Tuesday, April 26, 2011

Sacramento Tries Its Best to Run California's Health Insurance Market

HealthyCal.org has this interesting piece on a bill that would give the state authority to reject increases in health insurance rates if it feels they're excessive. The bill is currently being discussed by the Assembly Health Committee. This hearing comes six days after the first board meeting of California's Health Benefit Exchange, a new government body intended to help people find low-cost insurance plans as part of ObamaCare. The article questions whether the state can effectively negotiate rates with health plans participating in the exchange while also regulating those rates.
There are many unanswered questions . . . If the state negotiates a rate with insurers, how could it deem that rate to be unfair? But if the exchange is effectively exempt from rate regulation, how is that fair to the rest of the market?
The broader point being made here is that the state doesn't have a clear understanding of how its own regulations and programs are supposed to work (we're sure that's strictly limited to health care). Which by itself should be troubling. But the article doesn't go nearly far enough. How are insurers supposed to operate when they're being squeezed by benefit mandates on one end and rate caps on the other? And what is the state's Plan B if their restrictions on premiums cause insurers to exit the market altogether?

If only there were some set of arrangements by which people could pay for the medical care they wanted, and that wouldn't be affect by the mistakes of bureaucrats in Sacramento. If only.


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