In the upside-down world of ObamaCare, politicians can force health-insurance companies to spend more yet blame them when premiums increase.
Today, President Obama extolled new “protections” included in the sweeping legislation he signed into law on March 23.
One category of “protections” requires consumers to purchase coverage for more and more expensive medical services (e.g., limitless coverage, requiring insurers to recognize ob-gyns as primary care physicians, coverage for “children” up to age 26). If consumers valued such “protections,” they would have already bought them – and if they’re not in a position to select their own coverage, Congress should have fixed that problem. Instead, Congress and President Obama forced consumers to buy them, and they are pushing health insurance premiums higher.
Another category of “protections” are actually just price controls. Beginning this fall, ObamaCare will force insurers to cover minors with expensive conditions and at the same time charge those families far less than the costs they impose on the insurer. Beginning in 2014, similar price controls will govern the entire market. Insurers will respond by avoiding, mistreating, and dumping sick people, because that’s what these price controls reward. Harvard health economist David Cutler, a sometime-advisor to President Obama, finds that health plans that provide quality care to the sick go out of business in the presence of those price controls. If you think insurers mistreat the sick now, just wait until ObamaCare takes hold. Along the way, ObamaCare’s price controls will increase premiums for young and healthy Americans.
Rather than take responsibility for its own law, the Obama administration is scapegoating insurance companies. According to The New York Times, “The White House is concerned that health insurers will blame the new law for increases in premiums that are intended to maximize profits rather than covering claims.” We’ve seen this before. Massachusetts enacted a nearly identical law, which also caused premiums to rise. State officials responded by imposing premium caps (more price controls!), which will force insurers to ration care. As Massachusetts’ Deputy Commission for Financial Analysis at the Massachusetts Division of Insurance put it, premium caps will be a “train wreck.”
Meanwhile, “The administration worries that escalating premiums will force more people drop their policies before the law is fully implemented,” writes the Associated Press. The administration is right to worry. ObamaCare is already increasing premiums, and in 2014, it will force insurers to cover you at standard rates even if you get sick, which creates an even bigger incentive to drop coverage.
Hmm…there’s gotta be someone the administration can blame for that, too.