Why the health insurance companies did not oppose Obamacare

Diogenes writes:

I am a bit skeptical about the rhetoric about the health insurance companies going bankrupt (“By its built-in logic, Obamacare will cause the health care industry to go bankrupt within months”), mainly because for months I have been following an MD blogger who has been covering the HCR process.

His interpretation is that it was actually the health insurance industry that desperately wanted reform, because their business model is in the process of imploding. Obama’s mandate and the heavy regulation turns health insurance into a quasi-public utility. Public utilities have to take all comers, and cope with massive regulation, but they are guaranteed a specified rate of return.

This would explain why the public option fell by the wayside, and there was little uproar from the health insurance companies during the HCR debate. If true, it would also make repeal efforts more difficult, because the health insurance companies would work against repeal.

This post elaborates on this unintuitive but compelling argument:

Posted by Lawrence Auster at March 24, 2010 08:12 AM | Send