Those of us who understand history and can do simple math knew there was no way that the costs of nationalized health care could be contained. That's why the Obama Administration has been eyeballing price controls for health insurance. Here's Ed Morrissey teeing up the ball:
Obama, Nancy Pelosi, and their allies wasted no opportunity to cast health-insurance companies as “villains” and profiteers, but the truth is much different. The health-insurance sector is already a low-margin industry with profits between 2-6% in any of the years over the last decade. Pricing has remained pretty close to the bone as it is, and in states with price-fixing schemes like Massachusetts, they’ve already begun to go out of business.Not so fast, Mr. Ed! If the battle over MassCare is a proxy for the coming war over Obamacare, there may be hope yet. From today's Boston Globe: "Rate cap for insurer overturned - Move a blow to Patrick’s health strategy."
In a blow to the Patrick administration, an insurance appeals board yesterday overturned the state’s cap on health premium increases for small business and individual customers covered by Harvard Pilgrim Health Care.Fixing prices was never a solution to curbing the rising costs of health care but it was just easier to vilify the insurance companies. What's Plan B, soon-to-be-ex-Governor Patrick?
The three-member administrative panel - which consists of attorneys who work for the state Division of Insurance - found that rate increases Harvard Pilgrim initially sought in April are reasonable given what it must pay to hospitals and doctors.
That ruling trumped the Insurance Division’s earlier finding that the requested increases were excessive, a view that reflects Governor Deval Patrick’s campaign to curb health costs.
Related - Pajamas Media: "Obamacare - get ready for the mother of all epic fails." H/T Maggie's Farm.
3 comments:
Comparisons of insurance company profit margins to to those of other industries are misleading. They operate under a different business model.
Health insurance companies don't manufacture and sell. Their revenue streams are from pocketing the difference between what they charge for premiums and what they reimburse, and earning interest off of whatever money they can float during that process. They can't control interest rates, so if they want to make more money they need to charge more and/or reimburse less.
So to fulfill their fiduciary responsibility to increase value to shareholders they charge their customers more and more while reimbursing for less and less.
You are pretty much tied to whatever your employer negotiates on your behalf, since individual plans are prohibitively expensive for most people.
So stay young and healthy. It makes this debate a lot less stressful.
I'm constantly amused by the idiots that think because a company in non-profit they don't need to make money, fallacious thinking to the nth degree.
Even non-profits need to keep reserves for business reverses and times of downturns. They pay competitive wages, benefits, physical plant upkeep and yes insurance.
Otherwise they are not ALLOWED to keep profits.
...Guy who never met a point he couldn't miss calling everyone else an 'idiot'...
...he pretends to be a libertarian while writing things like this: "How about I let you pay my share of the FDR→Obama all inclusive socialist American DEBT. I did fine without it except for getting my ass shot up in the Nam. That disability I'M TAKING."...
The burden of the cognitive dissonance must be extraordinary.
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