Obama Plan to Cap Health Insurance Premiums Is Foolish
President Obama is set to propose limits and rollbacks on health insurance premium increases this week. This is stupid policy for a lot of reasons. For starters, insurers have to pass along increases in what they pay in claims. The way to reduce those claims isn’t to cap premiums but to encourage more efficiencies in the healthcare system.
I get it that people are pissed off about paying more in premiums. But insurance companies are in business and have to make a profit. Their profits aren’t obscene — they operate on slim margins as it is. They are not fleecing consumers.
Capping the limits will lead to consequences that Obama and his economically-retarded advisors won’t want. Insurers will have to use even more scrutiny in paying (make that denying) claims. They’ll also have to be more cautious about risks they assume, meaning they’ll tighten underwriting so that it’s more difficult to get coverage unless you’re in perfect health. Or even, where states allow them, adjust benefits accordingly — which means decreases in the amount of coverage and increased liabilities to the insured.
Judge these things by the results, not the intentions. Just as when state officials try to cap the price of any good or service, the result isn’t good for consumers — it invariably leads to a shortage. In this case, it will be a shortage of claims payments, benefits, or even available coverage for people with “routine” maladies for which underwriting otherwise wouldn’t be problematic. That’s no way to get more people covered in this country.
It’s time for the Democrats to get over their bizarre obsession with trying to micromanage our healthcare system and our health insurance sector. When are they going to do something meaningful to create an environment in which people actually want to grow their businesses and expand our economy? And when the fuck are they going to take a serious look at their own handiwork in growing and expanding government — which is much more egregious than the 3.4% margins health insurance companies are “guilty”? How about a goddamn cap on the growth rate of your government flunkies and their inflated pensions at all levels, Democrats?