Next up: Senate considers regulation of health-insurance premiums

posted at 4:05 pm on April 21, 2010 by Ed Morrissey

After all, why stop at federal mandates on coverage?  If Congress wants to really destroy the insurance industry, they need to start setting price controls to accelerate their collapse.  According to the New York Times, Senate Democrats have already begun laying the groundwork for it:

Fearing that health insurance premiums may shoot up in the next few years, Senate Democrats laid a foundation on Tuesday for federal regulation of rates, four weeks after President Obama signed a law intended to rein in soaring health costs.

After a hearing on the issue, the chairman of the Senate health committee, Tom Harkin, Democrat of Iowa, said he intended to move this year on legislation that would “provide an important check on unjustified premiums.”

Mr. Harkin praised a bill introduced by Senator Dianne Feinstein, Democrat of California, that would give the secretary of health and human services the power to review premiums and block “any rate increase found to be unreasonable.” Under the bill, the federal government could regulate rates in states where state officials did not have “sufficient authority and capability” to do so.

This should prompt a rather embarrassing question: wasn’t ObamaCare supposed to prevent this very problem? Congressional Democrats and the White House certainly sold it as a cost-containment measure. They promised that their top-down, heavy regulatory approach would “bend the cost curve downward,” which should mean lower premium costs. The federal mandate was also supposed to reduce the rate of premium increases by forcing all of the healthy consumers in the US to buy, er, a comprehensive health insurance plan that they don’t need.

ObamaCare critics know that the bill won’t do anything to hold down costs, mainly because it amplifies the factors that drive up costs now rather than mitigates them.  Even the New York Times managed to discover that in their own state after 17 years of the same kinds of “reforms,” although they didn’t bother to report it until after ObamaCare passed.  Massachusetts and Maine had the same experience with premiums, and they had to respond with price-fixing solutions in order to keep citizens from throwing the architects of these plans out of office.

Price-fixing only succeeds in temporarily postponing the problem of cost control — because prices and costs are not the same thing.  A price-fixing regulatory system will succeed in the long run only in forcing insurers into bankruptcy.  Health insurers already operate on very thin margins.  If they can’t raise prices to meet cost increases, they won’t make any profit at all, and all of their policyholders will wind up with no coverage.

Some will claim that this has been the intent of Democrats all along; they want to destroy the health-insurance industry in order to fully nationalize health care in the wake of the collapse of the industry.  Whether or not that has been their intent, they couldn’t have possibly gone about destroying the industry in any better manner than what we’ve seen over the last year.

Update: Color Guy Benson shocked, too.


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Comment pages: 1 2

Whether or not that has been their intent, they couldn’t have possibly gone about destroying the industry in any better manner than what we’ve seen over the last year.

If you are still harboring any doubts about their intent then you checked your brains at the door.

chemman on April 21, 2010 at 8:23 PM

Interesting. This reminds me of the old axiom that a lie requires more lies to keep it going (or something like that… I’m not so good with old axioms.) We should consider what else they’ll need to come up with to cover their tracks as more and more of the legislative fraud in Obamacare is exposed.
As far as “the government” as the sole payer or insurance: that’s one way to get rid of the lawyers, since “the government” won’t tolerate being sued… Heh.

n0doz on April 21, 2010 at 8:29 PM

Mr. Harkin praised a bill introduced by Senator Dianne Feinstein, Democrat of California, that would give the secretary of health and human services the power to review premiums and block “any rate increase found to be unreasonable.”

…because most americans are just too stupid to know when prices are “unreasonable”? Why not regulate the prices of houses, cars, food, wine, clothes, etc., when they become “unreasonable”?

oakland on April 21, 2010 at 8:41 PM

I don’t know if this has been mentioned but you will see a lot of independent insurance agents go out of business. That’s ok though because as an independent contractor, you can’t get unemployment benefits so they won’t really be unemployed.

Vince on April 21, 2010 at 9:07 PM

I would think requiring someone to sell something or some service for less than they believe it costs to provide is an unconstitutional taking. (Of course if Obama get a couple more SCOTUS picks, you can forget any protection from the constitution of that nature.)

KW64 on April 21, 2010 at 11:39 PM

Another govmint tentacle around a big business. Got to control profits to drive them out of business. To answer the question…maybe they left that part out of the bill.

Kissmygrits on April 22, 2010 at 9:21 AM

Hmm, since this plan is supposed to make costs and premiums go down, and Obama is such a brilliant mind, the whole plan should eventually be nearly without costs!!

Since the government is requiring everyone to have it and the government is setting the price for it, it seems to me like it would save a whole lot of time and argument to just make it free for everyone now!! As a secondary advantage, this should significantly improve our relations with Russia and China and Cuba and Venezuela and all those other lovely nations out there as we display our humulity by admitting that we should have long ago followed their glorious lead into, well, uhm, err, ahh, “communism” (which they will, no doubt, readopt after we show them how to finally do it right!!)

Heck, nearly half of all Americans should be thrilled (since they don’t pay federal taxes anyway – except for sin taxes, gas taxes, phone taxes, etc – but, basically “none).

The rest of us? Well, its our duty to ensure that the less fortunate members of our nation’s population are not deprived of this fundamental “right“!

From each according to his ability, to each according to his need!

It just “feels” so very right, doesn’t it?

(Do I really need to? Probably to be safe)

/Sarc

Fatal on April 22, 2010 at 1:20 PM

Isnt the poing to force private insurers into bankruptcy so that the feds can take over the industry with a goverment run single payer system?

paulsur on April 22, 2010 at 3:42 PM

Comment pages: 1 2