-
A Plea to the New Republican Majority
September 22, 2010 | 19 comments
-
Another Federal Giveaway to Unions
September 2, 2010 | 2 comments
-
Redistricting
January 25, 2010 | 5 comments
-
They Still Don’t Get It
January 17, 2010 | 21 comments
-
Sir Richard Peers Out the Window
December 22, 2009 | 19 comments
The Spectacle Blog
The appalling ignorance in Washington about insurance issues is underscored by President Obama’s sudden interest in having federal oversight of health insurance premiums. Once again, these people do not have the slightest idea of what they are doing. One company (WellPoint) issues rates that Obama thinks are too high. But his reaction is based on nothing. He has no idea if the rates are too high, too low, or just right. It is a political temper tantrum -- period.
So he wants federal oversight and looks for excuses to justify his position. One reason cited by Kaiser Health News is that, “more than half the states allow insurers to implement rate increases without first obtaining state approval.” Well, yes they do. But that doesn’t mean there is no oversight. There are two approaches to rate regulation. One is “Prior Approval,” whereby the regulator has to approve the new rate ahead of time. The other is “File and Use,” whereby the rate goes into effect UNLESS it is denied by the regulator. In either case the regulator has the power to deny a rate increase. The only difference is what happens if the regulator takes no action. In one case it defaults to denial and in the other case it defaults to approval.
As I said, this is public policy driven solely by crass politics. The Kaiser story says, “In the past two weeks, Obama administration officials have tried to build public outrage over recent insurance rate hikes in the individual health insurance market, especially a 39 percent increase sought by Anthem Blue Cross of California, the largest for-profit health insurer in that state.” They have no interest in why these rates went up 39%, they just want to use it to inflame public opinion.
The New York Times reports, “Mr. Obama is seizing on outrage over recent premium increases of up to 39 percent.” So, Kaiser says Obama has “tried to build public outrage,” and then the NY Times says he is “seizing” on the outrage he has built. The Times goes on to explain, “The president’s bill would grant the federal health and human services secretary new authority to review, and to block, premium increases by private insurers, potentially superseding state insurance regulators. Officials said they envisioned the provision taking effect immediately after the health care bill is signed into law.”
Also in the New York Times, WellPoint CEO Angela Braly explains that “higher premiums were justified by soaring medical costs and added that, “health care providers were charging more to the private sector, “including our members,” because payments from Medicare and Medicaid did not fully cover providers’ costs.” She also explained that many younger and healthier enrollees have dropped their coverage because of the recession. They have higher priorities when finances are tight.
Importantly, she noted that premiums in New York are double what they are in California because of New York’s guaranteed issue and community rating requirements – which Congress wants to apply to the entire country.
And John Graham of the Pacific Research Institute notes that while some people in California are getting a 39% premium increase others are getting a 20% cut. It is curious how we hear about one but not the other.
Look, folks, this is all about as dumb as can be. The fact is that insurance companies set rates based on what they pay out. There is no other way to do it. Sure administrative costs may be too high and that is part of the reason to support HSAs – it is far more efficient to minimize the amount of services that go through an insurance mechanism. But even if admin costs could somehow be slashed to zero, the rate increases from underlying costs would still be substantial.
Adding federal oversight is nothing but a political stunt. How is the Secretary of HHS supposed to know anything at all about local market conditions in San Berdino, California? If she denies a rate increase and the company goes out of business as a result, who will suffer? Not her. It will be the policyholders.
When you add in the McCarran-Ferguson repeal, things get really wacky. Currently the states have very elaborate and time-tested ways to deal with insolvent insurance companies. They go onto receivorship and the state guaranty fund kicks in to cushion the blow for policyholders. If we have federal regulation of insurance companies an insolvent company will be able to file for bankruptcy in federal court (they cannot do that currently.) That means the policyholders will get no relief whatsoever.
The gross incompetence coming out of Washington these days is simply stunning.
