More ObamaCare high jinks: Conflicts of interests, rising costs

posted at 7:01 pm on November 3, 2012 by Erika Johnsen

Of course, this was pretty much bound to happen, as it always is with any ill-thought-out, behemoth legislative overhauls of an entire industry, but that doesn’t make it any more pleasant when it does. Spoiler alert: Big government leads to rent-seeking, and President Obama’s erstwhile promises of transparency aren’t really worth a hill of beans. Via The Hill:

The Obama administration is relying heavily on outside contractors to implement a core component of healthcare reform as it races to set up a federal health insurance marketplace before 2014. …

The purchase of one of these contractors, Quality Software Services, Inc. (QSSI), by UnitedHealth Group, a major healthcare conglomerate, has sparked concerns about a potentially uneven playing field.

QSSI, a Maryland-based contractor, in January won a large contract to build a federal data services hub to help run the complex federal health insurance exchange. …

The quiet nature of the transaction, which was not disclosed to the Securities and Exchange Commission (SEC), has fueled suspicion among industry insiders that UnitedHealth Group may be gaining an advantage for its subsidiary, UnitedHealthcare.

UnitedHealth Group’s acquisition has caught the attention of Sen. Orrin Hatch (R-Utah), the ranking member on the Senate Finance Committee. He has expressed alarm over what he calls a lack of transparency in setting up a national insurance marketplace covering more than 30 states.

The Hill’s story has much more on the detail on the potential conflicts-of-interest that are going on here, if you care to try and stomach the rampant cronyism, underhandedness, and “business as usual” in the federal government that’s only going to metastasize with the continuing onset of ObamaCare — but that’s the Obama Way, I suppose: When in doubt, just add more bureaucracy, because it’s not like that ever creates a whole host of problems of its own or anything.

In that same vein, California is one of the few states that’s actually charged forward in creating one of ObamaCare’s prescribed state insurance “exchanges,” and they’re already trying to combat what’s looking like substantially rising costs, via the LATimes:

California insurance officials have expressed concern about substantial rate hikes for some existing policyholders going into the exchange.

Under a new rating map approved by state lawmakers, the Department of lnsurance estimated that premiums for similar coverage could increase as much as 25% in West Los Angeles, 22% in the Sacramento area and nearly 13% in Orange County.

Janice Rocco, the state’s deputy insurance commissioner for health policy, said her agency is pushing a new rating map that would cap increases at 8%. That proposal could be considered during a special legislative session in the coming months.

Yes, by all means, let’s try to legislate caps on price increases — I’m sure that insurers not being able to cover their costs won’t have any adverse effects at all, right?


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