Actually, it's only part of why we need it. At the Wonk Room, Igor Volsky has obtained a letter sent from AHIP's Karen Ignagni to Baucus, thanking him for his bill, and expressing concerns. It's worth reading the whole thing, to see just how duplicitous the private insurance industry is, but here's the part that's particularly telling:
- Benefit Flexibility To Allow Insurers To Design Policies That Attract Healthier Enrollees: "This means that benefit packages should give consumers flexible options to meet diverse needs and be aligned with the level of premium subsidies provided by Congress, and that the coverage requirement needs to avoid creating incentives for healthy people to forego the purchase of coverage," Ignagni writes. The letter also expresses concerns about the new national benefit standards.
In other words, insurers want to design packages that attract healthier applicants and deter "enrollment by those in poorer health." "For example, insurers could offer a benefits design that omits or severely limits services needed by people with serious medical conditions, while offering richer benefits in other areas such as vision care or health-club memberships." Well-defined standard benefit packages could preclude the industry from slowly moving everyone into high deductible policies.
Anybody who truly thinks that the health insurance industry is going to be constrained by any kind of regulatory framework is dreaming. They are going to continue to cherry-pick and they are going to continue to deny those who most need care. This communication from Ignani is as clear a demonstration of that as you can ask for.
Market reforms and regulation are not going to be adequate to make insurers do their job of actually insuring everyone, and doing so affordably. It just ain't going to happen outside of a the creation of a government plan to compete.