Deal or No Deal: Insurers Willing to Trade Pre-Existing Conditions for Nationwide Massachusetts Plan

Add another sign to my list of indicators something big is coming for health care: health insurers are proposing their own plans to work toward universal coverage. Remember, insurers played a big role in torpedoing the last big effort at health care reform in 1993–94. The insurance companies may still vigorously oppose real national health insurance, but they are putting a plan on the table that includes a big concession on their part. The deal, according to the New York Times: two insurance industry trade groups say they'll guarantee coverage for people with pre-existing medical conditions if the government requires everyone to buy health insurance.

I'm generally suspicious of insurance companies, an industry that makes its money by finding clever ways not to provide the service its customers pay for. This bid feels like a negotiating position, offered to talk the government down from doing something bigger, like full-scale single-payer not-for-profit universal coverage. The insurers are offering RomneyCare to avoid KucinichCare. As the NY Times points out, even if the insurers promise not to formally deny coverage to folks with cancer or heart disease or even a history of complications in preganancy, they might still charge prohibitively expensive premiums for those applicants.

To their credit, the insurers are playing the game well, offering a plan that goes beyond the plan President-Elect Obama offered during the campaign to mandate coverage just for children. However, like my nocturnal friend Stan, I worry about ending up with a hybrid plan that combines the worst of various systems.

Getting rid of exclusions for pre-existing conditions is a big, vital, and moral step toward health care reform. But mandating the purchase of private insurance isn't a step toward reform when much of the inefficiency and bureaucracy in our health care system lies in the private insurance market. That's why I opposed the private insurance mandates proposed by Romney, Clinton, and Obama. If we're going to intrude in the market and require people to buy a product, health insurance, then we as a nation ought to get into the business of providing that product ourselves and doing it as cheaply and efficiently as possible. Remember: private insurance overhead—i.e., the money that pays for administration, executive salaries, lawyers, and everything else other than actual medical care—can be as high as 29%; America's government health coverage, Medicare, gets the job done with overhead of 3%.

But if even the health insurance industry is ready to play ball, big reform must be on the way. hang on tight: it's going to be a memorable first One Hundred Days.