Insurance Industry Gets The Blame As Healthcare Plan Falters

The insurance and drug companies, seeing the failure of the most ambitious Administration plan, have begun to pull their support of the initiative. The head of PhARMA, the drug lobby, lost his job because he bet that the original healthcare bill would be signed into law. The insurance industry has remained fairly quiet, perhaps assuming that it can pull its support for healthcare reform as it goes down in flames.

But, President Obama needs a straw man to rally support for a new healthcare reform initiative and that straw man will be the insurance industry.

Insurance companies are allegedly evil because they charge too much for their drugs which inflates healthcare costs and denies treatments to the poor and those without coverage. The industry argues that the cost of inpatient treatment and pharmaceuticals is rising and an aging population is more expensive to support medically.

Several press sources report that one of the foundation blocks of Mr. Obama’s second run at healthcare reform will be initiatives to keep health insurance costs down.  “The Democratic president will propose giving the U.S. government new power to block health insurers from attempting excessive premium hikes,” according to Reuters. The Department of Health and Human Services will act as the insurance rate watch dog.

The real drawback to the program is the same as almost any administered by the federal government whether that be stimulus packages for construction projects, new weapons programs, or mechanisms to decrease homeowner mortgage payments. Each insurance charge and each person insured is based on a different set of circumstances. It is expensive to keep many cardiac patients in hospitals. It may be inexpensive to check someone’s blood pressure. Any attempt to ferret out the exact underlying costs and consequences of treatments  is nearly impossible particularly when those treatments are merely preventative.

The Administration may have given up on providing people with affordable insurance, but it will be even harder to regulate health insurance in a world where healthcare costs are not uniform place to place and procedure to prodedure.

Douglas A. McIntyre