The President takes a direct aim at the insurance companies: Obama Threatens Insurers? Anti-Trust Exemption - NYTimes.com
A couple of things come to mind. First, is repealing the McClarren Act a bad idea? It gives the insurance companies and anti-trust exemption but it also gives the states power to regulate insurance. The latter was the justification for the former. If you repeal the former provision aren't you going to also repeal the latter? Surely you are not going to demand both the insurance companies be regulated by at the state level and that they not cooperate with one another across state lines? That would be impractical. It would be like taking the banking system and breaking each bank into 50 separate companies, no? That would be inherently unstable certainly?
Moreover, isn't this just a bit too Chicago style? I mean, we are debating a major change in policy because the insurance companies would not play ball in backroom negotiations? That just seems a bit bare-knuckled. It seems to undermine democracy. We are having a policy debate and if I don't like what you say in public about the bill we are going to change the policy in a way that hurts you--will that really wash? People don't have much sympathy for insurance companies but they can imagine themselves in their position. Say the next policy is something that affects the funeral directors of used car dealers' association and unless your Washington representatives agree to come out holding hands and talk happy talk at the press conference with His Oneness we are going to change the law to hurt you guys...that is something people can see themselves on the receiving end of.
The insurance companies released a study the administration doesn't like and suddenly they are a public enemy singled out by the commander and chief--sounds a bit too cultish to me. When Roosevelt did it he was careful to do it with humor--we save the guy from drowning and now he is complaining that we left his top hat in the water. It feels like he has called us peasants out to storm the castle with our pitch-forks. Do you put the American people in the roll of peasants?
The study's conclusions are debatable and almost surely over drawn, but they are legitimate and any close examination of them will, as Paul Krugmann admits in his treatment of the subject in yesterday's NYTs, bring out that the administration's assumptions (or the Baucus bill's assumptions) are also implausible. If the insurance company's assumption of %100 pass through is implausible then surely the Democrat's assumption of %0 pass through is equally implausible. When you pick a fight like this you have to be dead-right, not just 51-49% compared to the other guy.
This debate might even work to the insurance companies' advantage on policy grounds. The administration has made its argument on the basis of increasing competition. That is why we need the public option. But when asked why, if they want to increase competition, don't they just let people buy their insurance from a national instead of a state market? The administration has never had a good answer for that. Axelrod looked particularly feckless in a recent exchange with Wolf Blitzer. Bringing this issue up seems to invite a repeal of the state regulation issue. It seems hard to argue for repealing one half of the McCarran-Ferguson Act without repealing the other.
Finally, McCarren: he was the guy that Senator Pat Geary was modeled after in the Godfather. That has to be a good reason to repeal the thing.
Here is a link to RedState.com where they have posted the Obama address. It is really a bit creepy. "We" have reached a "bipartisan" consensus but "They" are trying to stop us.
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