My buddy Tom Hamburger of the L.A. times, who already published an excellent story about the great deals the big drug companies had cut for themselves as a condition of backing Obamacare, now reports that the big private health insurers are in position to reap a bonanza and have played their cards so skillfully that lobbyists for other aspects of health care (including what one might call public interest aspects) are shaking their heads in amazement.

The basic deal seems to be this: The government will provide subsidies that will enable 10s of million of uninsured Americans to become new customers of the private health insurers (and let's just assume thateven in this complicated business, more customers means more profits).

The supposed tradeoff, a "public option" that would compete with the private insurers and press ure them to keep their prices down, seems to be less likely with every passing day.

A couple of key excerpts from Hamburger's story:

Lashed by liberals and threatened with more government regulation, the insurance industry nevertheless rallied its lobbying and grass-roots resources so successfully in the early stages of the healthcare overhaul deliberations that it is poised to reap a financial windfall.

The half-dozen leading overhaul proposals circulating in Congress would require all citizens to have health insurance, which would guarantee insurers tens of millions of new customers -- many of whom would get government subsidies to help pay the companies' premiums.

"It's a bonanza," said Robert Laszewski, a health insurance executive for 20 years who now tracks reform legislation as president of the consulting firm Health Policy and Strategy Associates Inc. Some insurance company leaders continue to profess concern about the unpredictable course of President Obama's massive healthcare initiative, and they vigorously oppose elements of his agenda. But Laszewski said the industry's reaction to early negotiations boiled down to a single word: "Hallelujah!"


"The insurers are going to do quite well," said Linda Blumberg, a health policy analyst at the nonpartisan Urban Institute, a Washington think tank. "They are going to have this very stable pool, they're going to have people getting subsidies to help them buy coverage and . . . they will be paid the full costs of the benefits that they provide -- plus their administrative costs."


In May, the Senate Finance Committee discussed requiring that insurers reimburse at least 76% of policyholders' medical costs under their most affordable plans. Now the committee is considering setting that rate as low as 65%, meaning insurers would be required to cover just about two-thirds of patients' healthcare bills. According to a committee aide, the change was being considered so that companies could hold down premiums for the policies. Most group health plans cover 80% to 90% or more of a policyholder's medical bills, according to a report by the Congressional Research Service. Industry officials urged that the government set the floor lower so insurers could provide flexible, more affordable plans.


"They have beaten us six ways to Sunday," said Gerald Shea of the AFL-CIO. "Any time we want to make a small change to provide cost relief, they find a way to make it more profitable."