One of the more amusing quotes to come out of the healthcare reform debate was this Nancy Pelosi classic, "[Congress has] to pass this bill so that you can find out what's in it." How refreshing and revealing the unvarnished truth can be.
The bill did indeed pass, under a dark cloud of payola and a murky if not altogether misleading promise of “cost savings.” Some of what was in the bill was public knowledge, including billions of dollars in Medicare “cuts” that won’t really happen. Now, faced with unconstitutional provisions in the bill, misleading savings information, and an unenforceable and unconstitutional mandate that every American must buy insurance or pay a penalty, the maneuverings of Congress and the Administration are beginning in force.
Wall Street Journal
According to the and others, the Senate health committee is “debating a bill that would give states the power to reject premium increases that state regulators determine are ‘unreasonable.’ The White House proposed this just before the final Obama-Care scramble, but it couldn’t be included because it violated the procedural rules that Democrats abused to pass the bill.”
Though many states already include premium rate reviews as part of state regulations, this authority is rarely used. The reason is simple: imposing rate controls on private entities could lead to insolvency and bankruptcy of the companies in question. (Public utilities that are heavily regulated have relatively predictable costs and enormous physical-plant-related barriers to market entry; health insurance does not.) In the case of large health insurers, damage to the local and state economy could be severe. In an unfettered market, when the price of providing a commodity goes up, those providing the commodity must have the ability to raise the price to the end user. If the price of copper goes up, and the sellers of copper wire keep their price the same, those sellers will soon be out of business.
Healthcare isn’t that much different. When the cost of insuring people goes up, premiums go up along with it. Several of the provisions of ObamaCare that go into effect immediately will undeniably lead to higher healthcare costs, including expanding coverage to children up to age 26. The Democratic Party, terrified that skyrocketing premiums will further show what a sham healthcare reform is, are seeking to block premium increases across the nation. The idea apparently is that if you can’t keep actual costs down through the use of fuzzy math, the least you can do is force insurers to take losses. The Administration won’t admit it, but heavy regulation of the health insurance industry is another step toward a single payer system.
The Democrats and the Administration don’t mind squeezing health plans, which are notoriously unpopular with the public. But there’s a catch that is kind of interesting. Poll after poll has shown that while Americans generally disapprove of health plans, they like their own plan. People may not get the warm-fuzzies when they think of competing plan B, but don’t take away their current plan A. How will they react when plan A goes under?
Of course, it’s unlikely that Aetna, Cigna, or Humana will go belly-up in this scenario. But increased costs, which are a certainty under the plan despite the political promises, will have to be borne by someone. (Even the Administration’s own Medicare actuary, Richard Foster, recently said that although several provisions of ObamaCare would help reduce health care cost growth, the impact of those provisions would be “more than offset through 2019 by the higher health expenditures resulting from the coverage expansions.”) And it won’t be the super-rich. I encourage anyone who thinks the wealthiest Americans can pay for the new entitlement to read Alan Reynold’s revealing Journal piece, “Why the Rich Can’t Pay for ObamaCare.”
Not that the Administration won’t try. Recently, the Senate Budget Committee passed a 2011 fiscal resolution that would raise the top tax rate on dividends from the current 15% to an astronomical 39.6%. This is on top of the 3.8% “surcharge” on all investment income that begins in 2013. That investment tax, of course, will touch many more than those who make more than $250,000. So much for that Obama campaign promise.
With each passing day, it becomes clearer that ObamaCare is a political and legal lightning rod, an economy killer, and an increasingly unpopular entitlement. Just wait until more people find out what’s really in the bill.
One of the more amusing quotes to come out of the healthcare reform debate was this Nancy Pelosi classic, “[Congress has] to pass this bill so that you can find out what’s in it.” How refreshing and revealing the unvarnished truth can be.