Free Markets, Free People

Senate seeks to have federal government control private health care premiums

Apparently the fear of increased premiums in reaction to the new Health Care Reform law recently passed by Congress is prompting Senate Democrats to propose a bill that would
give the federal government the power to regulate health insurance premiums.

Of course, you never saw this coming, right?

It appears our overlords simply do not trust those greedy insurance companies to not raise their premiums in reaction to the new law.  Or as Sen Tom Harkin explains it:

“Rate review authority is needed to protect consumers from insurance companies’ jacking up premiums simply because they can. Protections must be in place to ensure that companies do not take advantage of current market conditions before health reform fundamentally changes the way they do business in 2014.”

You have to laugh (or throw up a little) at the economic naiveté and pure hypocrisy contained in that statement.  Naive because it totally discounts the market and opts for central (and populist) top-down control (and we know how well that works) and hypocritical because the federal government is presently raising taxes before 2014 to “pay” for the health care monstrosity they’ve foisted upon us. 

Care for a little more sanctimonious drivel intended to justify this power grab? Diane Feinstein:

“Water and power are essential for life,” Mrs. Feinstein said. “So they are heavily regulated, and rate increases must be approved. Health insurance is also vital for life. It too should be strictly regulated so that people can afford this basic need.”

Really? Is that why it has to be “strictly regulated”? Or is it because if the market actually begins to react  properly to the artificial pressure brought by the legislation Democrats passed it will be shown up for the fiscal black hole and legislative piece of garbage it is?

Sen. Lamar Alexander brings a little context to the debate:

“Health insurance companies’ profits for one year equal about two days of health care spending in the United States. So even if we were to take away all the profits of the so-called greedy insurance companies, that would still leave 363 days a year when health care costs are expanding at a rate our country cannot afford.”

Let’s also remember that the 4 major health insurance companies in Massachusetts – all non-profit organizations – requested over 200 premium increases and were denied all but a few. Was it greed that drove them to request those increases?

Grace-Marie Turner, president of the Galen Institute, a research center that advocates free-market health policies, said the Democrats’ proposal was unlikely to succeed in lowering insurance costs.

“Capping premiums without recognizing the forces that are driving up costs would be like tightening the lid on a pressure cooker while the heat is being turned up,” Mrs. Turner said.

Instead, it gives single-payer types (like Harkin and Feinstein) a way to hurry along the failure of the private health insurance market and eventually, by fiat, usher in government health care.

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.

Arbitrary, capricious and, if passed, eventually deadly. Just hide and watch.



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21 Responses to Senate seeks to have federal government control private health care premiums

  • You know .. with the internet, we could get rid of politicians altogether

  • Welcome to this week’s episode of “We’re All Venezuelans Now”.

  • Funny. I lived for several years without health insurance (because being in my 20s, healthy, and the like, I saw no need to have it), and <I>somehow I did not die</i>.
    Yet health coverage is “vital” like water and air?
    Why isn’t Congress dead, given that they’ve accidentally written themselves out of having health coverage for the moment?
    Guess it’s not so vital after all. Well, and Congress is ignoring that little part of the “Reform” bill.

  • “Health insurance is also vital for life” – uh, yeah, sure.  I suspect that we can declare a three martini lunch vital for life too, under the same premise that insurance (of ANY FREAKING KIND) is vital for life.
    One wonders how every previous civilization managed without it(cue an idiot to arrive and point out that all those civilizations eventually fell….and to imply that insurance was a factor….).  Perhaps this is why we find no life at present on Mars, or the Moon, no health insurance.  Heh, who knew.

  • You know, on further reflection, this “vital for life” statement irritates me infinitely MORE than the idiot who wanted to know if Guam might capsize if we overloaded it.  The Guam idiot is just an idiot, Feinstein is just a freaking power grabbing monster who will clearly say absolutely anything she pleases to justify anything she wants (she should become VP, then we’d have a matched set).

