Political Hardball

If you are going to punch a guy, you may as well try to knock him out. That old adage seems to be the central lesson of the recent, ill-fated effort by America’s Health Insurance Plans to impact the health care debate.

When a report financed by AHIP surfaced on the eve of the Senate Finance Committee’s vote on the America’s Healthy Future ACT, it was no doubt intended to be another arrow in the quiver of those opposed to the legislation. However, after questions arose about the report’s methodology and the impartiality of New York-based PricewaterhouseCoopers, which produced the report at AHIP’s request, that arrow became a club that proponents of the legislation used to bludgeon not just AHIP, but the health insurance industry as whole.

“Quite frankly, the insurance industry ought to be ashamed of this report,” Senate John Kerry (D.—Mass.) said as the Committee debated the bill. “It’s a powerful argument why we ought to have a public plan. The report is significantly flawed and the results are not valid.”

Indeed, the upshot of recent efforts by the insurance industry to channel the health care debate has been to paint a brighter target on its back and possibly bring the wrath of legislators down upon on the entire industry, not just health insurers.

Indeed, the once remote chance of insurers losing their long-standing antitrust exemption is looking less remote these days. A bill currently introduced in the House, H.R. 1583, The Insurance Industry Competition Act of 2009, would essentially gut the McCarran-Ferguson Act. It should surprise no one that one of bill’s sponsors is Rep. Gene Taylor (D—Miss.). Taylor, whose district includes coastal communities pummeled by Hurricane Katrina, has been one of the property/casualty industry harshest congressional critics in recent years.

Now, with a great deal of time, effort and political capital invested in reforming health care, health insurers are receiving their dose of opprobrium. Steaming over the AHIP report, Sen. Charles Schumer (D.—N.Y.) accused the industry of a throwing a last-second sucker punch to derail reform and suggested attaching antitrust repeal to any reform legislation.

“The health insurance’s antitrust exemption is one of the worst accidents of American history,” Schumer said in a statement. “It deserves a lot of the blame for the huge rise in premiums that has made health insurance so unaffordable. It is time to end this special status and bring true competition to the health insurance industry.”

While heated words are not immediately translated into direct legislative action, insurers likely ignore them at their peril.