The bill is instead a breathtaking display of illiberal ambition, intended to make the middle class more dependent on government through the umbilical cord of "universal health care." It creates a vast new entitlement, financed by European levels of taxation on business and individuals. The 20% corner of Medicare open to private competition is slashed, while fiscally strapped states are saddled with new Medicaid burdens. The insurance industry will have to vet every policy with Washington, which will regulate who it must cover, what it can offer, and how much it can charge.
We have little sympathy for the insurers, or for that matter most of the other medical providers who signed on to this process only to claim now to be appalled by the result. The insurance lobby—led by Aetna CEO Ron Williams—made the Faustian bet that it could trade new regulations for more new subsidized customers who would face a tax penalty if they didn't buy their insurance. The Pelosi bill includes the regulation but guts the tax penalty because it's unpopular. Insurers will thus have to cover more sick people with fewer dollars, as healthy folk opt out of coverage until they are sick.
This writing was on the wall months ago, but the insurers chose to play an inside game rather than shape public opinion. Judging by their weekend statement—criticizing the House bill but vowing to seek "bipartisan" reform—they will now throw themselves at the mercy of the Senate. Good luck with that.
Monday, November 09, 2009
If You Get In Bed With Tyrants, Don't Be Surprised By Who Ends Up On Top
Selling the rope to hang themselves: