The Wall Street Journal notes that even as Obamacare posed great threats to the independence and profitability of health insurers, they were willing to play along with an effort they thought inevitable as long as they could get the government to force more people to buy their product and dodge the poison pill of the public option:
A year ago, the industry’s main trade group, America’s Health Insurance Plans, decided to try to get out in front of the overhaul effort. Insurers agreed to renounce some of their most controversial practices — such as denying coverage to applicants with pre-existing health conditions — hoping to gain millions of new customers through mandated coverage.
It’s a time-tested strategy by Big Business in making deals with Big Government: hope you can cut a deal that puts the real hardships on consumers and small competitors, and avoid the worst for yourself. But of course, once you have traded your freedom for crumbs from the government table, you lose control over the process. And the Journal notes that insurers are starting to have some second thoughts about the deal:
Big insurers are still hoping to influence some language in the legislation before Congress sends it to the president. But one thing is clear: The initiative is poised to change their industry more than any other sector of the U.S. health-care system, with huge potential to disrupt profitability.
Cuts in government spending for Medicare Advantage, the privately run health plans for the elderly, are a major source of funding for the overhaul. And an excise tax on most insurers is set to cost the industry $70 billion over 10 years.
“We will be taking a fundamental look at our business, our business model and how we invest our capital,” Ron Williams, Aetna Inc.’s chief executive, said this week.
Maybe they should have thought of that sooner.
4 thoughts on “Health Insurers Have Second Thoughts About Riding The Tiger”
Don’t worry Crank if it passes-it will be more affordable, the waits will not increase, efficiency will get better as the govt gets more involved the quantity and quality of the care will not suffer and it will save money. I know all this because the Left says this will happen and they have never been wrong about the costs, benefits or efficiency of any social spending ever.
Just like those who embrace the short term savings from settling bogus lawsuits because the payoffs are smaller than the litigation costs. Until the avalanche of bogus claims arrives.
Standing up for what’s honest and what’s best for your customers and your nation is a much better long term business policy than sacrificing your integrity and your country for short term hopes of profit.
[Sacrificing your customers to the socialist monster in hopes that the beast won’t eat you has such a good historical record for success.]
Yeah, dch, our healthcare will be swell because Our Fearless Leader has waved his imperial scepter and promised so.
I mean, shucks, Our Fearless Leader wouldn’t lie to us, would he? He said he was going to be different from all the rest of those lying bastards. Hey, Fearless Leader pinky-promised to give everybody a free pony in his first term. And that’s good enough for me!
I know my pony (I’m going to call him “Hopenchange”) should arrive at my doorstep any day now by way of our infallible Postal Service. I can just feel it! Can you?
I have read elsewhere (wsj: Richard Epstein: Harry Reid turns insurance into a public utility) that it is probable that the insurance companies will be systematically squeezed into bankruptcy under Obamacare. If that were to be the likely scenario, why wouldn’t the health insurance companies cancel their policies, layoff the help and liquidate the companies before Obamacare goes into effect? Wouldn’t that be in the best interests of the shareholders if the alternative is slow strangulation and bankruptcy? At least it would be fun to watch the insurance companies make the liquidation threat.
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