Politically, the Democrats have put themselves in a position where even if they pass a bill with the public option, they will have to survive the 2010 and 2012 elections based not on what they have done for the American people but what the future might hold -- and Americans are notoriously impatient.
Meanwhile, the Republicans will get to pummel Democrats for promising better health-care results -- and for delivering nothing of note.
There's also the prospect that a new Republican Congress in 2011 or a new Republican President in 2013 could move quickly to repeal any public option that might have survived in the legislation. Since the people will not have experienced any benefits from the not-yet-implemented public option, there wouldn't be a powerful constituency to fight for it.
And, a Republican-controlled Congress and GOP President wouldn't hesitate to ram revisions of the health-care reform through on a majority vote under the budget "reconciliation" process, as a Republican Congress did with tax cuts during George W. Bush's presidency.
With these political prospects ahead, the health insurance industry apparently believes it has weathered the worst of the reform storm and can begin zeroing in on a few lesser irritants, like trying to get Congress to ratchet up the coercion on the nearly 50 million uninsured Americans so they will be forced to sign up for private insurance policies.
In a brazen act that took Democrats by surprise, America's Health Insurance Plans, the industry's lobbying arm, went on the attack against the industry-friendly Senate Finance Committee bill because of relatively weak penalties of only a few hundred dollars a year assessed against people who don't buy insurance even with government subsidies.
AHIP feared that the fines wouldn't be coercive enough to force young people to buy insurance. Thus, the worry was that the industry's new sign-ups would be customers the industry doesn't want, people who need medical attention.
So, industry lobbyists warned that if Congress didn't raise the fines on the uninsured, the industry would jack up its premiums across the board. "The consequences of this would be an upward spiral; rate shock to everyone who stays in," AHIP president Karen Ignagni said.
A Blunder?
While the White House and congressional Democrats suggested that the industry had committed a blunder and risked a political backlash, the assault on the Finance Committee bill, which already had bent to the industry's will by excluding a public option, could be read as an act of confidence.
On Tuesday, Ignagni published an op-ed in the Washington Post defending an industry-sponsored study that warned of higher rates if harsher penalties were not included to force Americans to buy insurance. But the article also revealed how modest the industry sees likely cost savings from reform.
Without reform, "the CBO projects that health-care spending will rise at an annual rate of 6.2 percent for the next decade," Ignagni wrote. "We believe the nation can bend the cost curve by 1.5 percentage points annually if reform includes systemwide efforts to reward best practices, shrink the wide variation in care, expand care coordination, and equip doctors and patients to make decisions based on what works."
Ignagni then chastised Congress for its supposed unwillingness to address these medical changes. She wrote:
"The shared promise of health-care reform is guaranteeing access to affordable coverage for those outside of the system while ensuring that those who have coverage can keep what they like. That promise can be kept only if Congress puts the nation on a path to universal coverage and confronts what lawmakers have thus far been unwilling to address: the need for tangible, effective steps to reduce the growth in health-care costs and make the system sustainable for generations to come."
Remarkably, Ignagni's suggestions for trimming the annual increases in health costs -- from 6.2 percent to a still hefty 4.7 percent -- rested on restraining costs associated with what doctors and hospitals charge, not on demanding sacrifices from the insurance industry.
Indeed, the industry may believe it has dodged the most dangerous bullet aimed at its administrative expenses and profits, stiff competition from an across-the-board government-run plan.
