Can the government and the insurance industry work together?
Posted on Thu, Jun 10, 2010
For medical insurance reform to succeed, the insurance industry and government must work together. For years, the two have been on opposing sides of the debate regarding how to provide affordable quality medical care. Now, they are finding that both of their futures hinge on them getting along and agreeing.
The financial future of the medical insurance industry lies within the hands of the government. With regulations that will be imposed on the medical insurance industry written by the government, and hundreds of billions of dollars in government subsidies being given to the insurance companies in order to cover low and middle income people, the medical insurance industry is at the government's mercy.
Likewise, Obama's political future and his Congressional Democrats political futures depend on their ability to come through on their promise to voters, by controlling medical costs and making affordable medical insurance available to everyone. However, for medical reform to succeed, they need the cooperation of the medical insurance companies.
If medical insurance companies cannot offer medical insurance to Americans at an affordable price, many Democrats will once again push for a government-run medical plan, or public option, to battle against private medical insurance companies.
Yet, if medical insurance premiums continue to climb, the Obama administration could blame the medical insurance industry. However, Republicans could then very well claim vindication of their belief that ObamaCare is deeply flawed, and does not solve the core issue, which is the rising cost of medical care.
Meanwhile, medical insurance companies are starting to implement a new business model. Like a public utility, they will be highly regulated. In 2014, they will no longer be allowed to decline applicants due to their medical history, and must approve all applicants for medical insurance coverage.
What's ironic is that for the past few years, the Obama administration has beat up the medical insurance industry, conveying their distrust in the industry. Yet in just a few short years, they are telling everyone that they have to buy insurance from this same industry that they vehemently distrust.
The medical insurance companies have quite a challenge ahead of them...the expectation of them is to provide additional medical benefits while not significantly increasing premiums. Some immediate additional benefits that they have to provide this year is to offer coverage to kids under the age of 19 with pre-existing medical conditions, and to allow kids up to the age of 26 to remain on their parents' polices. Also, lifetime limits and unreasonable yearly limits on certain medical benefits will be abolished.