Monopoly Money
by digby
Just shoot me. American politics are so inane right now that I can hardly stand it:
Sen. Chuck Grassley (Iowa), a Republican member of the Finance Committee who was part of negotiations that produced the pending healthcare bill, said that insurance companies are supportive of the legislation as it stands.
He said the insurance industry would accept legislation prohibiting it from discriminating against customers because of pre-existing medical conditions in exchange for a government mandate that requires tens of millions of Americans to sign up for coverage.
Really? They will agree to stop discriminating against sick people who don't have insurance (who, by the way, will be forced to buy expensive insurance from them) in return for 40 million or so new customers? Wow, that's really big of them.
That idiotic statement was in this story from The Hill which says that Harry Reid is holding back a new provision that's floating around, which would repeal the health care industry's anti-trust exemption. (Can you believe they have an anti-trust exemption?) The Republicans are claiming he's using it as some kind of intimidation threat against the insurance companies in the negotiations although I'm unclear what it is he's trying to extract from them in return.
In any case, it's quite clear that the insurance companies all operate like cartels, quite obviously fixing prices and running out competition. (Even Trent Lott was for lifting their exemption in the past.) It's one of the reasons why the public option is needed. If Reid is holding that over their heads to get the PO in the legislation, then I'll go and volunteer for his reelection. Let's just say I'm skeptical.
Vanity Fair has a great article today about the outrageous compensation schemes in the medical industry. We've written about the insurance company CEO's a lot on this blog, but this article takes a broader look at the health industry as a whole:
With median annual compensation of more than $12.4 million, C.E.O.’s at the big health-care companies make two-thirds more than their counterparts in finance and are the highest paid of any industry. The health-care industry’s total annual profit has grown to an estimated $200 billion, and it doled out nearly $170 million in campaign contributions in 2007 and 2008. It now spends more than any other industry lobbying the federal government—$3.5 billion over the past decade and a record $263 million in the first six months of this year. That’s six lobbyists and nearly half a million dollars for each member of Congress. It’s been a good year on K Street, too.
It should come as no surprise, then, that we spend 17 percent of our G.D.P. and more than $7,500 per American per year on health care. That’s 50% more than any other industrialized nation. Meanwhile, the quality of care we get in return has fallen to embarrassing lows. According to the World Health Organization, our health-care system ranks 37th in overall quality and fairness, placing us between Costa Rica and Slovenia. We rank 41st in infant-mortality rates, alongside Slovakia and Serbia, and dead last among 19 leading industrialized countries in preventable deaths. Nearly two-thirds of personal bankruptcies in the U.S. are caused by illness, yet more than three-quarters of those people actually had health insurance when they fell ill. In other words, we’re all getting ripped off.
Evidently, the answer to this problem is to mandate that more Americans pay into this corrupt system. It's hard to keep those big pay packages coming without making sure that every possible customer is coerced by law into paying for them.
These mandates are going to be a hard sell as it is, even with a public option. As Gene Lyons points out in his column, there are good reasons why most people don't buy it already --- they can't afford it. They are, by necessity, playing a game of russian roulette with their health care. I don't know why nobody gets the idea that just because someone in Washington says a family that makes 50k a year can afford to spend 12% of their income to pay for the Cigna CEOs private jet, that they actually can. And to do this without offering them something that's guaranteed, well subsidized and subject to public scrutiny and citizen lobbying seems like political suicide to me.
Nonetheless, many of these Democrats are intent upon passing a regressive tax on middle income people that will go directly into wealthy insurance company coffers, which as Chuck Grassley admits right out loud is exactly the kind of "reform" the insurance companies are fully behind. And that's supposed to be a win-win for everyone. Except the people, of course, but who cares what they think?
Here's hoping, once again, that Obama and company realize that pleasing the insurance companies this way is not in their political interest. For while the House of Lords may not care about political consequences because they pretty much have lifetime tenure and a direct conduit to massive amounts of lobbyist cash, the president has an election in 2012 and an historical legacy to consider. If badly done, this "reform" will be a disaster and he will be blamed. He says he knows this. Let's hope he does and pulls out all the stops to keep these Fauntleroys from giving away the kingdom.
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