I've been following the health insurance debate, and I thought that writing about it might help me get a better understanding of what's happening.  At this very minute, the U.S. House is in session debating whether to approve the latest version of the health insurance plan.  Based on what I've read, here are the highlights of the plan:

1. Everyone will be required to have health insurance.  Lower income families will have a portion of the cost subsidized by the government.
2. All but the smallest businesses must offer health insurance to their employees.
3. Insurance companies may not discriminate against pre-existing conditions.
4. 96% of all Americans will have health insurance (up from about 90%).
5. There will be a public option which is insurance sold by the government, similar to Medicare.  Based on the current details of the plan, this option is expected to be more expensive than most commercially available plans, and very few people are expected to opt for it.

I've intentionally been vague about the cost of this plan because I'm not interested in that.  The numbers are just too big!  A trillion dollars is just too much to comprehend.  For the average person, when the discussion is about costs that are much more than the price of a nice house -- and by several orders of magnitude -- it just isn't possible to talk about it intelligently. 

At first glance, the five facts above make this legislation good for everyone.  Insurance costs will be subsidized for those who need it, and nearly everyone will have coverage.  No longer will those with certain health conditions be required to pay ridiculously high prices for insurance.  And, if you don't want Blue Cross Blue Shield or Aetna or Cigna or any of the other major insurance plans, you can choose the government's new plan.  (That's why they call it the public option.)

As I see it, the insurance companies are going to love this legislation, and that's where I see a problem.  Think about it.  Today, BCBS and the other insurance companies only have access to the portion of the population who can afford the cost of insurance.  Under the House's current proposal, everyone is required to buy some kind of health insurance, thus increasing the customer base for all insurance companies.  However, since they can't deny coverage to anyone (see #3 above), they will be forced to insure even the high risk people who are almost guaranteed to get sick and cost the company money.  They will certainly pass those costs along to their customers making the cost of everyone's plan more expensive.  These companies are used to high profits, and of course they want that to continue.

That's where the public option was supposed to enter the picture.  Originally, the price of all insurance would be kept in check by requiring the cost of the public option to be tied to the cost of Medicare.  It would be available as a cost-effective option to people if their private insurance provider kept raising their rates.  However, with this watered-down public option, the government will negotiate rates with healthcare providers in the same way that BCBS, Cigna, and others do.  This seems to provide less assurance that insurance costs will remain affordable.

If the government forces insurance companies to insure everyone, and insists that they charge each individual the same rate regardless of pre-existing conditions and other factors, I don't see any alternative to costs going up for the majority of people.  As with any other industry, when the cost of doing business goes up, that cost is passed along to the customer.

Finally, I'll close by admitting that it's easy to criticize a plan that others have proposed.  No plan will ever be perfect for everyone.  It's clearly a very difficult task to create a plan that achieves the goal of providing affordable health insurance to everyone at a fair price.  I don't know what plan I would come up with, and I don't even know where I'd start.  I agree with the Democrats' mission to make affordable insurance available to everyone; and I agree with the Republicans' mission to limit both the government's involvement and the total cost.  I only wish the two parties would show more willingness to cooperate and arrive at the best plan possible. 

This House plan is 1,990 pages long!  For the Congressional assistant who is responsible for carrying it out to the floor of the House, I hope he has good insurance because he's going to need a chiropractor tomorrow!