I don't think they think they're biting the hand that feeds them

I had quite a few "conversations" with progressive, well-read friends over the holidays who were apoplectic over the health care bills, wanting them substantially changed or even killed. The reasons were reasonable enough on the face of it -- no public option and a mandate means a windfall for the insurance companies. No amount of arguing that the companies would face a slew of new taxes to pay for subsidies, would be forced to pool risk among tens of millions more people who are now not covered because of cost or pre-existing conditions, would face new competition in the form of exchanges, etc., could budge them from their perch that the whole thing is just a gift to the evil health insurance companies.

I wonder if this will help convince them otherwise.

Throughout the health reform saga, AHIP, the industry group for health insurance companies, has sought to position itself as favoring reform. At the same time, left-wing critics of the bill, joined by a minority of right-wing critics of the bill, have sought to characterize the reform effort as a giveaway to the insurance industry. But as National Journal reported yesterday, the reality is that insurers have spent huge sums of money on television ads aimed at defeating reform:

That money, between $10 million and $20 million, came from Aetna, Cigna, Humana, Kaiser Foundation Health Plans, UnitedHealth Group and Wellpoint, according to two health care lobbyists familiar with the transactions. The companies are all members of the powerful trade group America’s Health Insurance Plans. The funds were solicited by AHIP and funneled to the U.S. Chamber of Commerce to help underwrite tens of millions of dollars of television ads by two business coalitions set up and subsidized by the chamber. Each insurer kicked in at least $1 million and some gave multi-million dollar donations.

And Igor Volsky observes that this is hardly the only thing insurers have done to try to block reform:

As former health insurance executive Wendell Potter told ThinkProgress, insurers are using a variety of front groups to advance a hidden attack campaign. The industry regularly feeds talking points to right-wing media like Rush Limbaugh and Fox News, mobilizes anti-reform “grassroots” groups and coordinates with conservative think-tanks to produce academic-appearing reports to advance their cause.

The insurance industry has also funded state efforts to challenge the constitutionality of health reform. Insurers have “spent heavily on political contributions” in the 14 states seeking to ratify constitutional amendments that would repeal all or parts of the new measure and contributed thousands of dollars to the attorneys generals seeking to disqualify reform. Earlier this month, Lee Fang reported that Blue Cross Blue Shield Association “played a pivotal role in crafting this anti-health reform states’ rights initiative.

The insurance industry is much less popular than other interest groups with a stake in reform, so it doesn’t like to be seen as publicly spearheading the charge against reform. But the fact of the matter is that even though the new mandate/subsidy structure will give at least some insurers a bunch of new customers, the medium-run trajectory of reform is bad for private insurers. Right now, insurers are largely shielded from competition and are almost 100 percent immune to needing to please their actual customers, getting to deal with HR bureaucracies instead. In an Exchange-based world, individuals will be choosing from among several plans and insurers will be accountable to customers. What’s more, the principle that it’s the government’s job to make health care work will lead to pressure for further regulations and further squeezing of industry profit margins.

Look, as I've written before, the goal of health care reform has never been to make insurance company execs cry. Killing reform will surely make them happy.

UPDATE to fix an even more confusing headline than you're reading now.