Health Insurance Companies' Bait And Switch Tactics Backfiring?

The health insurance industry initially vowed to help the Obama administration’s efforts at reform but then pulled back on those efforts by coming out against the proposed legislation at the last minute. Now the Democrats seem to have taken that policy switch as further reason to try and put in place deep reforms aimed squarely at the insurance industry’s heart as payback.

House Speaker Nancy Pelosi warned insurance companies on Thursday that health-care reform could cost the industry dearly through new fees, fewer regulatory protections and fresh competition from the federal government.

The blunt admonition echoed a round of harsh statements Wednesday from senior Senate Democrats, and came in response to the insurance’s lobby’s aggressive campaign to block reform legislation from advancing. An internal industry study released earlier this week found that the Senate reform bill would cause premiums to rise sharply, but the report’s findings have been widely disputed.


Pelosi said the House may adopt a Senate provision that would assess a flat fee on insurance companies that is expected to generate about $40 billion over 10 years, as a way to pay for its reform bill. She advocated House language that would require health-insurance companies to to spend 85 cents of every dollar they collect in premiums on benefits.

And she singled out the antitrust exemption that has protected the industry since 1945, the McCarran-Ferguson Act that allows states to regulate insurance without interference from the federal government.

Now we will see if the Democrats have the votes and more importantly the so far missing backbone to go through with this in the face of the huge lobbying machine backed by big insurance. If they actually do follow through,  it couldn’t happened to a nicer industry (said as I am looking over the changes and fee increases to my 2010 health insurance policy)…

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