Free Markets, Free People

insurance premiums


And you wonder why health insurance is expensive?

The opening line in a New York Times piece caught my attention.  It is typical of how government, once it gets control of something, then begins to expand it (and make it more costly for everyone) as it sees fit.  Note the key falsehood in the sentence:

The Obama administration is examining whether the new health care law can be used to require insurance plans to offer contraceptives and other family planning services to women free of charge.

Yup, you caught it – nothing involved in such a change would be “free of charge”.   Instead others would be taxed or charged in order for women to not have to pay at the point of service.  That’s it.  Those who don’t have any need of contraception will subsidize those who do.  And the argument, of course, will be the “common good”.   The other argument will be that many women can’t afford “family planning services” or “contraception”.

But the assumption is the rest of you can afford to part with a little more of your hard earned cash in order to subsidize this effort (it is similar to other mandated care coverage you pay for but don’t need).  Oh, and while reading that sentence, make sure you understand that the administration claims it has not taken over health care in this country.

The next sentence is just as offensive:

Such a requirement could remove cost as a barrier to birth control, a longtime goal of advocates for women’s rights and experts on women’s health.

So now “women’s rights” include access to subsidies from others who have no necessity or desire to pay for those services?  What right does anyone have to the earnings of another simply because government declares that necessary?

It is another example of a profound misunderstanding of what constitutes a “right” and how it has been perverted over the years to become a claim on “free” stuff paid for by others.

Administration officials said they expected the list to include contraception and family planning because a large body of scientific evidence showed the effectiveness of those services. But the officials said they preferred to have the panel of independent experts make the initial recommendations so the public would see them as based on science, not politics.

Really?  This is all about politics.  The fact that the services may be “effective” is irrelevant to the political questions and objections raised above.  This is science being used to justify taking from some to give to others – nothing more.

Finally:

Many obstetricians, gynecologists, pediatricians and public health experts have called for coverage of family planning services, including contraceptives, without co-payments, deductibles or other cost-sharing requirements.

Good.  Let them then advertise the fact that they are offering their services to women who want them or need them free of charge.

What?  That’s not what they meant?  They want to get paid, they just want someone else to pay them?

This is just the beginning of many special interest groups trying to find ways to have their needs subsidized by you – and trust me, if they fall in the favored constituency group of whoever is in power they have a shot at getting it.   That or a waiver.

But remember – government has not taken over health care.

~McQ


HHS Secretary threatens insurers with “exclusion” if they don’t toe the government line

America’s new “Health Care Czar”, aka Secretary of Health and Human Services Kathleen Sebelius, has issued a letter to the insurance industry telling them not so politely to shut up or pay the consequences.

The letter, sent to Karen Ignagni, president of America’s Health Insurance Plans — the chief lobbyist for private health insurance companies – makes it clear in no uncertain terms that any complaints that ObamaCare is causing insurance premiums to rise is unacceptable:

"There will be zero tolerance for this type of misinformation and unjustified rate increases."

But that’s not the real problem, that’s just the warning.  Then there’s the threat:

"We will also keep track of insurers with a record of unjustified rate increases: those plans may be excluded from health insurance Exchanges in 2014."

One has to wonder though, whether Sebelius will also track the misinformation put out by the administration and her department.  Such as the implication that no such increases are caused by the law or that any such increases are “minimal”, i.e. in the 1 to 2% range.

That’s just poppycock.  

As Time magazine’s Karen Pickert points out, Sebelius ignores the fact that individual insurance plans cover different types of populations. So that government and "some" industry and academic experts think the new law will justify increases averaging 1 percent or 2 percent, they could justify much larger increases for certain plans.

Or as Ignagni, the recipient of the letter, says, "It’s a basic law of economics that additional benefits incur additional costs."

In other words, mandated coverage – with which the law is loaded – costs money.  Whether or not you want it isn’t the point.  You’re going to get it and as expected, that means the cost of your insurance premium will go up.  If, for instance, you’re carrying a minimal coverage policy with fewer benefits than those mandated by ObamaCare, your insurance coverage is about to change dramatically and so is the cost.

But insurers better shut up about the increased cost or, at least, not blame it on ObamaCare or, per the HHS Secretary’s threat, they’ll be “excluded” from the government takeover underway.

As Michael Barone notes today in his Townhall column:

The threat to use government regulation to destroy or harm someone’s business because they disagree with government officials is thuggery. Like the Obama administration’s transfer of money from Chrysler bondholders to its political allies in the United Auto Workers, it is a form of gangster government.

