Health insurers’ ‘stupid blunder’

The health insurance industry may have cut its own throat yesterday with its last-minute claim — the day before a crucial Senate committee vote — that health care reform would “force” them to double the cost of premiums. The timing of the announcement, and revelations that the insurers’ claim is based on a study by a group with a history of creating bogus reports for corporate customers, has both ticked off members of the Senate Finance Committee (which votes on a health care reform bill today), and energized reform supporters. Read about the study in a story by the Washington Post’s Ezra Klein.

In Congress and the White House, reaction to the insurers’ claims has been along the lines of that offered by a senior Senate Democratic aide who called the move “an incredibly stupid strategic blunder.” In other words, the insurers’ promise of higher premiums practically gives the green light to a public option that would offer consumers more competitive rates. At the very least, a cap on premiums is probably now in the works.

The bottom line: the only reason premiums would have to be increased is to guarantee health insurance companies a profit margin as high as they’ve enjoyed during the past few years. As supporters of a public option have said, if the insurers can’t offer the same coverage as the government for the same price, then what does that say about the insurance companies? The answer, of course, is that it reveals those companies for what they are: predators who make fortunes off Americans’ bad fortune. It’s an immoral business, period. And it’s certainly one that can’t be trusted to have our best interests in mind. We’ve quoted her before, put this is the perfect time to remember author Barbara Ehrenreich’s view of health insurers: “What country in its right mind would pay millions of people to deny other people health care?” Think about it.

This article appears in Oct 13-20, 2009.