February 22, 2010
Healthcare Department
A Bright New Idea From the Change-Master
I guess it's change of a sort.
Obama's healtcare reform started as a beautiful vision of low-cost healthcare for everyone. I thought that was highly unrealistic, but at least it was clear and straightforward.
I guess the Democrats thought it was unrealistic too, because the Democrats soon made a series of compromises and turned it into a plan that purporte to give us all healthcare through the dubious method of requiring all of us to buy health insurance. Worse, it required us all to buy the same kind of health insurance. Those who preferred high-deductible health insurance were out of luck.
Of course, since it makes little sense to require poor people to buy health insurance they can't afford, they were to be provided with subsidies. Given the other elements of the healthcare reform bill, this was a fairly sensible thing to do. Then, for some reason---I can only guess class hatred---it was decided that people who already had very good health insurance plans were going to be taxed extra. But, in a craven political move to buy support from unions, their members were given a break on the tax for their healthcare plans.
That's about as far as it got by the end of last year, when the healthcare reform mess seemed to fall through...until now. This time, Obama's putting forward the worst idea yet: Price fixing.
Making a last-ditch effort to save his health care overhaul, President Barack Obama on Monday put forward a nearly $1 trillion, 10-year compromise that would allow the government to deny or roll back egregious insurance premium increases that infuriate consumers.
The Whitehouse website has more information at Policies to Improve Affordability and Accountability:
Both the House and Senate bills include significant reforms to make insurance fair, accessible, and affordable to all people, regardless of pre-existing conditions. One essential policy is "rate review" meaning that health insurers must submit their proposed premium increases to the State authority or Secretary for review. The President's Proposal strengthens this policy by ensuring that, if a rate increase is unreasonable and unjustified, health insurers must lower premiums, provide rebates, or take other actions to make premiums affordable. A new Health Insurance Rate Authority will be created to provide needed oversight at the Federal level and help States determine how rate review will be enforced and monitor insurance market behavior.
Having to submit a pricing scheme to a government-run rate review board is an old idea that has been discredited over and over. It's pretty much the same sort of price control regime that held back the airline, trucking, and rail freight industries for decades until the deregulation of the Carter-Reagan era. I'm sure it will hold back healthcare.
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