Sally C. Pipes, of the Pacific Research Institute, writes a piece today for the Examiner about the Obama health care plan. Let’s just say it’s not at all complimentary.
But private plans would face significant disadvantages from the start. Legislators will impose a host of burdensome regulations on policies sold through the Exchange. This will drive up costs for companies that participate.
For example, Democrats have indicated that insurers will have to comply with “community rating” and “guaranteed issue” regulations in order to sell their policies through the Exchange.
Community rating prohibits insurers from setting premiums according to an applicant’s health status; instead, insurers must charge the same price to all members of a particular demographic group.
Guaranteed issue, meanwhile, forces insurers to accept all applicants, regardless of family history or pre-existing conditions. It’s easy to see how regulations like these drive up the price of insurance.
If there were a “guaranteed issue” law for fire insurance, no one would buy coverage unless his or her home was actually on fire. With health insurance, negative selection would be just as bad. Most patients would simply avoid purchasing insurance until they got sick. After all, if you can’t be turned down when you are sick, why should you bother wasting money on insurance when you don’t need it?
Sick patients cost more, of course. Insurance premiums would gradually become more and more expensive, because the only people in the insurance pool would be ill.
It’s a longish piece and the excerpt does not do it justice. Please head over and read the whole thing. I came away with one important fact from it: the game is heavily rigged. It looks fair, but it is not. Here’s a suggestion that will never be taken: make it level. Require the Obama plan to turn a profit or at least break even. Do not allow it to become a gaping hole into which taxpayer dollars are poured endlessly until all the money is gone.
Like I said, that one will never be taken.