FixHealthCarePolicy

The President’s Health Proposal: Bringing Back Price Controls

In preparation for the Health Care Summit, President Obama unveiled his first official health care proposal. It is intended to reconcile the differences between the highly unpopular House and Senate bills. Curiously, President Obama’s latest iteration of the liberal health policy agenda includes more federal power: the power to control “private” health plan premiums.

Price Controls. According to the President’s proposal, a new “Health Insurance Rate Authority” would oversee rate review for private insurers, so that “if a rate increase is unreasonable and unjustified, health insurers must lower premiums, provide rebates, or take other actions to make premiums affordable.” On the face of it, this means price controls on health insurance.

The President knows the unhappy history of price controls, and the genuine misery- shortages, mainly- that such a policy guarantees. Think of the long, hot gasoline lines of the 1970s, courtesy of the Carter Administration. (more…)

Tags: health care spending, Health Care Summit, health premiums, President's proposal, price controls

Why the White House Is Wrong — Again — On Health Care Spending

Nancy-Ann DeParle, the Director of the White House Office of Health Reform, posted a note – ironically titled “Reality Check” – on the White House blog this morning claiming that a new report from the federal government’s health actuaries supports the administration’s position on health care reform.

But all that report says is that U.S. health care spending continues to increase – even though the rate of increase actually hit a historic low in 2008 (the latest year for which figures are now available). DeParle’s argument is basically this: We spend too much on health care, therefore the reform proposals currently in Congress will fix everything.

However, DeParle seems to have missed the actuaries’ earlier report on what those reform proposals will actually do – which is, to make health care spending grow faster, not slower. In particular, actuaries estimate that if the Senate health reform bill becomes law, total U.S. health care spending would increase by 0.7%, or $234 billion through 2019. And that’s after taking into account what little savings would be achieved by cutting Medicare benefits and encouraging employer to cut health benefits by taxing private insurance plans that are “too generous.”

(more…)

Tags: health actuaries, health care spending, Nancy-Ann DeParle, White House