The More AHIP Concedes, The More Proof A Public Plan Is Needed

Ever since Barack Obama took office, the America's Health Insurance Plans have been steadily conceding ground in hopes of killing off a public health insurance option. For years the cost of health insurance has been growing dramatically, the number of uninsured has skyrocketed, and out-of-pocket costs are going ever upwards. While all this has been happening, the private health insurance companies have done nothing to slow the explosion in cost. They did not put forward a serious plan to address the number of uninsured. And they refused to stop cherry picking customers, overcharging women, and fighting claims.

All this changed when it appeared that they might face real competition from a public plan. They first promised to accept all comers. Then they promised to stop charging sick people more. Recently, they promised to stop charging women more than men. And today, they promised to slow the increase in cost by introducing reforms that should have happened years ago.

As long as the health insurance companies fear facing real competition, they will continue to concede. That is how competition works: it forces companies to cut costs and/or increase the quality of their product. Once the public health insurance plan is officially killed, they will stop conceding. Companies only change when they know not changing will hurt their bottom line.

The public plan is already working and is needed so it can continue to improve health care for everyone. If there is no public option, the health insurance companies will soon return to their old tricks. They are still claiming that they should be able to set rates based on “geography.” Being able to charge people more based on “geography” will allow health insurance companies to redline low income, African-American, and/or Hispanic neighborhoods.

This needs to be clear: The only reason the health insurance companies are playing nice is because they fear real competition for the first time. They will only play nice as long as they face real competition from a public health insurance option. If there is no public plan, in the long run, there will be no meaningful reform.