Kill the private health insurance industry before it kills you

The private health insurance industry needs to be killed. And the weapon of its demise is obvious: Medicare for all.

Before ObamaCare, the fact that private markets are horribly ill-suited to deliver health insurance was obvious. Unlike home or car insurance, very sick people can virtually never afford to pay the premiums necessary to cover their care. Back then, one of dozens of pre-existing conditions and a lapse in coverage meant you were virtually un-insurable. (For example, if you were pregnant and wanted insurance on the private market, you'd have to get an abortion first.)

Even when insured people got sick, insurers would often fight tooth and nail to avoid paying, or even attempt "rescission" — the practice where, when someone gets severely ill, you cook up a bogus excuse to kick them off their coverage.

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ObamaCare, of course, was good to the private insurance industry. One of the first things Democrats did was pre-emptively buy the industry off (along with all other interested parties). Indeed, the whole point of the signature ObamaCare exchanges is to create a functioning marketplace where individuals could buy private insurance that actually allowed access to care — part of which was a mandate and subsidies to buy insurance, and another part of which was massive subsidies direct to the insurers.

One might think that TrumpCare, which is all but guaranteed to dynamite the exchange structure, would thus be opposed by the insurance industry. But while they generally don't like it, they're barely lifting a finger to stop it — for utterly obscene reasons.

When President Clinton tried and failed to pass health-care reform in the '90s, the health insurance industry mobilized furiously to stop the bill, lobbying like mad and running ads with a lot of scaremongering lies about what the bill would do. The industry's tepid campaign against TrumpCare is nothing remotely close to that effort. The major health insurance lobby (America's Health Insurance Plans, or AHIP) is even run by President Obama's former head of the Centers for Medicare and Medicaid Services, and the best it can muster is this:

With a Senate vote scheduled for this week, time is running out to stop this monstrosity.

So why is Big Insurance sitting on its hands? Dylan Scott reports that furiously opposing the bill might jeopardize big juicy corporate tax cuts coming down the pike, after Republicans are done consigning tens of thousands of sick people to an early death. The Senate bill even contains a provision reversing an ObamaCare tax on insurance company CEO pay over $500,000 (one of many stipulations to push spending towards care instead of administrative bloat) — effectively granting that tiny group a large tax cut specific to them.

Hey, TrumpCare might throw over 20 million people off their health insurance — but at least it will make the insurance company CEO class even more obscenely wealthy!

Bill Clinton's experience convinced Democrats that they couldn't risk offending the health-care industry when attempting reform. But Barack Obama's effort to buy them off clearly didn't work either. ObamaCare and Medicaid are the most politically vulnerable parts of the health-care system. The former is vulnerable precisely because it has so many compromises and handouts for private insurance. But the moment Republicans took power, they immediately plotted to destroy those weak points, with the savings shoveled into the pockets of the rich.

The private insurance industry will do little if anything to stop them. No amount of bribery can possibly convince these companies to care about poor people's lives.

The repeal of many key ObamaCare regulations also means we're about to be clubbed over the head again with private health insurance market failures. Regulations protecting people with pre-existing conditions, mandating that insurance has to actually cover needed care, and setting out-of-pocket caps and lifetime limits will be killed in many states under TrumpCare. As a result, rescission would almost certainly come back too.

If Democrats actually care about universal coverage, the next time they take power they must jam through the most politically strong possible policy, and in the process remove the political threat of the health insurance industry forever. Medicare for all fits the bill on both counts — in addition to achieving actually universal coverage at a stroke, something ObamaCare would never do.

Now, it's very important to note that this argument does not apply to the actual employees of the insurance industry, the vast majority of whom are just trying to get by like any other working stiff. A Medicare-for-all plan will of necessity have some re-employment policy to scoop up the former insurance industry employees — partly by placing all the new Medicare facilities in former private industry strongholds, and partly with job placement and re-training. (Perhaps some rump insurance companies could also be reconfigured as contractors to help administer the new system.) That way everyone but insurance company investors and executives will either come out massively ahead, or at least not be harmed.

But make no mistake: The private health insurance industry is and always will be an obstacle to universal care. It must be permanently removed.