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The Spectacle Blog
Last week’s news that Anthem Blue Cross, California’s largest for-profit health insurer, was planning rate increases of up to 39 percent for March 1, has provided fodder for liberals to argue that it proves why we need to pass Democratic health care legislation. The Los Angeles Times, which first reported the story, editorialized that, “Anthem’s actions offer the best argument yet for Congress to complete work on a comprehensive bill without delay.”
But in reality, the news proves the exact opposite — why we need to scrap the liberal vision of health care legislation and move toward a market-based approach offering real choice and competition.
Anthem’s policyholders are held hostage by the company’s rate increases as a result of existing bariers put in place by government. Because the tax system is rigged in favor of those who obtain insurance through their employer, we’ve never been able to develop a true individual market for health insurance, as we have in other sectors of our consumer-driven economy. In addition, the federal government bars the sale of insurance across state lines, which limits choice even further. On top of that, because of the heavy regulations that states put on insurers in the individual market, only larger companies who can afford to pay the compliance costs are able to remain in business. If you were to change the tax code, allow interstate purchasing of insurance, and remove the bariers to entry for smaller players, it would create a lot more competition in the market, and Anthem wouldn’t be able to get away with hiking rates so dramatically in California.
The Democratic health care bills create the illusion of more choice by setting up exchanges, but those exchanges would be government-run, and each of the policies offered would be designed by government, which would dictate what benefits would have to be covered. It would also favor the large insurance companies who can bear the cost of the new regulatory regime. It’s no surprise that in November, the Congressional Budget Office estimated that if the Senate health care bill were enacted, premiums in the individual market would be 10 percent to 13 percent higher in 2016 than they would be if no bill passed. In dollar terms, that would mean that a typical family policy would be $2,100 a year more expensive.
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More Blog Posts by Philip Klein
http://spectator.org/blog/2010/02/12/why-anthems-rate-hike-makes-th
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Mary Louise| 2.12.10 @ 2:44PM
Despite the truth of what you've written here. The common man has to have buying power. I have no idea if all you've laid out would increase his buying power. It would have to increase it by a bit.
Eastman Kodak employed 30,000 men and women in my area at one time. We had Xerox too. And Bausch and Lomb. All of these wonderful employers provided the common man with the ability to put food on his table and send his kids to college.
Somehow you have to restore the possibility of this kind of health. And absent reform of education, prudent deregulation, prudent military aims, and above all, honestly addressing the issues, I really don't see the possibility of improvement.
Pingback| 2.12.10 @ 3:48PM
http://blogs.reuters.com/james-pethokoukis/2010/02/12/insta-analysis-2/ links to this page. Here’s an excerpt:
ACynic| 2.12.10 @ 5:22PM
How come chicken, steak, apples, bread, etc., do not cost about $ 25 / lb. ?? After all, food is an essential item; as is health insurance.
How come homeowners insurance does not cost $10000 / year?
Because all these items and services exist, for the most part in very competitive markets and, in which, individuals make the buying decision.
Also, there is pricing tranparency.
These attributes are impeded, or prohibited, by government as regards providing health care services and health insurance.
The result of this is rather clear; higher costs and more inefficiencies.
Yes, in the same manner the needy require food stamps and housing assistance, the same can be provided as regards health insurance and health care.
The govt. ALWAYS F#@%S THINGS UP.
WarKingRoy| 2.13.10 @ 4:49PM
I wholeheartedly agree with you, especially with your somewhat un-PC (which I love, and for which I salute you!) conclusion.
Pingback| 2.13.10 @ 1:30PM
The American Spectator : AmSpecBlog : Why Anthem's Rate Hike Makes … Staff links to this page. Here’s an excerpt:
Pingback| 2.13.10 @ 8:51PM
What Makes a Person Intelligent? links to this page. Here’s an excerpt:
Albert A. Turner| 2.14.10 @ 11:25AM
Read this blog and then and read the LA Times articles on this story and nowhere other than the statement that the rate increases are due to rising health care costs do I see a reason/reasons.
Why are these costs rising? And what is the % of costs that are rising? 15 % 20 % 30 %? Is it because of "free" government health care? Is it because of more use of the system by the plan holders? Or is the insurance company dumping costs of non-paying persons on the people who pay for insurance?
Many, many questions need to be asked and answered.
Pingback| 2.14.10 @ 3:32PM
David Cook – National Anthem – KC Chiefs | Kansas City Chiefs NFL Announcer links to this page. Here’s an excerpt:
Spicy Joker| 2.14.10 @ 11:11PM
It's true that there is no true free market for individual insurance plans. But Anthem's proposed 39% rate hike - now pushed back to May due to public outrage - is not just the result of an unfree market; it is the result of greed. The rate hike is completely unnecessary because Anthem's profits skyrocketed last year and more than offset rising medical costs.
Dawn| 2.18.10 @ 5:53PM
Anthem's 'skyrocketed' profits last year came from the one time sale of a company that it owned. The truth is Anthem lost 59 million in California due to the laws that pasted to extend COBRA benefits beyond the 18 to 36 month limits and capped pricing on the COBRA plans.
You can't have it both ways. You can't make a profit on your IRA stocks unless the 'for profit' companys make money. If you pass laws that pass the burden to the insurance campanys and do not expect them to try to recoup the money in other areas they will lose money and your IRA will lose money as well.
It's a bit of the having the cake and eating it too. Someone still has to pay for the cake.