On February 22, President Obama suggested the federal government should be able to regulate health insurance premiums. Michael Tanner of the Cato Institute claims that idea is hardly new, and hardly primed for success:
In 301 AD, the Roman emperor Diocletian imposed price controls on most commodities and professions in the empire. The penalty for raising prices was death. Yet the controls failed utterly, leading to shortages, more inflation and the near collapse of the imperial economy.
Now, nearly two millennia later, President Obama seems determined to demonstrate how little we’ve learned.
Yesterday, the president proposed giving the federal government the power to regulate insurance premiums. Undoubtedly, this will be politically popular — at least, in the short term. Insurance companies aren’t exactly America’s most loveable industry. Recent premium hikes will result in real hardship for many Americans.
There is, of course, a certain arrogance in the assumption that Obama, Nancy Pelosi and a bevy of government bureaucrats know exactly what something should cost. No doubt, as soon as they finish setting insurance prices, they’ll move on to negotiating Tracy McGrady’s contract renewal…
Insurers unable to charge more for an increasingly expensive product can be expected to trim costs in one of two ways:
They can drop their most expensive customers — in this case, the sickest, who consume the most health care. Many companies are already doing this, a major source of dissatisfaction with the health-care system. In fact, the president wants to prohibit companies from doing this.
They can cut back on their reimbursement rates to hospitals and physicians. But neither doctors nor hospitals, any more than insurance companies, are willing to operate at a loss. If payments fall below their costs, they’ll simply stop taking patients. One only has to look at government programs like Medicare and Medicaid to see how this works.
This health care situation is regretably complex. How do you think we should improve health care costs for Americans?
OK, we realize it’s February and the end of December/beginning of January were the times for the "top 10" lists for the past year or decade. But in looking at Indiana Chamber advocacy efforts, we couldn’t resist putting together some of the top issues in which we’ve been fighting the good fight for the business community. We didn’t rank them; that would be a really tough job.
According to a recently e-mailed article from Congressional Quarterly, GOP leadership is currently pondering a resurrection of the 1994 Contract With America. It appears as though Republicans are looking to define themselves as the 2010 election approaches, and they’re hoping for a mid-term coup following Democratic successes in recent years. Spearheaded by Newt Gingrich & Co., the 1994 version offered specific ideas on how a Republican Congress would govern by lowering taxes, reducing government, promoting entrepreneurship and implementing tort and welfare reforms. CQ writes:
The urgency to pass health care reform legislation is officially gone. House Speaker Nancy Pelosi says she "did not want to hurry a decision" and Sen. Christopher Dodd suggests Democrats "take a month to think about a path forward." This from the same people who imposed deadline after deadline throughout the past year. Credit a clear message from the voters in Massachusetts and rapidly declining poll numbers for the change in course.



