Insurers Spin Court Decision on Health Insurance Mandate

Wendell PotterWhen I testified before Congress last year, I told lawmakers that if they passed a health care reform bill with an individual mandate but no public option, they might as well call their bill the "Health Insurance Profit Protection and Enhancement Act." Well, of course, that is exactly what Congress did, but they didn't change the name of the new law as I suggested. I was as upset as anyone that the public option was stripped out, but I nevertheless later said that Congress should still pass the bill because of the protections it contained against common predatory practices by insurers, like canceling breast cancer patients' insurance in the midst of treatment and refusing to sell coverage at any price to people with pre-existing conditions. The bill also expands Medicaid to encompass several million Americans who cannot afford to buy overpriced and often inadequate health insurance.

I have no doubt the insurance executives I used to work with were doing high fives when the public option bit the dust, and their favorite part of the bill -- the mandate that will require us to buy their insurance products if we're not eligible for an existing public plan like Medicare, Medicaid or the VA program -- became the law of the land.

After the ruling by the judge in Virginia that the mandate to purchase health insurance is unconstitutional, however, I'm sure my old buddies who are still in the industry are downright apoplectic. As I noted in my essay in Newsweek last month, the insurers, and the Republicans they helped to elect to Congress, have a real dilemma on their hands. The Republicans led voters to believe that the new health reform law represents a "government takeover" of our health care system (it certainly does not, not by a long shot) and promised to "repeal and replace it." Several politically-ambitious GOP attorneys general (and one Democrat) filed lawsuits challenging the constitutionally of the individual mandate so prized by the insurers. Now that the Virginia judge has sided with those AGs and other plaintiffs, the insurance industry flacks (like I used to be) are now spinning in overdrive.

Check out the Bloomberg story about the judge's decision. The headline alone says it all: "Lack of Health Mandate Would Lead to Skyrocketing Costs, Insurers Say." Read it if you're interested in seeing how the insurers are spinning this story, and how they will continue to spin it until Congress and the Republican-appointed judges drop their charade of dismantling the new law. What they really want to accomplish, and what consumer advocates need to keep an eye on, is having Congress figure out how to strip out the new regulations and consumer protections in the law. That's what they don't like. Why? Because Wall Street doesn't like them. Investors are afraid that if insurers have to play fair for a change, they won't make as much money. They have enjoyed skyrocketing profits lately, especially this year. The prospect that a reform law would include decent consumer protections but no individual mandate scares the bejesus out of them. Hence, the spin that we are in for skyrocketing health care costs if the Virginia judge's decision is upheld.

The thing to keep in mind is that, despite the headlines and hype, this is just one judge's opinion. Others have gone the other way. We are a long way from knowing if, and how, the new health reform act will ultimately be implemented.

Watch this space.


This article seems more about telling us how important Mr Potter is, then giving us some solid data (doesn't even bother to link to a pdf of the judges decision, which is actually written in a manner that the avg person can follow the judges argument)

Mr. Abram's remark is emblematic of what makes blogs so often a waste of time to look at. The Virginia judge's ruling is available in many places. If the judge's opinion is 'written in a manner that the average person can follow', that may be because judges have a habit of carefully arguing in a way that suits one interpretation of the law, in this case the Commerce Clause. Unless you happen to know (which you do not claim to do) the very long, and extremely technical history of judgements on the Commerce Clause, you can read the judge's opinion all day long and still have no idea of what's really going on. Mr. Potter's inside knowledge of the health insurance industry does give him credibility not all of us 'average people' can claim about what's at stake in the health care reform debate. Grow up already.

The principal concept of insurance was to pool premiums collectively into a fund from which contributors can withdraw costs in the event of sickness or ill health, which is covered in terms of the policy conditions stipulate. What we now have is insurance that is profit orientated. Gone are the days when insurers were none profit organisations (Mutual Companies)and premiums were adjusted to cover the collective costs of claims and administration etc. Now we are all paying for correct and incorrect claims and the greed of shareholders et al.

The prospect of a reform law with consumer protections and no mandate scares the bejeesus out of *me.* I'm self-insured and will be looking at a premium increase of up to 60% (that's what happened in Massachusetts before their mandated insurance) to go along with the subsidy I already pay to people with employer-based insurance. I support the protections and am even willing to pay for them, but fair is fair. Remove the mandates and Congress will kill the protections. But Republicans should be careful of what they wish for. If the SC guts the Affordable Care Act, Democrats will wash their hands of health care reform and it will become a Republican issue. More and more people become underinsured and uninsured until there's a political critical mass, and those people will blame Republicans for their plight. And the Republicans won't have a credible response. I invite you to check out HealthMatters at

Insurance companies have this down to a science. They have their rating system set up by zip code. Use their computers to track claims and medical cost by geographic location. The only way to have not for profit coverage is to have a Federal program that crosses all state. Medicare is a good example of this. Most people pay one flat premium regardless of where they live in the US. When you buy your medi-gap coverage the premium (set by insurance companies in most cases) vary by location. I advocate Medicare for all.

Dear Mr. Potter, A friend of mine was recently informed that he can no longer carry his step-son on his insurance plan and I'm surprised by the news. His step son recently turned 18, is a senior in high school, but was not adopted by him at the time he married the boy's mother. The insurance company previously was willing to allow coverage to be extended to all children of legal spouses living in a household or enrolled in school. My question was did the law really fail to comprehend the challenges of non-traditional households when defining children? Can this be fixed by Dept of Health decree or will this require now an act of congress? Thank you, -- Thom

in the absence of democracy, what purpose is served by this discussion? if you are not an official of the government, your political status is 'serf.' in a nation with citizen initiative, aka democracy, you need information so that your vote is directed toward your goal. in america, voting for 'a' or 'b,' is the only choice you have to influence all your concerns, and effectively you may well find yourself voting against your personal goal, because your 'choice' was bought by the other side. so i suspect this is displacement activity, a kind of 'cargo cult' politics.