Via Robert Pear in today's New York Times, we learn that Karen Ignani is very, very worried about how some proposed changes in Medicare would affect the elderly: "Cuts of this size would mean the end of a lifeline for many seniors," she warns. And that sounds very touching, indeed, until you remember that she represents America's Health Insurance Plans (AHIP), which is the main lobbying group for the health insurance industry. Should that make you suspicious of her motives? You bet. The heart of the issue here is the Medicare prescription drug program, which became law after a contentious debate in 2003. As you may recall, the architects of that program--chiefly, President Bush, the Republican congressional leadership, and their illustrious friends on K Street--insisted that private insurance companies, not the traditional government-run Medicare program, administer the new drug benefit for seniors. Trouble was, past efforts at integrating private insurance into Medicare--chiefly, the troubled Medicare-plus-choice program of the 1990s--had shown that it costs a lot more money to insure people through private insurance than it does through the traditional public program. Rather than, say, ditch the whole idea altogether (as leading Democrats had proposed), Bush and his allies decided to push ahead with their framework anyway--and stuff the insurance industry's pockets with even more extra money this time around. Now the Democrats control Congress. And to help finance expanded health insurance to cover poor children and their families, they want to get rid of the extra subsidies. It's those cuts that Ignani and her organization are protesting. And the meaning of her statement could not be clearer. When the federal government finally reduced subsidies private insurers were receiving Medicare-plus-choice in the 1990s, insurers fled the program, figuring it wasn't worth participating if they couldn't make the same profits. So if the Democrats succeed in cutting subsidies in the new program, Ignani is threatening--er, suggesting--that the plans will flee again. That's probably what they would do. And that's one very good reason why it never made sense to count on them in the first place. Private insurers will perform a public function only as long as they find it lucrative; once they don't, they're out. That's an inherently unstable arrangement--not to mention a shameful waste of money. After all, the money spent subsidizing their participation in Medicare could finance more drug coverage for seniors--or, as the Democrats now propose, insurance for poor children. Either way, it's a better use of taxpayer money. --Jonathan Cohn