Will Private Health Insurance Survive ObamaCare?

The health care bills now pending in congress require insurance companies to cover people with pre-existing conditions.   In the industry this is called “guaranteed issue.”

To a large extent guaranteed issue is already in effect.  A 1996 federal law, the Health Insurance Portability and Accountability Act (HIPAA), requires guaranteed issue for employee groups.  Several states also require insurance companies to comply with guaranteed issue for individual policies.

Politicians wanted the credit for caring for uninsured sick people but didn’t want the blame for higher taxes that would be required if government provided that care.  So they came up with guaranteed issue, making insurance companies the de facto tax collectors, by forcing them to raise premiums for everyone to cover the costs of insuring people who are already sick.

The rapid rise in the cost of health insurance in recent years coincides with implementation of guaranteed issue requirements.

A consequence of guaranteed issue is the incentive for people to delay buying insurance until they get sick, when they can plunk down one month’s premium to become “covered.”  Even politicians can understand that the insurance business won’t pencil out, and eventually will cease to exist, if enough people take advantage of this loophole.

Thus, both House and Senate health care bills also include “individual  mandate,” that requires everyone to  buy health insurance, on penalty of fines and even jail time.

Last week Senate leaders admitted they didn’t have enough votes to pass their health care bill if it includes a so-called public option, or a government owned and operated insurance company.  As a result, the hard core government health care supporters on the left are demanding that the individual  mandate be removed from the legislation.

These folks don’t mind forcing people to buy insurance, as long as a government owned option is available.  But in their alternative reality, where government is “good” and private companies are “bad,” forcing people to buy private insurance is unacceptable.

Markos Moulitsas of the Daily Kos is typical of the Left in his hysterical reaction:

…it is unconscionable to force people to buy a product from a private insurer….Without any mechanisms to control costs, this is yet another bailout for yet another reviled industry. Subsidies? Insurance companies are free to raise their rates to absorb that cash. More money for subsidies? More rate increases, as well as more national debt.”

Mr. Moulitsas apparently has noted the way higher education has been able to raise its prices at rates far exceeding inflation for decades, absorbing every additional dollar of government subsidy, scholarship aid and student loans.

While the political-media establishment continues to predict that ObamaCare will eventually pass and government will eventually take over, the Democrats and their supporters continue to be deeply divided and seem to be unable to reconcile their various, highly emotional and vocal factions.

The Bottom Line

As The People watch in dismay, Congress comes closer and closer to passing a massive – and Unconstitutional – law that will eventually drive private companies out of the health insurance business.  But of course, that’s the ultimate goal of the Leftists who always wanted the federal government to be the only provider of health care.