The health insurers may lose their anti-trust exemption. Treachery has a price.

When the health insurers’ lobby double-crossed the Administration and the Hill Dems by releasing the silly PwC report claiming that heath reform would made premiums soar, my thoughts turned at once to revenge.  I wondered whether there was some provision in the bill that could be taken out, or some provision not in the bill that could be included, to demonstrate that treachery has a price.  But I didn’t seriously believe that anything along those lines would actually happen.

It’s not yet certain that I was wrong, but it’s starting to look that way, and at a much more radical level than I could have dreamed.   Both the House and the Senate are moving to remove the industry’s anti-trust exemption.

Of course there’s no way to tell at a distance whether this is for real, or just a move to put AHIP on notice.  In either case, it’s a good start, and something to ponder for those who think that Obama’s butter-wouldn’t-melt-in-my-mouth demeanor means that he doesn’t know when and how to get mean.

Oh, and as far as I can tell getting rid of the exemption would be good policy.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com

11 thoughts on “Hardball”

  1. Good. Stick his hand up their *sses until he can wiggle his fingers out their mouths.

    Or, to be more technical, have somebody else do it, so that he can look dignified.

  2. Mark's thuggish and totalitarian instincts on display again. Say something Mark disagrees with and his immediate response is to think of some way to use law to punish you. I think this demonstrates why Democrats like Mark are dangerous to the Republic.

    What strikes me as ironic is that Mark isn't bothered at all by Obama's treachery. Obama promised the American people–he had a deal with them–that the health care negotiations would be in public. On CSpan even. And yet now he and his minions are complaining that their secret backroom deals aren't being honored.

  3. the 'punishing free speech/first they came for the insurance companies' line from some libertarians on this is one of the better jokes this month.

  4. Thomas says: "Mark's thugish and totalitarian instincts on display again." Oh please. Of course it is only Republicans who are allowed to play for keeps. Everybody else is required to play with monopoly money and put it all back in the box at the end of the day.

  5. Thomas, do you have a cite for that promise? Do you even understand the difference between the executive and legislative branches?

    Obama did make some specific promises about openness, for things within the executive branch, and I don't think he's really lived up to those promises, which I'm not happy about. But I'm not aware that the promise you describe was one he ever made, especially as he has no actual power over the openness or secrecy of Max Baucus's discussions with Chuck Grassley.

  6. Thomas: Particular industries get (and lose) special favors from the government all the time, and given the perpetual influence of lobbyists and campaign finance, the decisions about those favors usually depend on more than dispassionate policy analysis.

    If key Members of Congress had told the insurance lobby, "give lots of money to our re-election campaigns or we'll hurt you", then I'd agree with the "thuggish" label. But "gosh, you seem to be undermining our legislative agenda; let's start talking about whether this other law that benefits you is really in the public interest" is just hardball politics, and it's damn well time that the Democrats started playing hardball with someone other than their own base voters.

  7. Warren, yeah, I have a cite. On Sunday, the Washington Post published an article saying this: "Three months before he was elected president, Barack Obama vowed not only to reform health care but also to pass the legislation in an unprecedented way. 'I'm going to have all the negotiations around a big table,' he said at an appearance in Chester, Va., repeating an assertion he made many times. He said the discussions would be 'televised on C-SPAN, so that people can see who is making arguments on behalf of their constituents and who are making arguments on behalf of the drug companies or the insurance companies.'" That was the deal he made with the American people, and he hasn't kept his end of the bargain.

    This suggestion, made first by Obama and now parroted by his followers, that his promise only applied to the executive branch negotiations, and not to negotiations in Congress, isn't helpful at all. Note that that deal Obama made with the American people was that "al the negotiations" would be public, and since he referred to people making arguments on behalf of "their constituents" he obviously meant to suggest that these negotiations would include the negotiations in the legislative branch. But worse for this position is the fact that the deal Mark cites is one with the Obama administration. How is it that the insurance companies have a deal with the Obama administration if the negotiations of that deal weren't in public? The only way for it work is for Obama to have double-crossed the American people.

    Seth, your position is not Mark's. His complaint is that the insurance companies have backed out of a secret deal in which they obligated themselves to support the Democrats' position, and he wanted them punished for that, regardless of the merits. The fact that it might be good policy is simply a bonus.

  8. Thomas, what's this "secret deal" of which you speak?

    My read was that the "promise" AHIP "broke" was the representation Karen Ignani made … At the very public March press conference when everyone still was making kissy faces about reform. When she indicated AHIP's member insurance companies wanted to "work with you." Then, I certainly could be wrong, as there have been some not-so-transparent negotiations (e.g. drug manufacturer deal).

  9. I'd rather get back on thread than feed Thomas the troll.

    Mark says that getting rid of the antitrust exemption for insurers would be good policy. Insurers don't need a blanket antitrust exemption, but their business does involve a lot of information-sharing, which always raises antitrust concerns. Risks requiring insurance are, by definition, somewhat rare, and everybody's underwriting is improved with more data.

    You don't need a blanket antitrust exemption for this. But you at least need a narrow one. The courts would probably provide it, but courts only work through litigation: a nasty process. A statute or reg would be useful.

  10. Joe S:

    One of the reasons that insurance companies need an antitrust exemption for their information-sharing is that the sharing mechanism is secretive and highly proprietary. Information asymmetries and all that. If the information were more widely available, this would be helpful to researchers and the public, and might well obviate the need for an antitrust exemption.

    Also, most of the fancier, more detailed information is needed for individual rating and pre-existing-condition screening, both of which are (ostensibly) about to go the way of the dodo.

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