Obvious solution for insurance premium hikes? Price controls, of course

Backing up his rhetoric behind the scenes, the Department of Health and Human Services (HHS) is quietly working on a new regulation to determine when insurance price increases are “unreasonable” and potentially prohibited by law.

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The move may provide political cover heading into November’s elections as the President tries to keep the public from linking recent premium hikes to his newly-passed health care law.

But critics warn price controls could lead to either rationing or insurance companies going out of business, and point to Massachusetts’s experience with insurance price controls as a cautionary tale of what happens when pricing “turns political.”…

Obama’s health care plan is in many ways based on the Massachusetts law, and Patrick shares with Obama a top political advisor in David Axelrod.

However, Massachusetts’s price controls did not work out as planned. E-mails later showed top state officials warning the controls would have adverse consequences, including undercutting the solvency of the state’s insurance companies.

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