Obama vs. the Insurance Companies

Jules Witcover

Reviving Healthcare reform

When it comes to health-care reform, is there a single-payer advocate inside Barack Obama yearning to get out?

Despite explicit comments to the contrary, the president is creating that impression in his 11th-hour bid to push his reform bill through Congress over fierce Republican opposition. Obama's all-out assault on the health-care insurance industry as an irresponsible, greedy monster preying on insured middle-class Americans must be music to the ears of tenacious supporters of the Canadian model of a government-run plan.

Recently in the East Room, the president dismissed the single-payer approach, pushed by some liberal Democrats as a "public option" variation. He observed that "there are some who have suggested scrapping our system of private insurance and replacing it with government-run health care. Though many other countries have such a system," he said with no further elaboration, "in America it would be neither practical nor realistic."

Many such Democrats would argue the point, but the long health-care debate has demonstrated the political difficulty of even launching a serious discussion of the single-payer approach. Obama himself has essentially declined to encourage or enter into one. Now, however, he seems to have recognized the political necessity of making the insurance industry the villain in the piece, after a long courtship that has gone sour.

In doing so, Obama has been handed a welcome hammer with which to pummel the industry. Anthem Blue Cross in California has sought to levy a whopping 39 percent premium increase on its clients, rather incredibly amid the worst public climate for such a money grab.

It has enabled the president to segue from lambasting the rigid opposition of the Republicans in Congress, which ran counter to his plea for bipartisanship, to the purveyors of corporate greed. "I don't believe we should give government bureaucrats or insurance company bureaucrats more control over health care in America," he said in his East Room preaching to the selected choir. "I believe it is time to give the American people more control over their own health insurance."

In his subsequent speech at Arcadia University Monday, the president took a more direct and intensified aim at the insurance companies. He argued they "continue to ration health care based on who's sick and who's healthy; on who can pay and who can't pay. ... We can't have a system that works better for the insurance companies than it does for the American people."

"Every year, the problem gets worse," he warned. "Every year, insurance companies deny more people coverage because they've got preexisting conditions. Every year, they drop more people's coverage when they get sick right when they need it most. Every year, they raise premiums higher and higher and higher." And of Anthem Blue Cross's attempt "to jack up rates by nearly 40 percent," he asked the audience, "Anybody's paycheck gone up 40 percent?"

Obama also cited a Goldman Sachs conference call with an investment broker who said "insurance companies know they will lose customers if they keep on raising premiums, but because there's so little competition in the insurance industry, they're OK with people being priced out of the insurance market."

The reason, Obama quoted the broker as explaining, was "because, first of all, a lot of folks are going to be stuck, and even if some people drop out, (the insurance companies will) still make more money by raising premiums on customers that they keep. And they will keep on doing this for as long as they can get away with it." Obama added: "This is no secret. They're telling their investors this: We are in the money; we are going to keep on making big profits even though a lot of folks are going to be put under hardship."

Advocates of the Canadian single-payer approach, or of the public-option approach providing a competitive alternative to private insurance, might well ask themselves: Why does Obama still choose to work through the profit-driven insurance companies if he feels they are so villainous? The obvious answer is, once again, the pragmatic has triumphed over the ideal.

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Healthcare Reform - Obama vs. the Insurance Companies | Jules Witcover