Free Markets, Free People

threats


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