Health plans across the country are leaving the small group and individual health insurance markets, forcing people to find other sources of coverage. In this paper, we provide examples of how millions of people in dozens of states already are being negatively impacted by the law — from New York to Colorado, Virginia to Florida, and Connecticut to Indiana.

The paper provides an overview of carriers leaving the market; the impact of Obama administration rules on the child-only health insurance market; the disruptions caused by rules governing health premium payouts and “grandfathering;” and the threats to the Medicare Advantage market. …

Some insurance carriers are leaving the market because of onerous state regulations, others are victims of a faltering economy, but the cascade has been accelerated by the rules that already have taken effect and the many more that are to come as a result of ObamaCare [HR 3590].

Read more: A Radical Restructuring of Health Insurance, by Grace-Marie Turner Galen Institute.

If you dislike your health insurer now, just wait until politicians impose price controls that make your insurer act like a slumlord. Expect worse customer service, skimpier plans, and more claim denials.

Price controls on rental properties encourage landlords to become slumlords. Forbidden from making a profit by renting at market rates, to make a living landlords must skimp on quality and service rather than please customers. The same will result from insurance price controls: lousy policies for people with preexisting conditions or for anyone who might get sick.

That is, everyone.

Read the whole article: Get Ready for Health Insurance Slumlords.

“We allow the insurance industry to run wild in this country,” President Obama declared on Monday. “We can’t have a system that works better for the insurance companies than it does for the American people.”

Yet Obama’s plan to tame health insurers would boost their business, protect them from competition, and guarantee their profits, all at the expense of consumers and taxpayers. It is therefore not surprising that the insurance companies, while they object to the president’s rhetoric and quibble over some of the details, are happy to be domesticated. Here are five ways in which Obama would help insurers while pretending to fight them.

Sullum lists the following:

• The individual mandate.
• The employer mandate.
• Subsidies.
• Regulations.
• Limits on competition.

Sullum continues:

As [Obama] himself notes, “they’re going to have 30 million new customers” thanks to the government’s mandates and subsidies. …

… Obama’s plan would use money forcibly extracted from taxpayers and policyholders to keep insurers healthy. He says this arrangement means “insurance companies would finally be held accountable to the American people.”

The collectivist language is telling. I don’t want insurance companies to be “accountable to the American people”; I want them to be accountable to me, as a consumer.

Read the whole article; it’s great: Insurers Gone Wild! Why health insurers welcome Obama’s plan to tame them.

See also ABC news: A Complicated Enemy: Obama Seeks to Vilify Health Insurers, Give Them $336 Billion Check.

(Reason article via the Institute for Health Freedom)

U.S. Sen. Michael Bennet is pressing colleagues to use a procedural tool known as reconciliation to pass health-reform legislation — and to include the controversial public-insurance option in the bill. …

“Much of the public identifies a public option as the key component of health care reform — and as the best thing we can do to stand up for regular people against big insurance companies,” said the letter, which so far has garnered signatures from six other Senate Democrats.

The last, desperate gasp would be to use an arcane procedure known as reconciliation to pass health care reform with just 51 votes. But doing so would require Senate Democrats to overcome all manner of procedural hurdles. Reconciliation cannot be used for policy as opposed to budgetary issues. That means Democrats would have to drop some of their more popular proposals like the ban on preexisting conditions. They would be left with a bill that did little more than expand Medicaid and other subsidies, raise taxes, and cut Medicare. How popular would that be?

A recent salvo against the insurance industry came in a missive from U.S. Rep. Betsy Markey, D-Colorado. From an email her office sent out Monday:

“For too many years the health insurance industry has been allowed to fix prices, collude with each other and wield monopoly control over us without fear of investigation.

“This week I’m introducing a piece of legislation removing the anti-trust exemption from the insurance industry. I’m proud to stand up for the patients against the kind of profiteering the insurance industry has so long enjoyed.”

The Denver Post reported this last week, and I submitted the following letter to the editor:

Instead of scapegoating a narrow antitrust exemption for paltry insurance competition, Representative Betsy Markey should confess to how she and her political allies have prevented competitive insurance markets in the first place.

The Post reports that Markey’s bill would “remove the antitrust exemption now enjoyed by health-insurance companies” (Feb. 5). This is misleading. The exemption, codified by the McCarran-Ferguson Act, applies only to practices constituting “the business of insurance,” that are “regulated by State law” and lack “an agreement to boycott, coerce, or intimidate.” The federal government can already restrict allegedly anti-competitive insurance company practices such as mergers and group boycotts.

Blame politicians for protecting insurers from competition. Because the tax code chains you to our employer’s plans, changing your insurance provider entails changing jobs or paying a stiff tax penalty. Further, politicians forbid consumers from buying more affordable policies available in other states. Repealing these controls would greatly benefit consumers.

For more, see:

Government Accountability Office, Legal Principles Defining the Scope of the Federal Antitrust Exemption for Insurance, March 4, 2005.

Eliminating Antitrust Exemption Will Kill Health Care Competition, Gregory Conko & Kevin Hilferty, Investors Business Daily, Novemer 4 2009,
and a well-referenced report by the same authors: Congressional Misdiagnosis: Why Repealing McCarran-Ferguson Will Harm Competition in Health Insurance Markets.

