Leader's Edge logo Under the Dome by Joel Wood Tell the Editor
Under the Dome by Joel Wood Yo’ Mama

And you thought the economy would receive the mother lode of Congressional angst. Just wait: Health insurance reform is shaping up to be the mother of all political battles in 2009.

By  Joel Wood

Just because you’re paranoid doesn’t mean they’re not out to get you.

Throughout the presidential campaign, Barack Obama pledged to build upon, not undermine, the employer-provided group health insurance marketplace. Here is the opening line on health insurance reform at BarackObama.com: “The Obama-Biden plan provides affordable, accessible health care for all Americans, builds on the existing healthcare system, and uses existing providers, doctors and plans to implement the plan.” Sounds good to me, especially the ensuing promises that his reforms will save American families $2,500 a year in health insurance premiums.

Many have speculated that health reform would have to take a back seat to the financial crisis. Even the most conservative economists anticipate hundreds of billions of dollars in new spending to achieve the Obama goals of near-universal health coverage with a high floor of benefits. To achieve this all in 2009 seemed unrealistic.

But in mid-December, Obama pledged decisive action in 2009, saying: “Some may ask how, at this moment of economic challenge, we can afford to invest in reforming our healthcare system. Well, I ask a different question. I ask how we can afford not to. …If we want to overcome our economic challenges, we must also finally address our healthcare challenge.”

And this month, the new administration and congressional leaders will propose the most ambitious health insurance reforms since the failed effort of 1994. Democratic staffers tell me the inherent conflicts and complexities of healthcare issues make them want to move with extreme force in the early days of Congress, while Republicans are still feeling their way along in the minority and biding their time until the president’s honeymoon seems over.

Learning from the 1994 experience, candidate Obama never fell into the trap of identifying sacrifices or tradeoffs involved in a massive reorganization of healthcare. My paranoia is fueled by the public posture of others.

Consider, for example, these comments:

Richard Kirsch, national campaign manager of reform advocacy group Health Care for America Now, quoted in The New York Times: “Public plans like Medicare do a better job of controlling costs. Private insurers are always looking for ways to avoid paying claims or covering sick people. Their mission is not to provide health care, but to increase shareholders’ profits.”

Ezekiel Emanuel, oncologist and brother of incoming White House Chief of Staff Rahm Emanuel, in an op-ed in The Wall Street Journal: “For too many, the employer-based system is inefficient. Each employer purchases health insurance separately. According to a recent estimate by the McKinsey Global Institute, this adds more than $75 billion in underwriting, marketing, sales, billing and other administrative costs that offer no health benefits. More than half of all American employers who offer health-care benefits don’t offer their employees a choice. Consequently, most Americans don’t have the option of giving their business to insurance companies that treat them well and only cover what they need. This prevents the usual market forces from holding down costs.”

As healthcare costs have continued to spiral upward, the pressures for reform are greater than ever. But it is insanity, particularly in this dismal fiscal environment, to pretend that there aren’t massive tradeoffs in healthcare policy. The central feature of the Obama campaign health plan has been the “insurance exchange” idea, wherein consumers will be offered a standardized array of private insurance plans and a new public insurance program to compete directly with private insurers. A public program would have inherent unfair advantages that could potentially undermine the employer-provided group health insurance marketplace.

If experience is any barometer in the field of government health insurance intervention, people who already have private insurance will be paying for those in the public programs. A public program, just like Medicare and Medicaid, would underpay doctors and hospitals. Private health providers will charge more to consumers and employers who buy commercial insurance. This cost-shifting policy will spiral and create more and more pressure for an ultimate government takeover of health insurance.

That may be exactly what a number of congressional leaders want. There are four key congressional chairmen in charge of the nitty-gritty debates over health insurance. Two of them—Henry Waxman of the House Energy and Commerce Committee and Ted Kennedy of the Senate Health, Education, Labor and Pensions Committee—have long yearned for single-payer government health insurance.

Because brokers aren’t delivering healthcare directly, we will inevitably be targeted as low-hanging fruit. Hillary Clinton’s 1994 plan was straightforward in its assault on private group health insurance intermediaries. Famously, she told a health insurance agent at an open forum: “You seem to be a very bright person; I’m sure you’ll find something else to do.”

We must be prepared to defend and assert the value that we bring to clients in negotiating the best possible health insurance coverage for tens of millions of Americans who like their health insurance and don’t want to lose it—especially not to be junked into a government-rationed system. It is shaping up to be the mother of all political battles in 2009.

Wood is The Council’s senior vp of Government Affairs.
Send Email

Email PagePrint PageArticle reprintsArticle tools sponsored by

Full Leader's Edge Archive. Previously published articles, listed by subject below.

arrow Industry Leaders    arrow Wholesalers    arrow Legal Issues   arrow Regulatory Issues  
arrow International Risk arrow Management    arrow Industry News    arrow Regulatory News
arrow Market News   arrow Cartoons