The Insurance Industry Doesn't Want Its "Giveaway"

by Jonathan Chait | March 1, 2010

For the last year, the left wing (and, to some extent, the right-wing as well) has insisted that Democratic health care legislation without the public option amounts to nothing more than a giveaway to the insurance industry. Interestingly enough, Sunday's Washington Post reports:

Reacting to President Obama's recent statements that he will move ahead with legislation, health insurance companies have enlisted hundreds of lobbyists in a full-court press against the proposed overhaul, which would force dramatic cuts and increased regulation on the industry. At the same time, insurers are pushing back against a separate bill approved by the House last week that would remove the industry's antitrust exemption.

Now, clearly the Democrats were negotiating with, and attempting to defang, the insurance industry. But the conclusion that the resulting bill was just a subsidy to insurers is obviously wrong. The insurers were playing a double game -- hoping reform would die, but negotiating to limit their downside risk if it did pass. They were most friendly to reform when it looked inevitable. Now that they have a chance to kill it, they're taking their best shot. That's not something you do to legislation that's designed to give you billions in profits.

Source URL: http://www.newrepublic.com//blog/jonathan-chait/the-insurance-industry-doesnt-want-its-giveaway