Swedish Health and Social Affairs minister Goeran Haegglund inaugurated the country’s first private pharmacy since 1971 in front of reporters and a small crowd in Stockholm on Sunday.

“After hard work for a long time, we are now ready to open the first pharmacy in Sweden which is privately owned since 1971,” he said.

The state-owned Apoteket chain of pharmacies was until Sunday the sole provider of prescription medication in Sweden, and was until November 2009 also the only provider of non-prescription drugs such as headache tablets or other over-the-counter products.

Read the whole article here.

Kate Paul, president and CEO of Delta Dental of Colorado, said that the House’s health care reform proposal would disrupt dental coverage for more than 815,000 Colorado children, limit competition for dental benefits and splinter patient-dentist relationships all over the state.

Paul said while she applauds Congress for tackling health care reform, she takes issue with a provision in the House bill that forces families receiving government subsidies for insurance to purchase children’s dental insurance from medical insurers, not specialty dental insurers like Delta Dental.

Essentially, politicians are saying that they know what’s best for parents when it comes to how they pay for their own children’s dental care.

Predators gain value by using force or threats of force. Politicians prey upon patients who prefer to finance their own medical care in “politically incorrect” ways. As a result, insurers need not compete for your business. Politicians punch you with a tax penalty for buying insurance directly from an insurer instead of through your employer. They prohibit you from buying affordable policies available in other states. They tax you more for paying cash for routine medical expenses rather than buying an expensive health plan with tax-deductible premiums.

Like a true predator, politicians support legislation that backs you into a corner — where as the patient, you are the consumer but not the customer. Hence, neither insurers nor doctors aim to please you. They cater to who pays them. Employers pay the insurers and insurers pay the doctors.

So don’t condemn for-profit insurance.  The profits are “anemic,” reports the AP.  Condemn insurers for supporting an un-free market, where profit is disconnected from pleasing consumers. Only in a free market insurers’ profits would depend on satisfying you, the patient, rather than satisfying employers and politicians.

The above was published in the Daily Camera (Boulder, CO) on December 5, 2009.

I should thank Ari Armstrong for this observation that influenced this article:

In a free market, profit means that customers happily pay for some good or service. It is only outside of that market context that profit is bad. For example, a Mafia boss might “profit” by killing people, or a politician might “profit” by doing favors for special interests.

Also, the title of a recent article by Jacob Sullum’s is an excellent phrase that we should become a meme: The Consumer Is Not the Customer.  It’s a great distinction, as we often use “consumer” and “customer” interchangeably.

See also “Down with the health insurers,” by Tim Carney (author of the just released book Obamanomics)and my blog post from a couple days earlier, How insurance companies can gain credibility

Harry Reid’s Senate health bill up for a procedural vote on Saturday, which could allow it to move forward to debate. (Yet Republicans are pushing to read the whole thing, which could take 34 hours!) In any case, be wary of how this bill will cut the deficit: remember how unreliable predictions of how much new government programs cost.  From David M. Dickson in the Washington Times:

As President Obama and Congress craft the largest national health insurance program since the creation of Medicare and Medicaid in 1965, they insist that the final product will add “not one dime” to the federal deficit.

But cost projections are notoriously unreliable, and history is filled with examples of federal programs – especially in health care – that cost far more than originally predicted.

In 1965, the House Ways and Means Committee estimated that the hospital insurance program of Medicare – the federal health care program for the elderly and disabled – would cost $9 billion by 1990. The actual cost that year was $67 billion.

In 1967, the House Ways and Means Committee said the entire Medicare program would cost $12 billion in 1990. The actual cost in 1990 was $98 billion.

In 1987, Congress projected that Medicaid – the joint federal-state health care program for the poor – would make special relief payments to hospitals of less than $1 billion in 1992. Actual cost: $17 billion.

The list goes on. …

“Models were not adequate to capture the complex interrelationships” among patients, doctors, hospitals, pharmaceutical firms, medical-device manufacturers and other major players in the health care system, he said.

The major actors – including patients, doctors and hospitals – quickly learned how to use Medicare to their best advantage, which caused costs to outdistance projections, said Joseph Antos, a health care policy analyst at the American Enterprise Institute.

Financial incentives affecting these actors played a major role.

“The most dangerous words you can utter in a doctor’s office are, ‘It might help, and it won’t cost you a dime,’ ” Mr. Antos said.  …

The most famous example of a federal health program coming in below estimates is Medicare’s Part D prescription-drug program, which Congress enacted in 2003. Part D’s actual costs have been lower than CBO’s estimates.

A major reason for this trend “is likely a reflection of the competition that’s occurring in the private market,” said CBO Director Peter Orszag, who is now the White House budget director.

The Medicare drug program “represents the one time Congress almost entirely relied on private competition to hold down costs,” said James Capretta

Read the whole article: U.S. health plans have history of cost overruns.

(Via David Boaz at Cato)

Supporters of the “public insurance option,” that is, government-run insurance that competes with commercial insurers sense opposition: People realize it’s unfair competition. You know, like playing basketball against a team of players who also function as the referees.

Either my post inspired someone at the Center for Medicine in the Public Interest to make following video or (more likely) someone there thought of it independently: