Wednesday, October 20, 2010


Healthcare reform was supposed to be the jewel of the first two years of President Obama's first term. It hasn't exactly turned out that way. In fact, the new law is being used by Tea Partiers and Republicans as an example of the "socialist" nightmare electing Obama has brought about and may prove to be a significant element in making Mr. Obama a one-term president. The reason the "reform" is so unpopular with conservatives is the requirement that every American buy health insurance.

Liberals aren't all that thrilled at the new law either, and have been disappointed right from the start that the White House made "partners" of the health insurance industry, getting input from them to the exclusion of those consumer advocates who wanted either a single payer system or, at the very least, a public option. The requirement that everybody have health insurance is fine in theory, but it makes no sense without requiring that the insurance companies justify any premium increase.

Everybody is unhappy with the new law, well, almost everybody. Insurance companies, who made out like bandits, are quite happy with a huge new pool of customers whom they can bilk without any interference.

Jamie Court and Carmen Balber, both of Consumer Watchdog, address the problem of premium hikes in an opinion piece in the Los Angeles Times in which they urge the president to take bold action right now and continue that pressure at both the federal and the state levels to keep insurance premiums at a reasonable level.

Health insurance companies have declared war on President Obama's healthcare plan.

They are sending letters to policyholders announcing big premium increases and pointing the finger at the federal healthcare overhaul. Some insurers are refusing to sell individual policies for children because of rules requiring them to take all comers, not just those in perfect health. They are lobbying on Capitol Hill and in statehouses to undermine or eliminate the law's provisions.

Secretary of Health and Human Services Kathleen Sebelius answered insurers' scare tactics by saying she would have "zero tolerance" for such behavior, but the administration's response so far has been limited to words.

It's time the president uses his clout and fights back.

The writers urge the president to order a freeze on premiums until HHS completes the regulatory system which defines the path to "justification" for premium hikes the law requires. That system is supposed to be completed by the end of this year. The freeze would stop the gouging being implemented by the insurance companies right now.

They also urge him to use his position to encourage states to use their regulatory clout to keep premiums in line. They use the example of California's system of mandatory auto insurance and premium regulation passed by the voters in 1988. California drivers saved millions of dollars, and the car insurance companies are still in business, doing quite nicely.

The new law is hardly perfect. For many of us, it's an absolute giveaway to the corporate interests, but it's a start, a first step, however hobbled that first step is without a public option. That start will be lost, however, if the president doesn't take some uncharacteristically bold action right now. The two writers of this op-ed have got it right:

Obama made the mistake of capitulating to the insiders in Washington when he reversed his campaign position and agreed to include a health insurance mandate in his reform law, without a cap on premiums. He now has the opportunity to defuse the ticking time bomb of outrageous health insurance premiums that everyone will be forced to pay, but only if he thinks like an outsider again. That could save policyholders a lot of money, and maybe his presidency as well.

Hopefully somebody in the White House is listening.

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