  • Interesting. Insurance rates are currently regulated by the states. There is no national insurance market, there are 50 states. It’s called federalism. The existence of these 50 state markets was one reason given for why health insurance reform could not include my ability to purchase a policy in another state. Apparently this is not an inhibition to regulating rates at the national level. I suppose (history repeating itself as farce) that there must be some sort of tortured rationale based on a tendentious reading of the Commerce Clause that permits the Secretary of HHS to regulate intrastate commerce. No doubt this is because Supreme Court precedent from 1941 that the federal government could regulate how much wheat some poor bastard grew for personal use.  And we could never undo that precedent because it is the rotten foundation that permits the federal government to impose its power on the free market.  I wonder if any rational person in 1954 ever argued that you could not impose de-segregation because it would upend sixty years of settled precedent?

    • ”It’s called federalism.”

      Regulating interstate commerce is one of the powers the Constitution gives to the Federal government. That particular power has been used for all sorts of things that are not really interstate commerce. But in its real use the power to regulate interstate commerce effectively creates a free market among all states. I’m oblivious to how and why health insurance got established as a state-by-state thing, not being an insurance policy wonk.

      But if just that one change had been made, allowing, or forcing, competition among health insurance providers across the states, at least one element of the problem would have been solved, without further federal intervention. But these insurance interests state-by-state are probably seriously entrenched and politicians are probably seriously afraid of them. Now they’re in the big game of rent-seeking, but between their own rock and the Feds hard place.

      What a mess.

  • But you can be assured that this does not, I repeat-does NOT, mean that the feds are taking over health insurance. So all you ignorant wing-nuts just hush and stop scaring people.

  • OK, when will enough be enough???  Just in the past few weeks, we’ve seen DC claim a right to:

    —- Regulate the amount of salt that we eat

    —- Regulate whether or not an airline can charge a fee for carry-on bags

    —- Tell health insurance companies that they MUST cover children with preexisting medical conditions

    None of these things are constitutional.  Now, DC is claiming the right to tell insurance companies what is and isn’t a “reasonable” rate increase.  What’s next?  Telling oil companies what is “reasonable” price for gas?  Grocery stores what is a “reasonable” price for bread or beer?  Movie theatres what is a “reasonable” price for popcorn?  Is there ANYTHING that the Congress and Imeme doesn’t believe that it has the power to mandate???  Is there ANY area of our lives that the Congress and Imeme doesn’t believe that they have the power to interfere with and regulate???

    How in the world can anybody outside of the DC power elite be happy about this state of affairs?  I realize that there is no shortage of do-gooders / busybodies in our country, but doesn’t it occur even to them that a government powerful enough to do FOR people can also do TO people?  And what sort of idiots live in California and Iowa that keep sending Harkin and Feinstein back to DC to be a plague on the rest of us?

  • I see no need to change the ObamaCare legislation because, as passed, it is perfect … perfectly awlful.

    • I see this as a Republican strategy on ObamaCare … repeal or leave it as is.
      Any bill to change anything will be used as a reconciliation vehicle.

  • I’m sooo not shocked.  We’ve seen this happen with California power and a variety of other places where costs to the consumer are locked and the back-end is crushed by detailed rate incrases.  In the case of power, it only meant serious brown-outs.  What happens when a whole insurance sector shuts down?

  • The fastest way to create a shortage is to cap the price.   My opinion is that this is designed to more quickly drive private insurers out of the marketplace.

  • Its just brutally obvious the folly of what they are proposing.  It must be nice to have a complicit media and spoon fed public.

  • The fool, the charlatan, and the evil tyrant; what do they all have in common?  Price controls.

  • Of course this might be smoke.  Instead its part of a PR campaign to redirect blame for the coming Health Ins cost increases from the taxes and pre-existing condition changes.
    Basically it puts the republicans on the defensive concerning the cost increase issue as they try to stop such silliness and prevents them from going on the offensive concerning the cost increases.