Congress to Health-Insurance Lobby: Mess With Us? Be Prepared For Us To Mess With You.


You wouldn't like Chuck Schumer when he's angry.

Earlier this week, the health-insurance lobby released a report making the case that four provisions in the health-care reform bill would cause premiums to rise much faster than they would otherwise. Democrats in Congress didn't take kindly to the last-minute attack, and now at least one has apparently decided it's time to strike back:

The long-simmering tension between insurers and congressional Democrats is erupting into open warfare, with lawmakers stepping up their push to revoke a key federal protection for the insurance industry.

Sen. Chuck Schumer (D-N.Y.) on Wednesday will call for an amendment to the health care reform bill that would remove the long-standing antitrust exemption for insurers, echoing a push by other Democrats to crack down on the industry.

The article says that Schumer's move is "more political than practical," which probably translates into "not likely to pass." And to some extent, the insurers brought this on themselves. They know how the Washington game is played (or should, anyway). But it's still suggestive about the way legislators respond to industries that attempt to disrupt their grand plans—in this case, with a show of force and an implicit threat.

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  1. Caption:

    I'll start with this finger, but it'll be a straight fisting soon enough.

  2. But it's still suggestive about the way legislators respond to industries that attempt to disrupt their grand plans?in this case, with a show of force and an implicit threat.

    You misspelled "explicit".

  3. Yeah, MikeP, I actually thought about that word and went back and forth -- but I still think it's technically implicit: It's clear what's going on, but Schumer isn't explicitly saying, "Look, this is retaliation for deciding to lash out earlier this week." And given that it's unlikely to go anywhere, this is more of an implicit threat -- a reminder of who's in charge -- to make the insurers' lives difficult rather than an explicit threat to force through this particular provision.

  4. FUCK.......CHUCK.......SCHUMER.

    1. I can see it now. Chucky dressed like Tim Curry in Rocky Horror

      mmmmmmm That's just good fantasy.

  5. The article says that Schumer's move is "more political than practical," which probably translates into "not likely to pass."

    You've got that backwards, I'd say.

  6. As a practical matter, it seems to me that removing the anti-trust protection might make it easier for interstate competition among insurors.

  7. This is classic Chuck. If you've ever seen the footage of him questioning people in Senate hearings (for instance, Waco), you would know his arrogance is off the scale, and he hates not having people fall to their knees before him.

    He is scum of a magnitude that it is difficult to comprehend.

    1. Isn't he also the one who threatened to reinstate the Fairness Doctrine and attack ABC if it did not "correct" its 9-11 docudrama to make the Clinton Administration look less culpable?

      Any elected official who threatens people like this should be impeached on the spot.

  8. Ray Charles could see this coming. When you get in bed with congresscritters, sometimes you get spooned. Sometimes you get forked.

  9. "'Chuck'...you know that rhymes with, right?"

  10. "It's just a jump to the left!"

  11. Given a choice, I'd much rather have the big insurance companies broken up into smaller ones than have government provide health care.

    1. Or we could, ya know, let them compete across state lines.

      But apparently Obama thinks that's too complicated. Unlike the Baucus bill.

  12. I still don't understand why more companies don't ask Congresscritters if they know how much a hit costs.

    Companies have a fiduciary duty to their shareholders.

  13. Seeing that woman from Texas rip Chuckie a new one during the '94 assault weapons ban hearing was a sight to behold.

  14. Hello, Schumer.

  15. I'm sure the Insurance Companies will pull through and survive, or will they!?!?!?! MWa ha ha ha ha

    Here ya go, i was thinking of you guys. This would look great on the wall of Reason Studios. Since nothing else of note is done by Reason lately.


    1. Yes, just keep yelling at economics some more. I'm sure it will hear you and change it's ways. Supply and demand need to be properly chastised by the righteous, or they'll never learn anything.

  16. This does seem like a good use of Senate time and resources.

    What's the use of getting elected to the world's most deliberative body if you don't get into the occasional flame war with an entire industry?

  17. Don't they have anti-trust protection due to state commissioners and the highly regulated nature of state markets?

  18. Yes, they might stop to consider for a second the possibility that premiums might *actually* rise.

    What's fucked up is that they seem to think that they can simply intimidate insurance premiums into falling. Like if you just huff and puff enough about "greed" and "wealthy fat cats" the economy will spontaneously obey you.

