THE SAPIENT SPARROW: conservatism for commoners

"What has always made the State a hell on earth has been precisely that man has tried to make it his heaven."–Holderlin


Recently, disturbing reports are emerging from Massachusetts.  Hopefully, these will make their way into the larger American consciousness.  Gov. Patrick (D) is attempting to not only control the prices of a private industry, but also to force private companies to sell their products within the state or face penalties.  Price controls are nothing new.  Coercing a business to sell products is.  Since Massachusetts can be used as a “mini-model” of what we can expect from “Obamacare”, if it is implemented, it would be wise to be aware of the progression of these events and closely watch how the Court rules in this case.

Carmen Balber of “Consumer Watchdog”, a “nonpartisan consumer advocacy organization”, provides some insight into how the Federal Government would seek to use regulations in the ACA to compel private insurance companies to act against their own best interests.  Whether or not these providers comply, they will eventually be put out of business.

“Massachusetts has quickly come to realize that when the government requires everyone to purchase a health insurance policy or face tax fines it must also exercise real oversight of what health insurers can charge. Now that Congress has followed in Massachusetts’ footsteps we need ‘prior approval’ regulation of all health insurance rates to make sure the prices insurers charge Americans for coverage are fair. Regulators’ close look at the numbers behind proposed rate hikes revealed that, in the case of Massachusetts small businesses, increases could not be justified,” said Carmen Balber, Washington  Director for Consumer Watchdog.

The insurers, themselves, would take issue with the assertion that “increases could not be justified”.  However, in the future, “justification” seems to be the standard that the Government will use to decide whether a private company can continue to operate, let alone thrive.  In fact, “Consumer Watchdog”

“ called for an expansion of the modest health insurance rate justification requirements in the federal health reform law to encourage prior approval rate regulation in the states, and provide a federal backstop where states do not act.”

In other words, if a State will not do what Massachusetts is now attempting to do to its private health insurers, then the Federal Government will.  Here is my question:  will any kind or amount of  “justification” ever be sufficient to convince the Government that rate increases are necessary?  And, a related question: what lengths would a company pursue to ensure that Government would be convinced?  Obviously, using straight facts made no difference in this case.  Nor does the Government need to justify its decision to deny an insurance company its request for price increases.  Read the commentary posted by reaganaut1, (emphasis added):

Posted on Saturday, April 03, 2010 11:42AM by reaganaut1

This is sort of similar to the bill that Mitt Romney, the Republican governor and now Presidential candidate, passed in Massachusetts,” President Obama said in a recent interview defending his national health-care plan—and few disagree, Mitt Romney excepted. So the Massachusetts preview of ObamaCare is all the more instructive after this week’s imposition of de facto price controls on its remaining private insurers.

On Thursday, Democratic Governor Deval Patrick’s insurance regulators announced that they had rejected 235 of 274 insurer requests for premium increases for individuals and small businesses over the coming year. This power has been on the books since 1977 but never used, and Mr. Patrick announced in February that he was dusting it off as an opening bid for rate-setting for hospitals, doctors and all other providers as well. The state’s health costs have risen to the nation’s highest since Beacon Hill passed the ObamaCare prototype that was supposed to reduce health costs.

The premium increases were “excessive and unreasonable,” Mr. Patrick said in a statement, though his insurance division issued no actuarial analysis to justify its decision. “Now, the big insurance companies will criticize this action,” he said. “But the fact is that for three years now, both they and health-care providers have sat around the table talking the issue of excessive cost to death and coming up with no solutions.” In other words, price controls are supposedly the only option.

Yet campaigns against the insurance industry are always the first political resort, as Mr. Obama’s assault on Anthem Blue Cross of California showed. In Massachusetts, however, the major insurers—Blue Cross Blue Shield, Harvard Pilgrim, Tufts Health Plan—are all nonprofits. The state itself calculates that they spend at least 88 cents of every premium dollar on the underlying costs of medical care, often more.

If the Government can do such things, then none of our private industries are safe from ultimate Government regulation and controls.  REMEMBER IN NOVEMBER!

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