How Not Shocked Can I Be This Week?
So, you’ve legislated a huge change to the way the business of healthcare is done. You’ve increased the rolls of healthcare, but also limited ways to limit coverage in a way that will make basic costs go up. You’ve also done an ineffective job of ensuring that low-cost patients will actually sign onto insurance. Result, it’s likely that costs to the consumer will then have to rise. NOT!
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.
So California tried this with energy a few years back. They regulated the rates that power companies could pass onto the consumer, while simultaneously limiting the methodologies of actually buying power on the back end. Thus, there was at least one wonderful summer of rolling brown-outs while the power companies lost tons of money. This in part led to the Gray Davis recall and got California its current government. Dysfunction for dysfunction… that’s a fair trade. So the counterpoint?
Senator Lamar Alexander of Tennessee, the No. 3 Republican in the Senate, said: “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.”
Oh, that’s right. Healthcare currently makes the same approximate profit as your average grocery store, and congress is threatening to make them leave half their aisles un-stocked.
Price-fixing only succeeds in temporarily postponing the problem of cost control — because prices and costs are not the same thing. A price-fixing regulatory system will succeed in the long run only in forcing insurers into bankruptcy. Health insurers already operate on very thin margins. If they can’t raise prices to meet cost increases, they won’t make any profit at all, and all of their policyholders will wind up with no coverage.
Some will claim that this has been the intent of Democrats all along; they want to destroy the health-insurance industry in order to fully nationalize health care in the wake of the collapse of the industry. Whether or not that has been their intent, they couldn’t have possibly gone about destroying the industry in any better manner than what we’ve seen over the last year.
Bruce McQuain from QandO:
Of course, you never saw this coming, right?
Of course we saw it. We all saw it. But that doesn’t mean we’re going to be happy when it happens.