Evil Health Insurance Corporations Love ObamaCare

What do health insurance executives think of ObamaCare? This will upset principled activists at both ends of the political spectrum (and about 60% of the adult population):
As Republicans push forward on repealing health reform, planning the law’s demise, a different conversation is happening among thousands of health care investors gathered in San Francisco for this week’s J.P Morgan Health Care Conference: how to capitalize on health reform’s new business opportunities.

The Congressional Budget Office estimates 32 million Americans will gain health insurance by 2019 if the law stands. For health insurers, that represents a potential boon for both their individual market business as well as in the Medicaid market, where states regularly contract with private insurers to manage care.
Happy days!

If you think the GOP, as it is currently configured, is serious about repeal, think again. Pay very close attention to what is said of the individual mandate:
Health insurers spent barely anytime discussing Republicans’ repeal efforts. Aetna’s Zubretsky touched on the subject briefly only to say that Republicans understand that a rifle shot approach to tearing out specific health reform provisions, particularly the individual mandate, would not bode well for their business.

“The unintended consequence of repealing and replacing part of the legislation is the biggest risk here,” he said. “If guaranteed issue stays but the enforceable mandate disappears, you need another mechanism to make the costs in the risk pool work.”

Zubretsky said Aetna has been in touch with the GOP on the issue and “believe the Republican leaders we’ve been talking to understand the consequences of decoupling the mandate from the guaranteed issue.”
Without an extreme makeover, the GOP won't get serious about repealing ObamaCare in 2012, whether they control the White House or not.


As I've noted in previous posts, conservatives need to push for an up-or-down vote on a clean and simple repeal of the individual mandate. That will help clarify the intentions of folks on both sides of the aisle.

By a 60% to 38% margin, Americans oppose the individual mandate. Will the new GOP-controlled House take action in accordance with the wishes of the American people? Will conservatives push the GOP hard enough? Are we ready to "primary" more Republicans in 2012?

You have often heard those who favor reform complain about the power of the health insurance industry. I think those who favor repeal are about to feel it.


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  1. So it may be a reasonable assumption that any GOP effort to repeal "ObamaCare" may just be a show pony... "Look, we tried..."
    Funny thing is, that this conference has the label of JP Morgan and is in San Francisco, to "Capitalize" on the new law.

  2. I am not as up in arms as you are. it has always been clear you cannot have guaranteed issue without either the mandate or some other way of paying for the additional cost.

    I doubt anyone spent much time talking about repeal because it is highly unlikely there will be a repeal until after the 2012 election. I do agree the Republicans need a clean repeal vote in the House and whatever they can get out of Reid in the Senate. Everyone needs to be put on record as to how they will vote on Health Care repeal.

    I believe the best strategy is to pick away at the taxing and funding for the health care bill as the opportunities arise.

  3. Rick Caird said...

    "I am not as up in arms as you are."

    Are you a conservative?

    "...it has always been clear you cannot have guaranteed issue without either the mandate or some other way of paying for the additional cost..."

    I don't want guaranteed issue. Guaranteed issue is an anathema to liberty and conservative free-market principles.

    In polls, Americans say they want health care for all, but they don't want the individual mandate, and I'm pretty sure health insurance companies don't want to go out of business.

    So kill ObamaCare by going after the lynchpin, the individual mandate.

    At the same time, you'd be taking out the most toxic piece of the health care legislation, the piece that is founded on the notion of virtually unlimited government power.

    (...and health insurance companies would have skin in the repeal game)

    "I doubt anyone spent much time talking about repeal because it is highly unlikely there will be a repeal until after the 2012 election."

    The new profits that health insurance companies are eagerly anticipating wouldn't come until 2013. If health insurance executives expect to make profits from the individual mandate, they don't think Republicans will repeal the mandate after the 2012 elections.

  4. I had a long response to RightKlik that was eaten by your system. I now regret supporting Left coast Rebel's request to Betsy to add this site to her blogroll. RightKlik's response was crap.

    The first quote points out this was a JPM "investor conference". I doubt insurance companies will benefit from the health care bill because the estimates of the cost are wildly underestimated and government will try to make that up out of the insurance companies and the providers. I also noted 26 states have sued over the Medicaid requirements. The states are bankrupt. The Feds are bankrupt. There is no money for this. There will be a lot of pressure by the states on their Senators to repeal this.

    Guaranteed issue cannot happen without the mandate or an alternative funding mechanism. I understand that and I expect the insurance companies to understand that. I am not upset if they verbalize that.

    Your argument that the expected profitability of the insurance companies will prevent the repeal of the health care bill is at best silly and at worst stupid. Rightly or wrongly, these companies are despised. 60% of the country hates this bill. I repeat, the fight for repeal will be in the 2012 elections. Win that vote and it will be repealed. Lose it and look for more bankruptcy.

  5. @Rick Caird

    I didn't mean to offend you, but I don't know you and I don't know where you stand on the issues.

    The truth of the matter is that health insurance executives know that the individual mandate is the key to any opportunity for profitability in the post-Obamacare world. The mandate was essential to winning insurance industry support for Obamacare and acceptance of heavy federal regulations.

