Wednesday, August 12, 2009

Demonizing insurance companies

President Obama and Congress changed their strategy in the last several days. They no longer campaign for health care reform, it is now health insurance reform. (Sidebar: Obama rightfully rails at the out of control cost of Medicare and Medicaid as threats to the national economy, but sees as his priority, reforming the private health insurance market. Strange logic.)

Health insurance policies are contracts. Contracts are supposed to be enforced by governments.

Health insurance policies are, to my understanding, filed with and approved by government agencies.

Health insurance policies are subject to the political gamesmanship of state legislatures and are, therefore, politically-negotiated and approved contracts.

Health insurance companies must collect enough premium to pay the bills of those with whom it contracts (people who own the insurance policies) and the physicians, hospitals, and other providers whose services are used by those people who own insurance contracts. If they do not collect enough premium, they will go out of business. Yes, they must also cover their administrative expenses, but only at levels allowed by the laws passed by elected officials.

Health insurance is held hostage to some extent by economic forces, of course, but within the constraints allowed by the political process (in the case of health insurance, usually driven by ideological populism and the cancerous desire to be re-elected rather than pass good laws).

Since health insurance is, by this logic, already controlled by the political process, and since our tax dollars already support in part or whole, health care services for 103 million people, plus government employees, why has Obama and Congress made the insurance companies public enemy number one? I believe they should admit they have met the enemy, and the enemy stares them in the face each morning.

A health care system driven by politics, rather than economics and individual moral responsibility, will always need demons – and the insurance companies are catching it.

Governments should establish the basis of an enforceable contract, and then enforce them, not demonize them.

No comments: