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Did AHIP Just Empower the Left?

Activists on the left have long insisted that insurance companies aren’t to be trusted. But up until now, it's been hard to make the charge stick, since the insurance lobby--a.k.a., America's Health Insurance Plans--has been cooperating with the White House and its allies. 

AHIP's new paper, though, may have changed things. In the last day, the specious claim that reform would raise premiums has provoked a fast and furious response, uniting everybody from the White House to AARP against a common foe. And that unity could have policy implications. 

Just last week, for example, Nancy Pelosi floated the idea of imposing a “windfall profits tax” on private insurance companies to help pay for reform. The details have yet to be hammered out; once they are, conservatives are sure to argue that insurers are going to pass the tax along to consumers. But the health insurers, who've never been popular with the public, may now have a particularly tough time pressing their case. “AHIP did not make too many friends through the issuance of this report today,” Ron Pollack, executive director of Families USA, told me. “Ironically with AHIP’s report today may make it more likely that such a windfall profits tax would be included in the final legislation."

AHIP may also have boosted prospects for the public option. “In a strange way, and look, obviously they didn’t mean this, the health insurance lobby today fired the most important salvo in weeks for the public option,” Rep. Anthony Weiner wrote today on his website, as Daily Kos noted. “Left to their own devices, according to their own number crunchers, they’re going to raise rates 111%.” As Congress makes its final push to tackle the public option conundrum, more pro-public plan legislators will doubtlessly be using the report as new ammunition.

That’s not to say that either the White House or the Democratic leadership has entirely abandoned the practice of making deals with industry stakeholders. Their cooperation remains a prerequisite for getting key votes on board. But if the private insurers continue their frontal attack on reform, the populist backlash against them is likely to grow.