View all comments (29) | Leave a comment
Leave a Comment
More Blog Posts by Greg Scandlen
http://spectator.org/blog/2010/03/04/federal-rate-review
Follow us:
ADVERTISEMENT
Current Issue
- Background to the Financial Crisis
- Mission Implausible
- Barney Shuffles Off
- Digital Subscription (Save 78%)
- Buy a single issue (Save 50%)
- Send Spectator as a gift
Clip of the Day
ADVERTISEMENT
Conservative Bob| 3.4.10 @ 8:46PM
You must take them at their word Greg. The messiah’s spokesman Gibbs said yesterday they will “do whatever it takes”, they mean that quite literally. Lie, slander, bribe whatever it takes, without limit or remorse.
It doesn’t matter how they get it done or quite honestly what they pass other than the essential basic framework be included.
Once in place they will “fix” it as deemed necessary over time. Just get something anything passed into law NOW.
Missy| 3.4.10 @ 9:08PM
I've read that California Blue Cross insurance rates increased 39% because California's unemployment rate has skyrocketed under Obama.
Those who've lost their jobs have also lost their insurance coverage--resulting in higher insurance rates for those still employed.
It's Obama's fault.
BTW--that's San Bernardino, California.
Pingback| 3.4.10 @ 11:04PM
The American Spectator : AmSpecBlog : Federal Rate Review? « Insurance Rate links to this page. Here’s an excerpt:
Pingback| 3.4.10 @ 11:44PM
FTC Settles with Advance-Fee Credit Repair Service | ecreditdaily.com | FinanceBlogr links to this page. Here’s an excerpt:
PCC| 3.5.10 @ 12:28AM
Part of the problem is that President Obama and his allies have been allowed to get away with recasting this debate in terms of the cost of insurance rather than the cost of healthcare.
Inge| 3.5.10 @ 4:41AM
I am crippled; receive Social Security pmts; and have medicare. My medicare premium is $124; my income therefore is $899 per months;I live in California.
I stated this, because here is the deal: Not many places take medicare anymore because of the low payments; there are a few, and when I go to the doc; I usually get my pay, the 20% medicare does not pay. Living in California is expensive, and when I get the bill, I have to make payments; I just don't have enough money, and can't work.
Looking what the Obami are trying to do is disgusting; should they get their way, I fall wayside, and wonder where I can go for medical help.
Obama has no clue of real life issues, and the hardship he causes.
SoCon| 3.5.10 @ 4:59PM
God bless you, Inge--I wish your life were easier.
Tenn Slim| 3.6.10 @ 8:50AM
INGE
bt
Indeed the OBNA has no clue. Calif Pols have no clue. BUT you and yours are not alone.
Sympathy and empathy do not pay the bills.
bt
You obviously have access to the Net. Google NGOs in calif, with your specifics. There are always avenues to get help, positive help and positive aid. No dependency, just good solid help.
Sites such as these fully grasp the OBNA attitude and there are others out there.
TRY....HARD...
Semper FI
end
Inge| 3.5.10 @ 4:44AM
I made an error in my comment; I get a bill for the 20% medicare does not pay; its high when you a chronic issue. Many people I know can't even pay it; and I believe that is part why premiums go up here in California.
Becky| 3.5.10 @ 7:08AM
Sometimes it is not the president or his buffoons that bother me, as much as the press that is supposed to be sharp and investigative.
Tenn Slim| 3.5.10 @ 8:59AM
Opine
bt
Article was incisive, accurate and missed the OBNA motivational point.
1. CONTROL of the FISCAL Entity, regardless of product is the OBNA Goal.
2. The OBNA is NOT dumb, although they certainly seem so. OBNA is composed of Leftists who have been analysing the USA System for years.
3. The OBNA goal, is to stir the emotional USA Electorate, to control the MSM, to facilitate the implementation of FISCAL and REGULATORY controls across the entire USA Economy.
bt
Given the obvious, we are seeing the long sought goals and agendas of the folks that dearly need to see the Demise of the USA Capitalistic system.
Said this multiple times here, and the message seems to get lost in the Key board dust.
bt
READ THE HISTORY folks, we have seen this before, and untill the Left is put back into thier cage, we will continue to see the "Arrogant Ignorance" displayed.
WE WILL PREVAIL COME NOVEMBER 2010
Semper Fi
end
Inge| 3.6.10 @ 10:49AM
Thanks my man, and i assume you were a Marine, retired or actove; however I thank you for your service!!
