The Spectacle Blog

Passing ObamaCare Was Just The End of the Beginning

By on 4.21.10 | 12:52PM

After Congress passed its landmark health care legislation, I noted that it was only the beginning. The worse the health care system gets because of the law, the more Democrats will be clamoring for further intervention. And wouldn't you know it, Senate Democrats are already trying to push separate legislation to regulate insurance premiums that will be driven up as a result of provisions of ObamaCare.

The new health care law imposes federal mandates on what type of benefits insurers have to offer --on top of the requirement that they cover people with preexisting conditions -- all of which will have the affect of driving up premiums. Under the deal struck with the industry, insurers agreed to accept more regulations in exchange for a mandate forcing individuals to obtain insurance as well as hundreds of billions in subsidies for the purchase of their product.

Yet now Democrats are worried that before all of the new changes go into affect in 2014, that insurers will jack up rates in the meantime. Their answer is a proposal by Sen. Dianne Feinstein that would give the Secretary of Health and Human Services the power to reject rate increases deemed unacceptable. It's similar to the idea President Obama presented in his final proposal, but that one had to be dropped because it couldn't be passed through reconciliation.

The New York Times reports:

Mrs. Feinstein said her bill would close what she described as “an enormous loophole” in the new law. And she said health insurance should be regulated like a public utility.

“Water and power are essential for life,” Mrs. Feinstein said. “So they are heavily regulated, and rate increases must be approved. Health insurance is also vital for life. It too should be strictly regulated so that people can afford this basic need.”

Sen. Tom Harkin also said that, "Protections must be in place to ensure that companies do not take advantage of current market conditions before health reform fundamentally changes the way they do business in 2014.”

Of course, the reason why the changes to the market won't take place until 2014 are entirely the result of a choice made by Democrats to game the Congressional Budget Office. By delaying the bill's major spending provisions, it made the legislation appear cheaper under the CBO's 2010 to 2019 budget window.

And as the Galen Institute's Grace Marie Turner says, simply having the Secretary of HHS put price controls on insurance won't work: "Capping premiums without recognizing the forces that are driving up costs would be like tightening the lid on a pressure cooker while the heat is being turned up."

Of course, this is just one example of many we'll be seeing in which Democrats will push for additional government intervention in an attempt to correct problems caused by government. Elsewhere, for instance, House Energy and Commerce Chairman Henry Waxman is talking about reviving the public option if the insurance exchanges don't produce enough competition. Of course, it's kind of hard to produce real competition when all insurance policies on any exchange have to meet the design specifications of the federal government.

So, to sum up, with one hand, Democrats want to regulate insurers like public utilities, which don't have actual competition. And then, with the other hand, they want to use that lack of competition as a justification to create an entirely government-run insurer.

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