Insurance Space

To hear President Obama tell it, insurance companies are forcing up the cost of everyone’s health coverage. The solution: Whatever health care reform plan that actually makes it out of Congress.

The concepts in the House and Senate versions seem clear, but the final details aren’t. President Obama, however, says the bills’ concepts for regulating the insurance companies will make coverage more affordable.

Reality will likely be another story. For one thing, the final details must be passed by both houses of Congress, where many members have taken large campaign contributions from the very insurance companies that they supposedly will regulate.

We are in what appears to be the final stage of a year-old political fight to “reform” the health care system. Demonizing your opponent is common practice. Few will argue that the insurance companies and their practices are not a big part of the problem.

Still, the current debate skirts an economic fact: The surest way to keep insurance rates down is to lower costs. The Senate bill authorizes experiments that could save money over time, but overall cost control is being left for another day. Capping rates without controlling costs is bound to drive some insurers out of business – thereby reducing competition.

Massachusetts, in its universal insurance system, didn’t contain costs when it mandated individual coverage. Today, many working people cannot afford the rising premiums. That can happen again.

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• Obama slams greedy health insurance companies
• Health Insurance Reform
• Health Insurance is Expensive as Health care
• Senate passes broad health reform bill
• Union Heads Warn of Political Toll for Backing U.S. Health Tax

Tags: Insurance, insurance companies