Breaking Out the Whipping Post

Yes, there’s a lot of understandable frustration in Washington, DC these days, and not just because of the horrendous post-blizzard rush hour traffic.  There’s a sense of desperation in the air as the November elections draw ever nearer and health reform legislation remains stuck short of the finish line.

With the clock running, it’s more than a little dispiriting to see that some politicians and interest groups, instead of trying to craft a middle-ground solution that can gain strong popular and political support, are turning to an old chestnut of a strategy.

Let’s beat up on the insurance companies.

As we head toward next week’s bipartisan White House summit on health reform, a loud refrain is being heard right now.  We need to pass health reform in order to protect Americans from the big, bad insurers.  The linchpin for this chorus is the premium rate increase that Anthem Blue Cross proposed in California.

There’s a problem, though, with this storyline.  Rather than an indictment of health insurers, the Anthem Blue Cross episode is actually a cautionary tale of what can happen when health reform ideas take a wrong turn.

As the Wall Street Journal points out in an editorial yesterday, Anthem had to propose a higher-than-normal rate increase because of policies developed by the state of California.  Where most states have created subsidized high-risk pools for the unemployed and those with health conditions, California requires private insurers to cover the unemployed whose COBRA benefits have elapsed, and then caps the premiums they can be charged.  So, in a state that has been hit hard by the recession, many young, healthy Californians are dropping their insurance coverage, leaving insurers to cover a population with much higher average health costs.

This is exactly what could happen on a national scale if Congress adopts health reform legislation that requires private insurers to take all comers, regardless of pre-existing health conditions, but doesn’t also include a strong requirement that all citizens acquire coverage.  If it’s advantageous for those with low annual health expenses to pay a relatively small fine and wait until they’re sick or injured to buy health insurance, they will do so.  That will leave insurers in the undesirable position of having to increase premiums or go out of business.

What is lost in the current conversation is the fact that health insurers have been advocates of reform.  Company CEOs like Angela Braly of WellPoint and Ron Williams of Aetna have been on record for some time – before health reform legislation was even introduced – calling for an end to pre-existing condition barriers.

That’s why it’s disappointing that some voices in Washington, DC are trying to re-energize the health reform movement by demonizing a sector of the health care industry.  Haven’t we learned from past failures that there is a better chance of success with collaboration than there is with confrontation?