Tag Archive for 'reuters'

This from Reuters:

President Barack Obama will warn health insurance industry executives at a White House meeting on Tuesday against imposing big rate increases ahead of tighter rules under the new U.S. healthcare law, The New York Times reported.“Our concern is that they not try and, under the cover of the act, get in under the wire here on rate increases,” Obama’s senior adviser David Axelrod told the newspaper.

The White House is concerned insurers will blame the new law for premium increases that really are intended to maximize industry profits, the newspaper said.

“Our message to them is to work with this law, not against it; don’t try and take advantage of it or we will work with state authorities and gather the authority we have to stop rate gouging,” the newspaper quoted Axelrod as saying.

This is deeply troubling, and I fear, a sign that my dour predictions two years ago may finally be coming. Here is the pattern that has been historically observed:

• government intervenes in a sector of the economy
• said intervention causes/augments imbalances and booms/busts
• government blames individuals, voluntary collectives or the marketplace itself for consequences of intervention
• government further intervenes, eventually by attempting to control prices
• price controls lead to shortages and even higher prices
• shortages lead to either industry failure or (if industry is fundamental to human survival) civil unrest

Is the White House deluded enough to think that by forcing company to pay for pre-existing conditions, that this will have no cost whatsoever? Covering pre-existing conditions will destroy the insurance industry – it will no longer be insurance, which requires risk. What will still be called “insurance” will actually just be welfare. And the providing of welfare by for-profit companies, which need to at least break even to survive, will lead to their premiums reflecting this. If their premiums don’t, then they fail.

Obama’s heavy-handed police-commissar approach is only going to make things worse. It reveals the fact that Obama thinks he can make the market function by naked power alone.

Sorry America. Enjoy your premiums skyrocketing. And if they aren’t allowed to by the bullying of Obama, then enjoy the shortages and not getting timely access to quality healthcare. Man cannot fight against the laws of nature.