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David Sirota

David Sirota

Posted: December 13, 2010 07:40 PM

Over the past few hours, the mediasphere has been ablaze with talk that Republicans and their insurance industry backers supposedly won a huge victory with a Virginia court's ruling that the mandate to buy private insurance is unconstitutional. On the policy merits, this seems to make no sense. At all. In fact, the Republicans pushing this court case may have inadvertently helped America take a progressive step on health care, if progressives can actually take advantage of the situation. Hear me out.

The mandate to buy insurance was always a huge giveaway to the private insurers. It guarantees them a pool of customers that will pad their profits for eternity, thus solidifying private insurance as the profit-taking middleman in the American health care system. The Virginia court, however, struck down the mandate but did not strike down the other mandates forcing the insurers to sell you insurance. For instance, the court ruling did not eliminate the mandate for insurers to sell you insurance despite your preexisting condition; did not eliminate the mandate for insurers to use a certain percentage of their revenues to provide health care services (rather than padding profits); and did not eliminate the mandate that ends lifetime caps on health care benefits.

So, assuming this ruling stands (which, granted, is a big assumption), we have a situation whereby the insurance companies no longer have the state forcing you to buy a private product with no public alternative (ie. a public option), but the insurance companies do have the state forcing them to offer their product to you in a way that doesn't discriminate against you on the basis of pre-existing condition, and in a way that allows you to buy their product when you want to buy it.

Someone please tell me how this is a bad thing for the progressive cause of cracking down on the insurance industry and empowering health care consumers.

This is exactly why you have the insurance companies freaking out, threatening ever-higher premiums unless they get the mandate they originally rammed through Congress. And like loyal corporate lapdogs, this is why you have the Obama administration - which crafted the original health care bill with the insurers - telling the New York Times that "if (the mandate) eventually falls, related insurance reforms would necessarily collapse with it, most notably the ban on insurer exclusions of applicants with pre-existing health conditions." It's a scare campaign aimed at making sure the insurers get their ransom - aka the guaranteed profits and power that come with a customer mandate.

Now, let me be clear: the Virginia court ruling in no way solves the health care crisis in America (and if lobbyists have their way, it may ultimately make things worse - more on that in a second).* But neither does the private insurance mandate solve the health care crisis, either.

Indeed, I opposed the mandate on the same grounds that candidate Barack Obama opposed it: namely, I don't think the major problem in American health care is that too many people choose not to buy insurance, I think the major problem is that too many people cannot afford that insurance because the insurers are profiteers, and because there's no affordable government-provided insurance option for those ineligible for Medicare/Medicaid. The only way I thought progressives should support an individual mandate was if that mandate came with the option of buying into a publicly-owned/accountable entity (ie. a public option). At least then, if the government was forcing its citizens to buy a product, those citizens would have the choice of buying into something We the People own, rather than forcing us to buy exclusively a private profit-generating commercial product.

Of course, thanks to President Obama, conservadems and Republicans, we didn't get a public option - we only got the insurance mandate and a few progressive mandates on insurance companies themselves (preexisting condition ban, etc.). So while, again, this court ruling does not solve health care at all, for the moment, it leaves us with a situation that could end up better for consumers. Especially if state insurance commissioners actively prevent rapacious insurance premium increases, we are left with a health care regulatory architecture that no longer forces you to buy insurance at whatever price the insurers decide to charge, but nonetheless forces insurers to sell it to you in a way that obligates them to comply with other progressive mandates.

No doubt, the insurers will do everything they can to make sure that reality doesn't exist for too long. That's just too much power in the hands of average consumers for them to continue making the outsized profits they are making - and you better believe every insurance lobbyist is already working to come up with some other scheme to guarantee their industry's profits. They are working, in other words, to use this court ruling to compel Congress to help them create an even more exploitative system of health care profiteering.

But make no mistake about it: the court ruling itself is not automatically some ideological win for the Republicans and their insurance industry backers. Unto itself, and with enough progressive grassroots activism, there is a chance that the ruling makes the progressive cause of limiting insurance industry power and getting to real health care reform a bit easier. After all, what is a single payer system other than one where the government forces the system to guarantee coverage as a right of basic citizenship, but doesn't force citizens to pay off private corporations in the process?

* Additionally, this post says nothing about the other bad non-health care issues that the ruling may create in terms of constitutional precedents regarding the commerce clause.

UPDATE: See Jon Walker's terrific post on why successful health care reform is not predicated on an individual mandate to buy private insurance. Also remember, if you are freaked out by the end of the individual mandate, then start pushing for the lame-duck Congress to pass the public option via reconciliation - which it is still allowed to do in the current congressional session.

 
 
 

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