    You don't have to take my word for it, just ask David Rivkin Jr. and Lee Casey.

    I agree that Obamacare is designed to kill the private health insurance industry in the long run. But as Milton Friedman famously observed, corporate executives can be surprisingly short-sighted.

    To paraphrase George W. Bush, they've
    abandoned free-market principles to protect their piece of the "free" market.

    If Republicans are not prepared to stand up to the private health insurance industry, they are not prepared to win the health care battle.

    PS: We cannot afford to wait until 2012 to begin fighting this battle in earnest. Bringing a "repeal the mandate" bill to the floor would help determine whether Republicans intend to stand with the American people, or with Obama and his friends in the health insurance industry.

    Republicans who are not prepared to take a principled stand on behalf of the wishes of the American people (in accordance with the Constitution) need to be defeated in the 2012 primaries.

  6. We are probably pretty much in agreement. The mandate is critical to the health insurance companies staying in business. Everybody understands that. Without the mandate a whole bunch of things don't work, but guarantee issue is the premier. If you don't have guarantee issue and the states balk at the Medicaid expansion, we are left with nothing but taxes and the whole bill implodes.

    I suspect the health insurance companies just cut the best deal they could. I doubt many of them are really supportive of the reform bill. Others, like AARP, do see a business opportunity.

    Republicans need to hold their repeal vote in the House and bring along as many Democrats as they can. It will be more difficult to get votes in the Senate, but there are 23 Democratic Senators up in 2012 and they need to be forced to vote on as many parts of repeal as possible.

    But, I don't see repeal getting through the Senate. In the meantime, the Republicans need to defund as much as possible and expose the many nasty "gotcha's" in the bill. The more the country hears about what has actually been passed, the less they like it. That has to be hammered home at every opportunity, Just because I don't believe the bill can be repealed prior to 2012 does mean waiting until 2012.

  7. Thanks for the shout out RightKlik!

  8. Here's a really good one:

    …Obamacare never would have become law in the first place if not for the solid and unrelenting support of the health insurance industry. The industry’s support for Mr. Obama’s effort was unfaltering. And during the long and perilous process that finally brought Obamacare to the President’s desk, whenever the cause faltered and appeared to be lost, representatives of the insurance industry would rise up and take whatever strong and difficult action was needed to get it back on track.

    …the insurance industry did not support Obamacare out of any principle, or compassion, or any sense of what was moral or right. They did it as a matter of life and death – theirs. For the health insurance industry had run out its string, shot its wad, blown up its business plan, and had nowhere else to turn. It was Obamacare – and its soothing “promise” to allow the industry to survive in diminished form, as a government-controlled utility – that offered insurers their only visible path away from oblivion.

    The insurance industry is not about to go back. Furthermore, unlike Nancy Pelosi, Harry Reid and even President Obama, the insurance industry is not satisfied to let the political realities of the day block the Republicans’ efforts at repeal. For all they know, nervous Democrats in the Senate who want to be re-elected in 2012 will allow the repeal bill to go to the President’s desk. Worse, unused to seeing Presidents willing to sacrifice themselves on the alter of principle, the health insurers, in their existential panic, must wonder whether even Obama might finally change his mind and decide that he wants to be re-elected badly enough to sign a repeal bill. These possibilities seem pretty far-fetched to DrRich, of course, but to DrRich the prospect of repeal does not spell Armageddon.

    During the long and painful process that saw Obamacare become law, the health insurers clearly demonstrated just how far they were willing to go to keep that process alive. DrRich is certain they will be happy to go at least that far to block repeal.

    So it came as no surprise when, just last week, the insurers sent Republicans their first, gentle reminders that they will not countenance any such thing. At the Reuter’s Health Summit in New York, David Cordani, the CEO of Cigna, warned Republicans, “I don’t think it’s in our society’s best interest to expend energy in repealing the law. Our country expended over a year of sweat equity around the formation of it.” And Mark Bertolini, president of Aetna, said that any attempt to repeal Obamacare, or even an attempt to hold up funding for it, would be “problematic.” “We can’t go back,” said Bertolini, “We need to keep moving, and we need to improve upon what we have.”

    These seemingly mild-mannered statements should send a chill up the spines of Congressional Republicans. Any repeal of Obamacare necessarily and utterly relies on the acquiescence of the insurers…

    …insurers know that their current business model is completely defunct, and far beyond any salvation. They see Obamacare as their only visible lifeline, and any serious threat to Obamacare as a threat to their survival.

    The health insurers simply will not countenance a repeal of Obamacare. They will do whatever is necessary to demonstrate this fact to the Republicans. Their initial foray is suitably gentle. But once the repeal effort gets revved up, watch out. The insurers have already graphically demonstrated just how ungentle they can be.

    If the Republicans really want to get rid of Obamacare, they’re going to have to propose an alternate solution that, among other things, provides the health insurance industry with a new and viable business model, one that seems at least as good to them as the rather paltry one Obamacare has promised…

    DrRich does not think the Republicans have any idea of what may be coming their way, and from the very industry, no less, they consider to be their chief ally in the healthcare wars.

    They should pay more attention.



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