Tuesday, February 23, 2010

Health Insurance Rate Authority

President Obama was only 12 years old in 1973 during the OPEC oil embargo, so he may not remember the effects of price controls on gasoline availability. Having just obtained my driver's license, images like those below are seared into my memory.

Clearly the President has failed to make the connection between price controls and shortages. What else could account for his proposal yesterday to establish a Health Insurance Rate Authority?*

Attempts to deal with the gasoline shortage included closing gas stations on Sunday, and restricting customer access by allowing gas purchase only every other day for odd and even numbered license plates.

Does President Obama have something similar in mind medical care? Emergency rooms closed on Sundays. Monday, Wednesday and every other Friday if your Social Security Number is odd. Even numbers can have appointments Tuesdays, Thursdays or alternate Fridays. Saturdays are first come first serve--bring your own chair for while you wait.

We don't have to go back to 1973 to see the results of price controls--just to last November in Zimbabwe:

Zimbabwe price controls spark food shortages

The staple maize-meal, sugar and cooking oil have disappeared from most shops in Harare's city centre and suburbs while most pumps at fuel stations have run dry, forcing motorists to brace for long queues.

Maize-meal supplies were already erratic in the country in recent months with supermarkets out of stocks for days on end and long queues quickly form where the commodity is available.

Anger and sarcasm are justified. It is hard to believe that the President's policy recommendations are based on mere ignorance of such a basic economic concept, especially when one simple lesson can explain it so clearly. Alternative explanations are not pleasant.

Write to the President and all of your legislators, federal and state.

Silence is implicit agreement.

Before it was just gasoline. Now it is our very lives which are at stake.

President's Proposal pg 3: Strengthen Oversight of Insurance Premium Increases. Both the House and Senate bills include significant reforms to make insurance fair, accessible, and affordable to all people, regardless of pre-existing conditions. One essential policy is “rate review” meaning that health insurers must submit their proposed premium increases to the State authority or Secretary for review. The President’s Proposal strengthens this policy by ensuring that, if a rate increase is unreasonable and unjustified, health insurers must lower premiums, provide rebates, or take other actions to make premiums affordable. A new Health Insurance Rate Authority will be created to provide needed oversight at the Federal level and help States determine how rate review will be enforced and monitor insurance market behavior.

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