Health Insurers Are the 'Connective Tissue' of the Health Care System

Former Obama administration official comes to the defense of the industry

Some of the more sweeping Medicare-for-all proposals would effectively do away with private health insurance but in Health Affairs blog post this week a former Obama administration official comes to the defense of the industry as the "connective tissue of the health system" that would have to be replaced even if a single payer system were to come to pass.

Jonathan Foley also argues that private health insurance in countries with single payer systems serves as a "type of pressure valve" that eases concern about waiting lists. "To be sure, it favors those who are better off financially and contributes to inequity," Foley wrote in his June 11 post. "However, without some type of alternative, all of the pressure is on the publicly funded system to meet demand."

Foley, now co-leader of a consulting group, Wescott Partners, was a senior executive in the Office of Personnel Management during the Obama administration who dealt with matters related to the Federal Employees Health Benefits Program and the ACA.

Pointing to the growing popularity of Medicare Advantage and to the proliferation of Medicaid managed care organizations (38 states and Washington, D.C., have contracts with Medicaid managed care organizations), Foley lauds insurers as health care's essential "middleware" that does more than pay claims. MCOs are "involved with key aspects of care delivery such as ensuring that provider networks have sufficient capacity; incentivizing providers to improve the quality of care; building information systems that support communications between providers and their patients (for example, smartphone apps); and supporting disease management, care coordination, and outreach."