And Say, Do You Want To, Make A Deal?

Ultimately, I do believe that universality is a key to driving down costs in the health care market. But you can definitely take it as a sign that an individual mandate may not be the way to go when the insurance industry is asking for it.

WASHINGTON — The health insurance industry said Wednesday that it would support a health care overhaul requiring insurers to accept all customers, regardless of illness or disability. But in return, the industry said, Congress should require all Americans to have coverage.

The proposals, put forward by the insurers’ two main trade associations, have the potential to reshape and advance the debate over universal health insurance just as President-elect Barack Obama prepares to take office.

In separate actions, the two trade groups, America’s Health Insurance Plans and the Blue Cross and Blue Shield Association, announced their support for guaranteed coverage for people with pre-existing medical conditions, in conjunction with an enforceable mandate for individual coverage.

What's important here is what's missing, as Ezra Klein notes. If you are forced to buy health insurance and the insurers won't make it affordable, that's not really a positive for the individual. Guaranteed issue must be combined with community rating (baseline insurance at the same cost for everyone in a community) for the mandate to work. And that's not what the industry is proposing.

I e-mailed Robert Zirkelbach, AHIP's spokesman, to ask if this proposal had a community rating provision:

"the proposal we issued yesterday was for guarantee issue combined with an individual mandate.

We also need to take steps to ensure coverage is affordable for all. There needs to be an adequate safety net and we should provide tax credits to low and moderate income workers. We also have to address the key medical cost-drivers that drive up the cost of coverage."

In other words, no. At least not yet.

Not to mention the intimation that they'll keep raising their rates and let government pick up the bill through tax credits.

Considering that the insurance industry is a useless, inefficient middle man that does practically nothing to make people more healthy, I don't think they should be in the business of making ultimatums. But the fact that they're at the table means that they know change is coming and they had better try to get something out of the deal than scuttle it. Hopefully, their attempts at negotiation will be met with hardline opposition unless they capitulate on price.

We have a long way to go on health care reform, and there are a lot of elements we need to make sure are included (public option and a mandate that insurers pay a hefty amount of their premiums on treatment being at the top of the list). But more than anything, this is an acknowledgement by the insurance industry that they're going to have to make a deal.