Seldom discussed in conversations about the health care law (the Patient Protection and Affordable Care Act or ACA) is the fact that the insurance industry has a significant stake in the law’s individual mandate provision. Insurance companies understand the ACA’s importance to their own salvation and have invested untold millions incorporating relevant provisions of the law into their own policies and practices.
To understand how the insurance industry came to embrace Obama’s health care law after it fought so hard sixteen years ago to derail the Clinton Administration’s efforts at reform, it’s helpful to understand what’s happened in the intervening years.
During the merger and acquisition days of the 1990s insurance companies were in a shark feeding frenzy to hunt and subsume smaller companies. Companies like Aetna and Cigna emerged as voracious giants able to churn out fat quarterly profits for their shareholders. These companies never played any legitimate role in holding down health care costs as they promised they would when they waged war against the Clinton Administration’s attempt to reform health care. There really was no need: As long as they were able to pump up shareholder profits by aggressively excluding an ever growing number of Americans from insurance coverage and forcing policyholders to shoulder ever larger percentages of their own medical costs all conversations about holding down health care costs were specious at best.
Eventually new economic realities reshaped the insurance marketplace as an increasing number of Americans simply chose to opt out of purchasing any health insurance. Very often, even when insurance was made available through employment, Americans found the spiraling cost of insurance premiums and ever higher deductibles totally untenable. In an era of stagnant wages, decreasing benefits and increasing inflation, more and more Americans simply could not afford health insurance.
Soon insurance carriers realized squeezing policyholders ever more dry in order to increase the bottom line only strangled the geese laying all those golden eggs.
Insurance companies created new strategies to offset their losses in the sales of insurance products. They diversified by acquiring hospitals, physician groups and other related medical care management and delivery systems. How Aetna and Cigna rebranded themselves with new mission statements is instructive. Cigna identifies itself as a “global health service company” and Aetna claims it’s one of the “leading health care benefits companies.” Did you get that? They are now health “service” and health care “benefits” companies. The word “insurance” is barely in their corporate vocabularies. The fact that insurers are also health care providers is of growing concern to medical ethicists, health care professionals and consumer advocate groups – but that’s a story for another day.
So it’s logical that insurance companies played a dominant role in assuring that Congress chose the individual mandate option as a cornerstone of the ACA. There would be no better way for the large insurance companies to not only survive but thrive than to have an expansion of health care via the mandate that all Americans must purchase insurance coverage.
The other option, of course, was a single-payer system which is essentially a vastly enlarged version of Medicare and would be run by the government. A single-payer system would have the benefit of being clearly constitutional and is also the model most employed by other nations. However, it would leave the health insurance industry out in the cold.
But the issue impacts all of us. Without the individual mandate the ACA may still stand but the number of people willing and able to purchase health insurance will continue to shrink as has happened for a decade. The remaining pool of insured individuals will age and become sicker while younger people and families will become increasingly less likely to buy insurance. This gap will cause premiums to soar, Medicare will become ever more strained, and the number of uninsured will continue to create stress on the economy in catastrophic ways. All people well versed in the crisis in health care realize America has to do something to make health care accessible and affordable for all and unless the government takes over healthcare the only way an alternative system can survive is if it requires the participation of all Americans. The individual mandate was a compromise Obama was forced to make but if the ACA unravels under the judicial scalpels of the Supreme Court single-payer may yet be the way we go.
Which brings me to the grand irony of this battle: devotees of free market capitalism created the constitutional test about the individual mandate in an effort to destroy the ACA (and let’s admit it: also Obama) but the mandate they attack is a safety net for the largest for-profit free market industry in the nation.
Proving rather brilliantly how political interests can sometimes murder their own strange bedfellows.