    It doesn't take very much thought to realize that if you are forcing insurance companies to pay for pre-existing conditions, that insurance rates are going to rise. And if you aren't seriously enforcing your "mandate" that non-sick people aren't going to join the risk pool.
    Anyone who actually is making an honest effort to address the issue (as opposed to trying to score a few political points), is going to figure that out in five seconds.

    It's one thing to criticize the market for depending on people behaving rationally. It's another thing to cook up a scheme to "fix" the market that absolutely, positivly, depends on people behaving irrationally.

  19. They don't call it the *bully* pulpit for nothing.

  20. It's hard to really express the depth of my sympathy for a group of rent-seekers who suddenly found out they won't be getting the deal they thought they originally struck.

    1. I really don't care about the insurance companies themselves. But the Baucus bill is going to wreck the private health insurance system entirely. And since you are forced to buy something, you're going to be forced to buy government insurance.
      Don't kind yourself into thinking that when everyone ends up paying the annual head tax, it won't turn into a government health plan.

  21. For Schumer and his ilk, the entire goal of healthcare reform is to force the health insurance industry to fail, so that government-as-single-payer can take over.

    The whole unconditional issuance/weak mandate thing, its good because it won't work. Revoking anti-trust protections without deregulating the industry, same thing.

    The Dems have realized that a generalized economic crisis isn't the crisis they need to take over the healthcare system, so they are busy engineering a healthcare crisis to take advantage of.

    1. Well, it won't "fail" exactly. What will happen is that premiums will skyrocket. When they hit $20,000K, we'll have another "crisis" and they will push through a government program subsidized by tax dollars so they can offer below-market rates. THEN the insurance companies will go broke. Then the government program will be extended to cover all the people paying the annual fine/head tax. Then the head tax will be rescaled to be "progressive".

      1. I think at least some insurance companies may fail since 1) They will have to take all applicants 2) there is no spending cap (so someone can demand $10M worth of treatment) and 3) There are limitations on how fast premiums can rise (if they sign annual contracts).

        Also I think mega-corps could all self-insure and do better (at least for a while) since their staff would have to be well enough to work for the mega-corp.

        1. Mega-corps already do self-fund. Premium taxes, state mandates and insurer risk margins guarantee that just about every employer with over 1,000 employees enrolled in its health care plan is self-insured.

          None of this stops the cost of care trend from increasing at a rate twice that of inflation. Third party payment, whether it be private health insurance, medicare, medicaid or self-funded employer health plans, along with anti-competitive practices by physicians and hospitals, the plantiffs bar and onerous state insurance market regulations all work together to make health care excessively and increasingly so every year. Destroying private health insurance will only hurt (they actually keep costs down somewhat) not help.

  22. Well, P, they must be unusually inept rent-seekers, since in a good year they have margins somewhere south of 5%.

    I work on the provider side, so I carry no water for the health insurance companies, but "greedy profiteers" they ain't.

  23. R C, I think they expected their partners in Congress to coerce low-risk individuals to buy insurance from them, and increase those margins.

    Tinkering with the "insurance market" does not reduce the cost of HEALTH CARE. What they are really doing is providing price supports for doctors and hospitals. Deflation is baaaaaaaad!

    1. Yes, but as you say they are inept since individuals who spend little money on their own could always chose to spend quite a bit of someone else's when coerced into the system.

      Health insurers are special in that they wouldn't exist under pure socalism or pure captialism but only that worst-of-both-worlds known as social democracy and as such have no real supporters.

      1. Why wouldn't health insurers exist in a pure free market? Catastrophic health insurance has existed in this country for more than 100 years, or before the market-distorting effects of government intervention into the health care and health insurance markets.

  24. What they (Congress) are really doing...

  25. P, I'm not sure that the insurance companies wanted the mandate to increase their margins as much as to cover their losses from guaranteed issue. Guaranteed issue + no mandate = failed industry. There is a limit to high how premiums can go before people/companies just stop buying insurance.

    1. Not to nit-pick terms but the guarantee issue is not the same thing as no pre-existing condition exclusions or community rating. You need all three in a horrific combination, which Obamacare does, to get the perfect adverse selection spiral that will destroy the health insurance industry.

  26. Peter Suderman:

    How did the health insurers bring this on themselves. To point out that the Obamacare will raise the cost of health care beyond what is already expected, is not "bringing this on themselves". Someone has to stand up and explain a little bit about how health insurance works. Trying to save one's business is not asking for it.

  27. Everytime I see or here Schumer speak I have the sudden urge to scrub off in the shower. He is the filthiest slime in the senate...and that's not easily accomplished.

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