Now Insurers Back Health Care Reform?

| Thu Mar. 25, 2010 2:13 PM EDT

After vehemently opposing the Democratic health care plan, insurance companies are doing an about-face. The industry’s main trade group, America’s Health Insurance Plans, has announced that it will join Enroll America, a new non-profit devoted to registering those people who will newly qualify for insurance subsidies or Medicaid under the law.

After spending massive sums in an attempt to defeat the bill, why are insurers suddenly eager to help the reforms succeed? "It’s good business for them," says Families USA's Ron Pollack, who is heading up the Enroll America effort. “All of them will benefit from a business plan standpoint to extend coverage." He adds that pharmaceutical companies and hospitals have also expressed strong interest in joining the coalition, along with pro-reform advocacy groups already committed to helping the uninsured.

The Affordable Care Act is expected to insure some 32 million new Americans. In fact, the promise of new customers had originally convinced industry groups to support reform. But insurers turned against the bill after Democrats decided to weaken the individual mandate to purchase insurance and to toughen insurance regulations. 

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In truth, the Democratic reforms were never as punishing to the insurance industry as AHIP (or the Democrats themselves) made them out to be. The government-run public option—private insurers’ biggest bugbear—never made it into the final bill. Neither did the repeal of the anti-trust exemption for the industry. The excise tax on high-cost insurance plans got scaled back significantly in the reconciliation fixes.  

Now that the political frenzy surrounding health care reform has started to settle down—with even some Republicans admitting the benefits of reform—it’s not surprising that the bill's onetime opponents are suddenly willing to co-operate. In fact, it makes more sense for industry groups to do so—not only because reform is now inevitable, but also because they’re hoping to blunt the impact of the Affordable Care Act’s most far-reaching regulations.

The Chamber of Commerce has said that it intends to challenge the law's beefed-up insurance regulations. Pharma will fight to exclude drug coverage from the rulings of the newly strengthened Medicare Payment Advisory Commission, whose authority will be key to keeping costs under control. And unlike the GOP push to repeal the bill outright, such lobbying efforts may actually have some chance of success—especially if the key players are now willing to play ball.