The double-cross

The health insurers launch a surprise attack on the bill they negotiated with Max Baucus. They must be made to pay a price.

The health insurance lobby, AHIP, having negotiated itself a fairly sweet deal over health care reform, has just launched a Pearl Harbor-style sneak attack featuring a bogus “study” by PricewaterhouseCoopers, which the last time I checked wasn’t a health-care think tank.

Not clear whether AHIP is just trying to squeeze out a slightly better deal or whether they’re going for the kill, but either way this sort of behavior has to have costs.  If I were Max Baucus or Barack Obama, I’d figure out one thing in the bill that the health insurers wanted and take it out, and something else that was omitted to placate them and put it back in.

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:

5 thoughts on “The double-cross”

  1. So current health-insurance reform is inadequate because it doesn't do enough to prevent selection bias among insurance purchasers (the healthy will still opt-out) and doesn't do enough to control the costs of healthcare and thus the premiums paid to health insurance. Anyone have any guesses as to which policy combats both of these problems? Single payer.

  2. I understand what you're trying to say and I'm with you in spirit, but if you were Max Baucus you'd bow and scrape to obsequeously do every little thing the insurance industry wanted. By definition.

  3. Seconding Warren Terra here – do you really think that Baucus got played by the Senate GOP guys he's worked with for many years, rather than working with them?

    What I think happened was that the insurance industry was playing along with Obama, and playing for time, while waiting to see how things would shake out. If Obama and the Senate Dems were running strongly, they'd go for what they could get with them. In this case, Obama has been played by key Senate Dems, and the insurance companies figured that it was time to switch sides. They now expect to get more by flat-out and openly opposing reform. Shades of 1993.

  4. I don't know who did the PWC report, but they do advertise some some sort of health research institute. Mostly actuaries, I think, which, w/ due respect to the profession, doesn't really increase my confidence in their methods.

  5. In addition to adopting the responses outlined by Mark and other commenters, we could repeal McCarran-Ferguson (sp) and directly regulate insurance companies at the federal level. I prefer a robust public plan in the exchanges to serve as a mechanism to control costs. Nonetheless, if a public plan isn't in the cards, implementing strong regulation of insurance companies might induce them to consider a public plan as a more amenable outcome.

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