The battle between politicians and insurers is not over

A CASUAL observer could be forgiven for thinking that the long and bloody battle over health reform in America was over. After all, despite a year of hostile lobbying by the insurance firms, the Democrat-controlled Congress approved sweeping changes to their industry in late March. Yet the skirmishing continues. A recent press report claimed that WellPoint, a big health insurer, was targeting breast cancer patients for “rescission”—that is, cutting off sick patients over technicalities such as improperly completed paperwork. First the secretary of health reprimanded the firm; then on May 8th Barack Obama himself appeared to do so as well. That led a furious Angela Braly, WellPoint’s chief executive, to fire back the next day, denouncing him for repeating “false information”.

What is going on? In part, the administration is demonising insurers in an effort to transform the new health law from an electoral liability into an asset. The industry has not helped itself much on this front. For a start, the lavish salaries earned by the industry’s bosses make it easy to paint them as fat cats. Public outrage has also been stoked by insurers’ attempts to win regulators’ approval for huge rate increases for certain types of customers. Anthem Blue Cross, the Californian division of WellPoint, tried to raise the price of some policies by nearly 40% a year. The uproar this provoked only grew when a state-appointed actuary concluded that the firm’s justification for the hike was bogus. Several investigations of different insurers have since been instigated on similar grounds. …