"The rule of law, or the rule of men (women)?" economist Tyler Cowen asks on his marginalrevolution.com blog. As he notes, "Nowhere is it stated that these rate hikes are against the law (even if you think they should be), nor can this ‘misinformation’ be against the law."

That, however, doesn’t apparently stop an administration with increasingly totalitarian tendencies from threatening insurers with the loss of their business if they don’t comply and keep their explanations to themselves.

This is outright thuggery.  As Barone points out, this certainly isn’t the first example we’ve seen, nor is it most likely to be the last.  This is pure and blatant intimidation.  There’s no place for this sort of nonsense in democratic republic one of whose founding principles is freedom of speech.

Secretary Sebelius should withdraw the letter immediately and apologize for the threat she issued to the industry as a whole.  She should also understand that she doesn’t get to decide what is or isn’t “misinformation” or how insurance companies choose to present the inevitable premium increases driven by ObamaCare to their customers.

If she feels there is misinformation out there that is actionable, then she has a court system on which to rely.  My guess is she knows she hasn’t a case and thus is reduced to threatening insurers instead, hoping they’ll be cowed into compliance.

Your “hope and change” government at work.  

~McQ


The future of Obamacare is on display in Massachusetts

No one denies that Obamacare is modeled after the Massachusetts model signed into law there by Governor Mitt Romney. In fact, in 2006 then Senator Barack Obama called it a "bold initiative" that it would "reduce costs and expand coverage"  and as recently as early this year, now President Obama called his initiative, “essentially identical” to that of Massachusetts.

And that’s precisely how Obamacare was sold to the American public.  I use “sold” advisedly, since most of the American public made it clear they didn’t want what Obama and the Democrats were selling.  But regardless, they passed it into law anyway.

So now we turn our attention to the experiment that has been running in MA for years and what do we find?

Massachussets has the highest average health care premiums in the nation, according to the <em>Wall Street Journal’s</em> Joseph Rago.  In fact, Governor Deval Patrick has tried to cap insurance premiums, arbitrarily denying 235 of 274 rate increases submitted by the major health insurance companies serving the state (all nonprofits, by the way).  However a state appeals board has since reversed Patrick’s arbitrary caps.  The state is appealing the board’s decision.

In the meantime, the insurance companies have suffered $116 million in loses.

Robert Dynan, a career insurance commissioner responsible for ensuring the solvency of state carriers, wrote that his superiors "implemented artificial price caps on HMO rates. The rates, by design, have no actuarial support. This action was taken against my objections and without including me in the conversation."

Mr. Dynan added that "The current course . . . has the potential for catastrophic consequences including irreversible damage to our non-profit health care system" and that "there most likely will be a train wreck (or perhaps several train wrecks)."

As a result of the Patrick rate caps, three of the insurance companies are under administrative oversight because of concerns about their financial viability. And that’s not all. In order to cut costs, rationing and other measures are being contemplated:

Naturally, Mr. Patrick wants to export the rate review beyond the insurers to hospitals, physician groups and specialty providers—presumably to set medical prices as well as insurance prices. Last month, his administration also announced it would use the existing state "determination of need" process to restrict the diffusion of expensive medical technologies like MRI machines and linear accelerator radiation therapy.

Meanwhile, Richard Moore, a state senator from Uxbridge and an architect of the 2006 plan, has introduced a new bill that will make physician participation in government health programs a condition of medical licensure. This would essentially convert all Massachusetts doctors into public employees.

There are literally no surprises to be found in those two paragraphs.  All of this was foretold by critics of the Obamacare plan. All of it. These are inevitable outcomes of such a plan.  It was clear from the outset that Democrats and the administration were selling something they couldn’t deliver – essentially no changes in your coverage except less cost.  Massachusetts has proven that to be the pure nonsense critics called it from the beginning.  As Rago says:

In other words, health reform was a classic bait and switch: Sell a virtually unrepealable entitlement on utterly unrealistic premises and then the political class will eventually be forced to control spending. The likes of Mr. Kingsdale would say cost control is only a matter of technocratic judgment, but the raw dirigisme of Mr. Patrick’s price controls is a better indicator of what happens when health care is in the custody of elected officials rather than a market.

Or, as goes Massachusetts, so goes the country under Obamacare.

Is it any wonder 60% of the nation favors repeal?

~McQ


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.

~McQ