congress did, but they didn't change the name of the new law as I suggested. I was as upset as anyone that the public option was stripped out, but I nevertheless later said that Congress should still pass the bill because of the protections it contained against common predatory practices by insurers, like canceling breast cancer patients' insurance in the midst of treatment and refusing to sell coverage at any price to people with pre-existing conditions. The bill also expands Medicaid to encompass several million Americans who cannot afford to buy overpriced and often inadequate health insurance.

I have no doubt the insurance executives I used to work with were doing high fives when the public option bit the dust, and their favorite part of the bill -- the mandate that will require us to buy their insurance products if we're not eligible for an existing public plan like Medicare, Medicaid or the VA program -- became the law of the land.

After the ruling by the judge in Virginia that the mandate to purchase health insurance is unconstitutional, however, I'm sure my old buddies who are still in the industry are downright apoplectic. As I noted in my essay in Newsweek last month, the insurers, and the Republicans they helped to elect to Congress, have a real dilemma on their hands. The Republicans led voters to believe that the new health reform law represents a "government takeover" of our health care system (it certainly does not, not by a long shot) and promised to "repeal and replace it." Several politically-ambitious GOP attorneys general (and one Democrat) filed lawsuits challenging the constitutionally of the individual mandate so prized by the insurers. Now that the Virginia judge has sided with those AGs and other plaintiffs, the insurance industry flacks (like I used to be) are now spinning in overdrive.

Check out the Bloomberg story about the judge's decision. The headline alone says it all: "Lack of Health Mandate Would Lead to Skyrocketing Costs, Insurers Say." Read it if you're interested in seeing how the insurers are spinning this story, and how they will continue to spin it until Congress and the Republican-appointed judges drop their charade of dismantling the new law. What they really want to accomplish, and what consumer advocates need to keep an eye on, is having Congress figure out how to strip out the new regulations and consumer protections in the law. That's what they don't like. Why? Because Wall Street doesn't like them. Investors are afraid that if insurers have to play fair for a change, they won't make as much money. They have enjoyed skyrocketing profits lately, especially this year. The prospect that a reform law would include decent consumer protections but no individual mandate scares the bejesus out of them. Hence, the spin that we are in for skyrocketing health care costs if the Virginia judge's decision is upheld.

The thing to keep in mind is that, despite the headlines and hype, this is just one judge's opinion. Others have gone the other way. We are a long way from knowing if, and how, the new health reform act will ultimately be implemented.

Watch this space.