Why Does Everyone Bow Down to the Health Insurance Industry?

Bow your heads and raise the white flags. After facing down the Third Reich, the Japanese Empire, the U.S.S.R., Manuel Noriega and Saddam Hussein, the United States has met an enemy it dares not confront -- the American private health insurance industry.

With the courageous exception of Dennis Kucinich, the Democratic candidates have all rolled out health "reform" plans that represent total, Chamberlain-like, appeasement. Edwards and Obama propose universal health insurance plans that would in no way ease the death grip of Aetna, Unicare, MetLife, and the rest of the evil-doers. Clinton -- why are we not surprised? -- has gone even further, borrowing the Republican idea of actually feeding the private insurers by making it mandatory to buy their product. Will I be arrested if I resist paying $10,000 a year for a private policy laden with killer co-pays and deductibles?

It’s not only the Democratic candidates who are capitulating. The surrender-buzz is everywhere. I heard it from a notable liberal political scientist on a panel in August: We can’t just leap to a single payer system, he said in so many words, because it would be too disruptive, given the size of the private health insurance industry. Then I heard it yesterday from a Chicago woman who leads a nonprofit agency serving the poor: How can we go to a Canadian-style system when the private industry has gotten so “big”?

Yes, it is big. Leighton Ku, at the Center for Budget and Policy Priorities, gave me the figure of $776 billion in expenditures on private health insurance for this year. It’s also a big-time employer, paying what economist Paul Krugman has estimated two to three million people just turn down claims.

This in turn generates ever more employment in doctors’ offices to battle the insurance companies. Dr. Atul Gawande, a practicing physician, wrote in The New Yorker that ''a well-run office can get the insurer's rejection rate down from 30 percent to, say, 15 percent. That’s how a doctor makes money. It's a war with insurance, every step of the way.'' And that’s another thing your insurance premium has to pay for: the ongoing "war" between doctors and insurers.

Note: The private health insurance industry is not big because it relentlessly seeks out new customers. Unlike any other industry, this one grows by rejecting customers. No matter how shabby you look, Cartier, Lexus, or Nordstrom’s will happily take your money. Not Aetna. If you have a prior conviction -- excuse me, a pre-existing condition -- it doesn’t want your business. Private health insurance is only for people who aren’t likely to ever get sick. In fact, why call it “insurance,” which normally embodies the notion of risk-sharing? This is extortion.

Think of the damage. An estimated 18,000 Americans die every year because they can’t afford or can’t qualify for health insurance. That’s the 9/11 carnage multiplied by three -- every year. Not to mention all the people who are stuck in jobs they hate because they don’t dare lose their current insurance.

Saddam Hussein never killed 18,000 Americans or anything close; nor did the U.S.S.R. Yet we faced down those "enemies" with huge patriotic bluster, vast military expenditures, and, in the case of Saddam, armed intervention. So why does the U.S. soil its pants and cower in fear when confronted with the insurance industry?

Here’s a plan: First, locate the major companies. No major intelligence effort will be required, since Google should suffice. Second, estimate their armed strength. No doubt there are legions of security guards involved in protecting the company headquarters from irate consumers, but these should be manageable with a few brigades. Next, consider an air strike, followed by an infantry assault.