The Triumph of the Insurance Companies

The Triumph of the Insurance Companies by • March 22, 2010 • Printer-friendly

That cry you heard when the 216th vote was cast in favor of President Obama’s “healthcare reform” was the sound of insurance executives rejoicing before lighting their cigars with $1,000 bills. Just as Big Pharma was the chief beneficiary of President Bush’s Medicare prescription coverage bill, so Big Insurance has Barack Obama to thank for their coming years of plenty.

And thank him they will, as well as senators and congressmen who voted for the bill. But don’t worry about those who voted against it; the insurance companies won’t hold any grudges. They will spread their newfound wealth throughout the halls of Congress to ensure that no future healthcare reform will undermine their privileged position.

The Republicans who opposed the bill knew that, which is why they spent all of their time talking about abortion and other side issues rather than attacking the biggest corporate welfare plan in American history. When all is said and done, this gift to the insurance companies will dwarf the bailouts of the banks and the auto industry. The Republicans wanted to make sure that they would get their cut of the cash, too.

The big losers, of course, are the businesses that face fines if they do not provide adequate health insurance to their employees (Caterpillar estimates that the legislation will cost them $100 million, which likely means that their next plant will be built in Mexico or China rather than in Illinois), and those who are self-employed or work for small businesses exempt from the requirement to provide insurance. Like the businesses, they will be fined unless they purchase health insurance.

In the worst position will be those who do not currently have health insurance because they truly cannot afford it. They will be eligible for tax credits to make their mandatory insurance more affordable, but those tax credits will be nonrefundable, so if they owe very little or nothing in taxes, the credits will do them little to no good. They still won’t be able to afford health insurance, but now they will be forced to pay a fine—a minimum of $95 or one percent of their income (whichever is higher) in the first year, ratcheting up to a minimum of $695 or two percent of their income by 2014.

Come this fall, the Republicans will be able to campaign safely against the new law, and they will undoubtedly succeed in picking up a significant number of seats in the House and possibly the Senate. But they will never make any serious attempt to repeal this legislation. And by 2012, enough voters will have received tax credits so that the opposition will have died down. Those who will have been fined because they truly cannot afford insurance are among the least likely to vote anyway. President Obama, who staked his political future on this vote, is more likely now to be elected to a second term (after a campaign financed, of course, by significant donations by the insurance companies).

As awful as a single-payer national healthcare system would likely be, the United States just adopted something worse. The only consolation that those of us who oppose both Big Government and Big Insurance can look forward to is the coming consternation of those liberals who sincerely believe that Obamacare is an attack on the “criminal” and “evil” insurance companies and the first step toward a single-payer system. It won’t take long for them to realize that it is, rather, a major step backward from what they truly desire.

A single-payer system could only come at the expense of the insurance companies, and they are never going to give up the great gift that Obama and his colleagues have handed them, on a silver platter lined with 40-50 million new insurance premiums. The crumbs from their table that will fall into the campaign coffers of both parties will be enough to make sure that any additional healthcare reform will never threaten to put out the insurance executives’ cigars.

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