Jay Ambrose: Demonizing America's 86th most proftable industry

When Rep. Henry Waxman, D-Calif., and a sidekick decided to intimidate CEOs in the health insurance industry, it wasn't just another instance of shabby politics, but an imperious, anti-democratic abuse of power, an attempt to put the fear of the almighty federal government in the hearts and minds of American citizens.

The ostensible message in 52 letters sent to industry executives was that the House Energy and Commerce Committee wanted a list of all those making $1 million a year or more in recent years, plus information about conferences and other get-togethers off company property.

The real message? Something like this: We stand ready to embarrass you before the nation, and while this is a request, not a demand, you gather what could come next, don't you? Subpoenas. Hearings. The whole caboodle.

To its credit, the industry responded through a spokesman that Democrats on the committee were trying to "silence the health industry." After all, there had been TV ads about the perils of a new, government-run program that would compete with the private companies, and who could know how influential the ads were with the increasingly large number of people telling pollsters they had serious doubts about what the Democrats were up to.

Interestingly, the industry had earlier been meowing like a kitten about many of the reform proposals, and why not? The Democrats were saying everyone had to sign up for insurance - everyone.

Although a subsidized public plan might eventually replace the private industry, the immediate prospect was for tens of millions of new customers and billions of new dollars. Then, following clear public anxiety about reform, Obama and the rest of his D.C. gang decided they needed someone to demonize. Health insurance industry, please step forward.

This ploy may have seemed, and may yet prove to be, sound. Even though polls show most people are reasonably happy with their insurance protection, many of us have faced the aggravation at one time or another of doing battle to get payment for a treatment. We have then heard how the industry makes incredible profits and mistreats people with pre-conditions, and we may figure it's a bad bunch.

This ploy may have seemed, and may yet prove to be, sound. Even though polls show most people are reasonably happy with their insurance protection, many of us have faced the aggravation at one time or another of doing battle to get payment for a treatment. We have then heard how the industry makes incredible profits and mistreats people with pre-conditions, and we may figure it's a bad bunch.

Things are seldom so simple. Because of state mandates and a long list of reasons reaching back to World War II, the health insurance industry has been distorted from being ordinary insurance companies that pay off after unforeseen emergencies to something that pays for practically everything once deductibles are done.

If you have house insurance, you don't figure on receiving the money for routine maintenance, but to pay for a misfortune out of the blue - when the house burns down, for instance. It would be unthinkable to try to get house insurance to cover that "pre-condition" only after the fire.

Net profits are not enormous, just 3.3 percent, making the health insurance industry 86th among all industries, according to economist Mark Perry of the University of Michigan.

Gradual conversion to individual-based instead of employer-based insurance could solve many of the problems, but what would not solve any of them more than temporarily would be a public plan coming on top of Medicaid and Medicare. Those entitlements already face obligations the government can't pay without wrecking the economy. Come the day of no private insurance, it will be worse.

Now that a political slap in the face has possibly awakened the insurance industry from its shortsightedness about a future under "reform," it should fight all the harder, and the public should pause to consider how likely it is that public-policy wisdom will come from men who think it OK to crassly intervene in the exercise of free speech.