Insurance Racket
The president needs insurers, and also needs to blame them. Will the relationship survive?

President Obama meets with insurance industry executives at the White House.


Andrew Stiles

Insurance-company CEOs met with President Obama at the White House on Friday for what presumably was an awkward conversation about the latest wrinkle in their close four-year relationship.

The administrative “fix” to Obamacare is less a substantive policy solution than an effort to shift public outrage over the president’s “incorrect promise” away from vulnerable Democrats and onto the very insurance companies whose cooperation is vital to the law’s success.

The next several weeks will provide a key test for a complicated relationship dating back to 2009, when the health-insurance industry became an early backer of the Obama administration’s reform effort — somewhat ironically, given the relentless public flogging they received in that fight from the president and his Democratic allies.

But by coming to the table and playing nice — and spending millions of dollars to lobby lawmakers — the insurance industry managed to secure a fairly lucrative arrangement. Millions of Americans would be compelled by law to purchase their products. The federal government would pony up almost half a trillion dollars of taxpayer money to subsidize the purchase of health insurance, which will go straight into insurers’ pockets. On top of that, if the law worked, many of those government-mandated customers would be ideal clients — young, healthy people unlikely to require expensive care and insurance-company payments.

“Their interests are aligned with our interests in terms of wanting to enroll targeted populations,” a senior White House official told Politico last week. “It is not that we will agree with everything now either, but I would say for some time now there has been a collaboration because of that mutual interest.”

Earlier this year, it was revealed that Health and Human Services secretary Kathleen Sebelius may have sought to exploit this symbiotic relationship by illegally soliciting donations from insurance companies for Enroll America, a 501(c)(3) nonprofit group dedicated to maximizing Obamacare enrollment.

The law’s disastrous rollout, however, is beginning to strain this tentative alliance. The president himself has thus far refrained from directly attacking the insurance industry, but the initial White House response to the uproar over mass policy cancellations — something Obama repeatedly pledged wouldn’t happen to anyone — was to insist that Obamacare had nothing to do with it, implicitly faulting the insurance companies that canceled the policies (to comply with Obamacare).


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