So, does Obamacare have price controls on insurance companies?
The Associated Press is reporting today that Massachusetts insurance commissioner Joseph Murphy is effectively instituting insurance price controls statewide, forcing insurers to absorb health-care inflation by themselves (h/t Mike Shedlock):
Insurance Commissioner Joseph Murphy said he had rejected 235 of 274 proposed rate increases because they included “excessive increases and rates unreasonable relative to the benefits provided.”
Blue Cross Blue Shield of Massachusetts, the state’s largest private insurer, said in a statement: “We share concerns about the current rate of premium increases, but arbitrary government price controls will not solve the problem and will likely cause unintended harmful consequences.”
Michael Widmer, president of the Massachusetts Taxpayers Foundation, which represents insurers, health care providers and an array of area businesses, termed the action “arbitrary and capricious.”
President Obama's new healthcare overhaul plan would give the federal government greater authority to stop rate increases imposed by health insurers, an administration official said late Sunday.
The proposal, to be posted on the White House website Monday, would give the Health and Human Services secretary power to block premium increases that were deemed excessive.
It also would set up a panel of experts charged with evaluating the healthcare market each year and determining what would constitute a reasonable rate increase. The board's members would include consumers, doctors, economists and insurers.
Under the president's plan, rate increases outside the reasonable boundaries established by the board could be overruled by the secretary, who would also have the power to require the insurer to revise its proposed rate changes or to order rebates for customers who overpaid.
So, as of right now, there are no price control mechanisms passed.
As of now, the panel is only authorized to review rate hikes and make recommendations to state panels about whether or not to approve them. If President Obama and the sponsors of this bill get their way, there will be strong price controls.
Are you agreeing that strong price controls are bad, or are you just pointing out that they (unfortunately) haven't been enacted yet?
But after that, they will have to raise rates dramatically, in order to catch up with several years of health care inflation.
Unfortunately, the new law focused on expanded coverage but really did not begin to tackle the structural issues concerning medical inflation. Indeed, doing so would be far more controversial than the new law was. Yet, IMO, it is that omission that was the biggest defect by far in the new health care law.
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