I’d rather trust Grandma’s pearls to a guy with a mask and a crowbar than let insurance companies control national health reform. In Friday’s New York Times, columnist Paul Krugman distills the case against these bandits. But conservative Democrats are still acting like health insurers are the solution, not the problem. And they’re so lazy they can’t even write their own ultimatums.

Krugman gets right to his point:

Health reform will fail unless we get serious cost control – and we won’t get that kind of control unless we fundamentally change the way the insurance industry, in particular, behaves. So let me offer Congress two pieces of advice:

1) Don’t trust the insurance industry.

2) Don’t trust the insurance industry.

Then Krugman discusses something that also caught my eye in a letter the health insurance lobby sent this week to President Obama. The lobby makes a cost-cutting offer to "standardize and automate" the byzantine, fragmented insurance paperwork that occupies most of the staff in doctors’ offices. Different codes, forms, phone numbers and rules for every company and each plan in every company.

Why now? Insurers could have streamlined this system two decades ago. And as Krugman notes, even the uber-conservative William Kristol called for cutting insurance paperwork 15 years ago, albeit as a way to fend off bigger reforms. But the insurers did nothing. They didn’t have to, because "Americans seeking health coverage had nowhere else to go."

The equally obvious solution to insurer misbehavior, Krugman says, is a public insurance plan in competition with insurance companies, something like opening Medicare to anyone who wants to buy in. But insurers are fighting tooth and nail to prevent it:

At first the insurance lobby’s foot soldiers in Congress tried to shout down the public option with the old slogans: private enterprise good, government bad.

At this point, however, they’re trying to kill the public option in more subtle ways. The most recent ruse is the proposal for a "trigger" – the public option will only become available if private insurers fail to meet certain performance criteria. The idea, of course, is to choose those criteria to ensure that the trigger is never pulled.

And here’s the thing. Without an effective public option, the Obama health care reform will be simply a national version of the health care reform inMassachusetts: a system that is a lot better than nothing but has done little to address the fundamental problem of a fragmented system, and as a result has done little to control rising health care costs.

Right now the health insurers are promising to deliver major cost savings. But history shows that such promises can’t be trusted. As President Obama said in his letter, we need a serious, real public option to keep the insurance companies honest.

Krugman’s description of the insurance companies’ demand for a "trigger" before there can be a public option rang a bell. Hey, I read that this morning, somewhere else.

Here’s where: More than 50 more-conservative Democrats who call themselves the "Blue Dogs" released an ultimatum yesterday demanding restrictions on a public health insurance option, including this:

The availability of a public option would occur only as a fallback and in the absence of adequate competition and cost containment. Fundamental insurance market reforms and increased choice through the Exchange should improve access and contribute to lower costs. However, should the private plans fail to meet specific availability and cost targets, a public option would be triggered and be allowed to compete on a level playing field subject to the conditions outlined above.

That "trigger" demand was the most detailed part of a litany, most of which was also straight from the insurance industry’s mouth to the Blue Dogs. Insurers’ lobbying is obvously focused on cutting the Congressional herd in enough pieces to stop real reform.

In the meantime, here’s the list of Blue Dogs. 

Blue Dog Leadership Team

Rep. Stephanie Herseth Sandlin (SD), Blue Dog Co-Chair for Administration
Rep. Baron Hill (IN-09), Blue Dog Co-Chair for Policy
Rep. Charlie Melancon (LA-03), Blue Dog Co-Chair for Communications
Rep. Heath Shuler (NC-11), Blue Dog Whip

Blue Dog Members

Altmire, Jason (PA-04)
Arcuri, Mike (NY-24)
Baca, Joe (CA-43)
Barrow, John (GA-12)
Berry, Marion (AR-01)
Bishop, Sanford (GA-02)
Boren, Dan (OK-02)
Boswell, Leonard (IA-03)
Boyd, Allen (FL-02)
Bright, Bobby (AL-02)
Cardoza, Dennis (CA-18)
Carney, Christopher (PA-10)
Chandler, Ben (KY-06)
Childers, Travis (MS-01)
Cooper, Jim (TN-05)
Costa, Jim (CA-20)
Cuellar, Henry (TX-28)
Davis, Lincoln (TN-04)
Donnelly, Joe (IN-02)
Ellsworth, Brad (IN-08)
Giffords, Gabrielle (AZ-08)
Gordon, Bart (TN-06)
Griffith, Parker (AL-05)
Harman, Jane (CA-36)
Herseth Sandlin, Stephanie (SD)
Hill, Baron (IN-09)
Holden, Tim (PA-17)
Kratovil, Jr., Frank (MD-01)
McIntyre, Mike (NC-07)
Marshall, Jim (GA-03)
Matheson, Jim (UT-02)
Melancon, Charlie (LA-03)
Michaud, Mike (ME-02)
Minnick, Walt (ID-01)
Mitchell, Harry (AZ-05)
Moore, Dennis (KS-03)
Murphy, Patrick (PA-08)
Nye, Glenn (VA-02)
Peterson, Collin (MN-07)
Pomeroy, Earl (ND)
Ross, Mike (AR-04)
Salazar, John (CO-03)
Sanchez, Loretta (CA-47)
Schiff, Adam (CA-29)
Scott, David (GA-13)
Shuler, Heath (NC-11)
Space, Zack (OH-18)
Tanner, John (TN-08)
Taylor, Gene (MS-04)
Thompson, Mike (CA-01)
Wilson, Charles (OH-06)