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Senators Mobilize to Protect Insurance Industry from Competition

By Matthew Yglesias on June 30, 2009 at 2:25 pm

"Senators Mobilize to Protect Insurance Industry from Competition"

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Olympia Snowe (R-ME) and Mary Landrieu (D-LA)

Olympia Snowe (R-ME) and Mary Landrieu (D-LA)

Olympia Snowe is open to a compromise on a public option, but she wants a “trigger” mechanism in order to protect private health insurance firms from the threat of “unfairly” needing to compete with cheaper alternatives:

In an Associated Press interview in Portland, Snowe said it would be unfair to include a government-run health insurance option that would take effect immediately.

“If you establish a public option at the forefront that goes head-to-head and competes with the private health insurance market … the public option will have significant price advantages,” she said.

A significant price advantage is, of course, a good thing if you’re interested in delivering quality affordable coverage to everyone. Cheaper is a good thing. But not to Senator Snowe. As Chris Bowers says “It is pretty amazing that many moderates and industry figures are actually arguing that the problem with including a public option in health care reform legislation is that a public option would lower the cost of health insurance.” Unfortunately, it’s not just a handful of moderates. The more liberal of the two Senate committees working on health reform has come up with a weak public option that would do some good but ultimately lack significant cost advantages over private insurance.

It’s worth noting that in Maine (see PDF) 78 percent of the insurance market is controlled by a single firm, WellPoint.

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