You are absolutly right, I am thankful of having a computer, and reading the spectator every morning, running into these trolls with the same talking points. They drive me nuts, but you know there is no point debating them. In my eyes, they are hopeless!
Ken (Old Texican)| 3.5.10 @ 11:53AM
Slim,
you hit on one of my favorite descriptive phrases.
"The arrogance of ignorance"
Pingback| 3.5.10 @ 11:01PM
Arizona Senate Primary Race, Polls: McCain Hayworth (GOP 2010 … | Educational Arizona links to this page. Here’s an excerpt:
Gigi| 3.5.10 @ 11:27PM
Inge, how is Obama responsible for your medical problems? You are one of the people he's trying to help. It is pharma and big insurance who want the government out of health care. They are the ones spreading all these "death squad" and other ridiculous accusations against health care reform. We will all be without insurance if someone doesn't try to change the current unsustainable health care system soon. Businesses have and will continue to drop insurance coverage on their employees if reforms aren't made to the current system. And another thing, conservatives. Abortions are wrong because they destroy a life? If so, are not the lives of those with no insurance just as important? People are dying because they can't afford medical care. But that's ok apparently. Health care for everyone is just the right, ethical, and moral thing to do.
ZerObama| 3.6.10 @ 12:19AM
Health care is not a right just because you say so. Americans have rejected ObamaCare by two to one--why doesn't that bother you, Gigi?
Who are you to force your wishes on a majority of Americans? Not very 'democratic' of you, is it?
Why can't we help the 10% without insurance without destroying the good insurance coverage of the other 90%? This is an arrogant Leftist power grab not a health care bill.
No one said anything about 'death squads' but 'death panel' is just a term for rationing which will surely result if ObamaCare passes--and people will die because of it.
Obama has already cut deals with Big Pharma and Big Insurance, you're a fool to believe they are your enemies. You're just another braindead, easily manipulated liberal who doesn't know how to think for yourself. You're in the minority, too.
Inge| 3.6.10 @ 8:47AM
I don't want Obama meddle in my affairs; even though I don't have much, I'm still happy, and content in what I DO have, and that incl my doc; I am never able to pay him all the money I owe, He still treats my 'chronic symptoms assoc with my disability'. I don't need Obama, and his clown to get in between in his attempt to 'manage' my needs, and eventually denies the care I do have. Knowing how he handled the GM dealerships, shutting down those, who did NOT vote for him, what guarantee do I have in receiving care under his plan, since I detest Obama?
So don't come along with this lame game, going off subject; nobody is responsible for medical condition other then life experiences which I deal with as it comes along.
I specially do not need pity.
Pingback| 3.6.10 @ 8:40AM
New York Judges Slam Baum Law Firm and JP Morgan Chase Citing … | Duval County FL Rea links to this page. Here’s an excerpt:
Gigi| 3.6.10 @ 6:44PM
Inge, you detest him? Why? Maybe because he's black? And I don't pity you.
Missy| 3.7.10 @ 2:43AM
Accusing someone of being a racist because you've lost an argument with him is cheap, Gigi. Shame on you.
There is no reason to pity Inge, he has dignity and honor--qualities you know nothing about.
Go back under your slimy HuffPo rock; your liberal nastiness is not welcome here.
Gigi| 3.7.10 @ 12:25AM
Oh, and by the way Inge. You wouldn't happen to take government money for your disability, would you? And you wouldn't happen to have government paid health care, huh? It's ok for you to have it but not for others who really need it and will die without it.
Missy| 3.7.10 @ 2:44AM
You are an ugly person; people like you are destroying our country. Loser.
Pingback| 3.8.10 @ 11:00PM
The American Spectator : AmSpecBlog : Federal Rate Review? CCJS On Me links to this page. Here’s an excerpt:
Pingback| 3.9.10 @ 8:19AM
The American Spectator : AmSpecBlog : Federal Rate Review? Federal Me links to this page. Here’s an excerpt:
Gigi| 3.22.10 @ 10:45PM
Woohoo! Health care reform. I'm loving it losers.
Trackback| 5.8.10 @ 4:06PM
new outdoor wireless security camera information, on new outdoor wireless security camera information, links to this page. Here’s an excerpt: