Insurers cozy with Obami?

I don't really see the big deal underlying all the breathless reports of the Administration 'colluding' with insurance companies:

Publicly, President Obama loves to demonize insurance companies. But behind the scenes, Big Government and Big Insurance maintain a cozy alliance that the Obama administration actively nourishes, often at taxpayer expense. Indeed, as emails recently obtained by the House Oversight Committee show, Big Government and Big Insurance have worked together to promote Obamacare. They’ve also worked together to make sure taxpayers will help bail out insurance companies who lose money selling insurance under Obamacare — that is, unless Republicans stop this from happening. Moreover, Obama senior advisor Valerie Jarrett is among the prominent White House officials who’ve been in the middle of this collaboration between insurers and the administration — between those driven by the profit motive and those driven by the power motive.

What O'care does is strip away the ability of insurance companies to protect themselves against catastrophic losses unmatched by premium payments.  Everyone knew that O'care would draw millions of customers that had expensive pre-existing conditions and that any insurer who undrwrote these customers would lose their ass.  Therefore, insurers liking their well formed derrières would refuse to participate with the result being no Obamacare, no 'historic achievement'.  The Feds knew that they had to cover the excess initial losses due to preexisting conditions to jump start the program. Hence all of the cash payments to insurers to reflect the difference.

Where it seems to have gotten ugly, however is that the Obami pressured insurers to underprice the first year policies to improve the political optics - implicitly promising that they'd cover these losses as well as the preexisting condition losses.  This sets a precedent for ongoing back door subsidization of private health insurance via payments to the insurers guaranteeing their losses due to normal market forces.  This subsidization to keep 'healthcare costs down' will become an irresistible temptation for both parties as O'care, Medicaid, Medicare and aging cause real healthcare costs to explode. The result will be a disaster because if the insurers know their losses are limited by Uncle Sugar they will not fight as hard to manage costs and will incur far more risk for upside gain than they would if they faced symmetrical downside risk (gee, just like the mortgage and equity markets). And the victims will be our kids because today's taxpayers are too busy getting the subsidy sugar to give a rat's ass.

The end game will be when the dollar collapses and our 'saviors' denounce the 'thieving' insurers and expropriate their customers for the new 'efficient' national health insurance scheme (led by the people who brought us the O'care website) that will make things ever so worse.  But hey! At least the statists will have finally gotten complete power over what will then in all likelihood be an empire of dirt.

The problem isn't the payments, it's the underlying worldview that says that the government can replace the market, bear the risk and print the money to pay for it all and it will all turn out OK.  Smashing functioning markets and replacing them with apparatchik management is always stupid.  Ask the Russians.