While the health care debate has been consumed by the smoke and mirrors game on Capitol Hill, one big story is being overlooked: the Obama administration’s decision not to regulate—or even attempt to regulate—the insurance industry, led by AIG, the giant outfit at the center of the national financial collapse. Instead of curbing the power of these companies, Obama is proposing another one of his half-hearted solutions. This time, it’s something called the Office of National Insurance, to be stuck in a corner of the Treasury Department. This new contraption is meant to “monitor’’ insurance—but can’t get involved in setting rules or regulating the business.
The insurance industry is a key obstacle to real health care reform. Medicare’s Plan D drug program is run through insurance companies, and all efforts to kick them out of Medicare have failed.
Right now, insurance is currently regulated by the states. The only way to rein in these companies is to bring them under federal regulation. But over the years, key lawmakers—first Connecticut senator Tom Dodd and now his son Connecticut senator Chris Dodd—have acted as gatekeepers who got oodles of campaign contributions from the industry and kept government regulators away.
So what kind of concession did Obama get for going easy on insurers? Probably an agreement not to block the ever-weaker health care reform on the Hill.