Health Insurers Try Appeasement

This is doomed to fail. I posted the other day on the omission from the Obamacare bill of language that would have supported Obama's promise that children with pre-existing conditions could not be denied insurance. Following the letter of the law the health insurers could have continued to deny coverage and been fully within the law.

Democrats threatened the industry, even though they didn't have a legal let to stand on, and it looks like the health insurers are going for appeasement:

In a letter to Health and Human Services Secretary Kathleen Sebelius, the industry's top lobbyist said insurers will accept new regulations to dispel uncertainty over a much-publicized guarantee that children with medical problems can get coverage starting this year.

Quick resolution of the doubts was a win for Obama — and a sign that the industry has no stomach for another war of words with a president who deftly used double-digit rate hikes by the companies to revive his sweeping health care legislation from near collapse in Congress.

"Health plans recognize the significant hardship that a family faces when they are unable to obtain coverage for a child with a pre-existing condition," Karen Ignagni, president of America's Health Insurance Plans, said in a letter to Sebelius. Ignagni said that the industry will "fully comply" with the regulations, expected within weeks.

I personally think this is a mistake on the part of the insurers. They would have to be completely naive not to believe that the ultimate goal of Obamacare is the destruction of their industry. Complying on a profit-killing measure just to buy the temporary good will of Henry Waxman is kind of like hoping the grizzly bear eats you last. Democrats hate insurance companies, and this little capitulation will buy the insurers absolutely no good will in the long term...and maybe even the short term.

Now it could be that the lobbyists are doing this to buy some favor knowing full well that some group or organization will end up litigating this on their behalf so they won't have to look like the bad guys.

But probably not. They've probably just caved to Congress for no good reason at all.