The correct breakdown is: "What if the US gov doesn't (recognize the risk and allow insurers to raise rates)". The only grammatical way for your interpretatio

The correct breakdown is: "What if the US gov doesn't (recognize the risk and allow insurers to raise rates)". The only grammatical way for your interpretation to be correct is if "allow" was "allows". (However, I will grant that many posters, here and elsewhere, are sufficiently careless with their typing that one could easily assume that was the intent.)