I suppose straddling the line between socialism and fascism counts as "bipartisan"

The debate over health care has had me thinking about the question of where to draw the boundary between a a private firm intertwined with or heavily regulated by the government and an arm of the state that merely maintains the forms of the private sector. It's been frequently pointed out, correctly, that the obvious purpose of the "public option" is to serve as a Trojan horse for single payer. Even without the public option, though, the "reforms" that seem most likely to pass would effectively eliminate private insurance.

The most frequently referenced issues, now that the public option seems to be out of the running, are the insurance mandate and insurance for people with preexisting conditions. The mandate is basically a payoff to the insurance industry: The government imposes new controls on them requiring them to do things that do not make financial sense if you're actually in the insurance business, and in return the government will force everyone to buy their product. The insurance companies get more money, the government gains greater control of health care, and the benevolent champions of the working man in Washington, D.C. get to impose a large, regressive I-swear-it's-not-a-tax on everyone.

In this scenario, in what meaningful sense is the insurance industry "private" any longer?

The insurers would be government agencies in everything but name, and the insurance they “sell” would simply be a welfare program (albeit one that, like social security, would produce a net transfer of wealth from the relatively poor to the relatively rich) disguised as a commercial transaction. They would exist to serve purposes chosen by the government, their activities would be controlled by the government, and their funding would be given directly to them by the entire population under threat of government force. They would have some internal autonomy and some scope to compete with each other, but that means little to this issue. Even communist countries experimented with letting the managers at state-owned factories make some independent decisions. They'll be about as "private" as a public school district.

The only notable difference, so far as I can tell, is that the people in charge of distributing insurance will be making a hell of a lot more money than your average Department of Health and Human Services manager.