Why is health care reform so hard?

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imagine you are a health insurer. how would you go about business?

let's look at the market: demand is insatiable. don't we all crave to be at our best health imaginable? when an illness threatens our lifestyle or even life itself, aren't we prepared to pay any price? especially if it's not our money we're spending... at the same time, supply of care limited is due to cost and man-power. sweet! health care is a prime example for a tragedy of the commons, ripe for some enclosure action.

meanwhile, what is happening in politics?

although it is an open secret, no-one wants to hear that health care is limited, which is why any attempt to put this into plain words has met with angry responses with no regard for the facts.

while holding a supermajority, democrats seemed to want to appease the republican minority by giving up the public option, along with an endless string of other health care concessions.

at the same time, the right is asking democrats to show even more bipartisanship or just abondon reform altogether.

how come?

let's once more picture you as a health insurer. you get to internalize revenue from the employed (kthx), "externalize" costs from the elderly and poor through medicare and medicaid (phew!), while retaining the privilege to get rid of the costly, by managing to rescind contracts with half of the chronically ill (yesss!).^* you can do anything, short of causing civil unrest. infinite demand, high prices and throngs of customers left behind? i smell an oligopoly. right now, doing business in the US is a health insurer's dream. perfection. that means, any changes to the system whatsoever would increase costs for insurers and lower their margins.

now getting majorities requires negotiations. but there is nothing that insurers and the politicians they fund want in health care reform that reformers could trade in for things they want in it.^**

in the age of profit maximization irrespective of the consequences on society, the way to maximize profits for insurers is to keep everything just the way it is. this is why we have been hearing "no", "no", and "no" to meaningful reform from senators funded by the insurance industry (most if not all R and a fair number of D).

there is a way out. Bush passed his agenda with budget reconciliation and so can Obama.

knowing that, there are two options for democrats:

1. push through health care reform with maximum impact, taking effect asap, and hope that voters see the positive effects so clearly that they won't allow republicans (who haven't made themselves known for bipartisanship under Bush) to reverse it next time it is their turn, or


2. pass a toothless, helpless paper that does not change anything or even worsens voters' plight, and lose many elections to come like the lame duck majority that would make them.

^*the economic basis of record health insurance profits

1. internalizing revenue any money coming in the healthy, working insured are pure profit. they are internalized, i.e. made the insurance company's own.
2. externalized cost from elderly and poor the aging and poor need more costly healthcare, due to age-related, diet-related, and general life-style related illnesses. late onset diabetes and intestinal cancer from poor diet, lung cancer from smoking, heart disease from both, are only the most common illnesses that are more prevalent in these groups. private health insurers have, through medicare and medicaid, no part in these costs, which are therefore externalized to them, as they are paid by the community of tax payers.
3. rescission this should be a household word, as it characterizes the current malaise of health care like no other. as described elsewhere, insurers use excessively complicated forms to provoke erroneous applications that allow them to terminate the insurance of many of their customers. of course, they do not do this for those customers that make them money. only once a customer develops a chronic illness, the application is revisited and errors are found. this has allowed insurers to get rid of as many as one in two of their chronically ill customers! even before going for termination of the contract, many well-known cases show that insurers will use any pre-existing condition, however unrelated, as an excuse to deny coverage.
   in plain english: private health insurers suck you dry while you have a job and you are healthy but they deny paying for your treatment or outright dump you when you need them most.

^**not even tort reform. everyone, including republicans, knows that tort only accounts 1% of healthcare premiums. health care costs need to be at least halved to be on par with other developed countries though (let alone expanding coverage). so demands for tort reform are just a spanner thrown into the works of health care reform.