Health insurers overplay their hand; Republicans on notice

14 October 2009

Late yesterday afternoon (US time) the Senate Finance Committee voted out the health care reform bill 14 votes to 9, with Senator Olympia Snowe voting with the Democrats to support the bill and give it critical momentum.

Senator Snowe said of her critical vote: "When history calls, history calls, and I happen to think that the consequences of inaction dictate the urgency of Congress to take every opportunity to demonstrate its capacity to solve the monumental issue of our time."

A fascinating sidebar to this was an unexpected attack on the Senate Finance bill from the health insurers. Last Sunday America's Health Insurance Plans (AHIP) released a report which found that insurance costs would rise faster under the proposed legislation than if nothing was done. It appears that this last minute torpedo from a group which has previously supported health care reform comes because the insurers want to see stronger mandates to purchase cover. (The Senate Finance bill is estimated to cover 94% of legal residents; the House bill will cover 97%.)

However the AHIP report has been seen as a cynical overplay by the very industry whose practices have driven the need for health care reform. It's been a strategic blunder for them, and ironically has increased Democrats' support for a public health insurance option. PricewaterhouseCoopers who did the report for AHIP are backpedalling frantically.

While House and Senate leaders work to get bills ready to take to the floor of each chamber within the next two weeks, recent data and analysis highlight the variations around the nation in who has health cover and the political dilemma faced by the politicians who represent these Americans.

If the states of America are divided into red (states that have two Republican Senators and voted for McCain in the last presidential election), blue (states that have 2 Democratic senators and voted for Obama) and purple (states that split their ballots in the presidential and senate elections), then residents of blue states are far more likely to have health insurance than residents of red states, with residents of purple states in the middle.

These data are based on both private and public cover, including Medicaid, but exclude Medicare which is available to virtually everyone over 65.

Of the 150 congressional districts with the most insurance, only three are in red states - one each in Alabama, Tennessee and Kansas. Another 25 are in purple states. The remaining 122 are in blue states.

However while the uninsured are more likely to be in red states, those with the least access to insurance are in minority blue districts in these states. Of the 10 congressional districts with the least insurance, seven are in Texas (red), two in California (blue) and one in Florida (purple). However nine of these districts (which are largely black or Hispanic) are represented by Democrats.

Thoughtful Republicans keen on getting re-elected thus face an exquisite dilemma in the upcoming votes on health care reform legislation: will they represent the needs of the people of their electorate or their ideology of their party?