The Senate bill removed the public option. The public option would have been a benchmark by which to judge the private insurance companies. It would have served as a check on the private insurance companies.

With the public option gone, the only other check left on the for-profit private insurance industry is regulation. Can under-enforced regulations really serve as a check on a very wealthy and powerful industry? The answer is “no,” and that is the pitfall of the Senate bill.

The Senate bill leaves enforcement of regulation up to the same state insurance commissioners that have failed us so far. The bill does not even remove the anti-trust exemption for health insurance companies.

Some state insurance commissioners are overly friendly to the insurance industry. Even Max Baucus, who wrote the bill, admits he is “not sure” about trusting the state insurance commissioners. The few state insurance commissioners who try to take on the insurance companies are often hopelessly out-gunned. The California insurance commissioner’s office is one of the best in the country, but was forced to admit it did not have the resources needed to stand up to the biggest insurance companies.

Is there is anyone who can honestly tell me how this bill will actually work to enforce these regulations around the entire country? Not the nice sounding bullet points, but a detailed analysis how our unreformed, broken, state-based insurance regulation enforcement mechanisms will ever be able to handle their expanded job functions. If there is, I have not seen it. Regulations un-enforced are just like no regulations at all.

The Senate bill puts into place some very nice-sounding regulations, but does not add the super powerful policing force needed to make them a reality. The old dirty tricks we have come to hate from the private insurance companies may mostly disappear, but only because they will morph into brand new ways to game the system.

The most critical failing of the Senate bill is that it still leaves the private insurance companies unchecked. They will not face competition from a public option, there will not be a truly robust risk adjustment mechanism to de-incentivize cherry picking, and the state insurance commissioners meant to enforce the new regulations will lack the will and/or the funding to take them on. Rules without a policeman strong enough to enforce them are just empty promises.

The House bill, on the other hand, had three important checks on the health insurance industry. It had the public option, a national regulatory framework, and a repeal of their anti-trust exemption. The Federal government is the only body possibly big enough to police the largest for-profit insurance companies.

If Democrats pass a “reform” bill (like the Senate bill) that lacks any real checks on private insurance–on the industry from which people will be forced to buy insurance–it will be a disaster. Democrats created this “reform,” and they will be forced to own it–along with every new trick the private insurance companies invent to abuse their customers. If you are going to give Americans a box labeled “health care reform” for Christmas, it better actually have real reform inside.