Do Insurance Companies Want To Give Congress A Reason To Bring Back The Public Option?

Bill Scher

The NY Times reports today that insurance companies are prepared to interpret the new health care law so they can deny coverage to children with pre-existing conditions between now and 2014.

Insurers are daring to do so even though congressional leaders have made clear such a loophole was not their intent, and the White House preparing implementation rules that would clarify the legislative language and prevent such discrimination.

If the insurance industry actually follow through with this threat, it would be a display of astounding stupidity.

No one is disputing that the law’s language outright bans all discrimination based on pre-existing conditions, for children and adults, in 2014. So all insurance companies would gain by flouting federal government rules is a mere three years of freedom from the oh-so-terrible burden of helping sick children.

But what they would lose is their reprieve from the public health insurance option.

To secure votes from progressive Senators for the compromise health care bill, Senate Majority Leader Harry Reid promised to hold a vote on creating a public option “in the coming months.”

The Senate may well choose to wait on holding such a vote, and see how to insurance industry reaction to the first round of reforms. Does it eagerly help implement the reforms following the spirit and intent of the law? Or does seek to wriggle out of the new rules on disputed technicalities?

If insurers seek to escape the new rules, they will confirming the main contention of the public option advocates: that regulations are not enough, and only competition from a stern public option can change insurance company behavior.

Insurance companies feeling proud of themselves that they beat back the public option may not want to get too cocky this early.

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