By Evan Falchuk

The New York Times finally reports on something readers of See First have known about for almost two months now – the emerging fight over whether the federal government should regulate health insurance.

According to the Times, President Obama is upset that health insurance industry lobbyists have switched from support for the Baucus plan to opposition to it.  And so he gave his seeming approval to plans (I blogged about them here) for removing the federal anti-trust exemption health insurers currently enjoy.  The anti-trust exemption is at the heart of the American system of insurance regulation.

Now, there are good and reasonable public policy reasons to not only get rid of the antitrust exemption, but also to create a national market for insurance.  Pique over a political disagreement shouldn’t be one of them.  But it’s ok, legislation passes for all kinds of reasons, and the more important point is this.  A change as monumental as this ought to happen through reasoned, thoughtful discussion. And it certainly ought to happen with some kind of a plan of what we want this new federally-dominated insurance market to look like.

It begs other interesting questions, too.

Why should health insurers be singled out in this way?  If the problem is, as the President puts it, that health insurers are “looking for ways to avoid covering people,” rather than trying to curb costs and protect their insureds, well, couldn’t you say the same thing about insurers in all lines of business?  And if the answer to that is let’s address one market at a time, then isn’t this whole line of reasoning another way of saying the states are doing a bad job regulating insurance?

What do governors and state insurance regulators think of that?

At some point, if this new rhetoric continues, reform advocates will succeed in opening up yet another new front in the reform debate.

UPDATE: The text of the Baucus bill has now been filed – all 1,502 pages of it.  As the earlier proposals suggested, it seriously undermines any pretense of state insurance regulation.  Under the bill, states will be free to have any kind of regulation they like – as long as it’s the federal regulation.