Ezra Klein comments on the Anthem Blue situation in California:
The Anthem Blue Cross saga appears to have a happy ending: After criticism from the administration, the insurer has delayed the planned 40 percent rate hike. That will give the company time to reevaluate whether it’s worth the blow-back, and I’d guess there’s a good chance it never takes effect at all.
But if this is a good outcome, it’s a not a good policy. The insured can’t depend on someone in the White House’s communications shop noticing when an insurer tries to screw its customers. What we need is an actual policy standing between the insured and the grim incentives of their insurers. That’s what health-care reform is meant to be, and the Anthem saga is a good example of how it would work.
He is, of course, correct that this is not good policy. Having politicians strong-arm businesses whenever anything happens anywhere that would go against that politician’s (or group’s) heuristic biases is ultimately a horrible way to run an economy. It reminds me of the hem-hawing from Congress over gas prices throughout 2008. They happened to be ridiculously wrong then…but there appears to be some ground to stand on here. Anthem Blue is, for all intents and purposes, part of an oligopoly designed to extract rents. Interestingly, this was the theme of last week’s episode of House.
However, I take issue here:
Finally, let’s say everything fails and the insurer decides to walk from the exchange. In the current situation, the people on Anthem’s plan have nowhere to go. They all have preexisting conditions, which means they either won’t be offered insurance or can’t afford the rates. Under health-care reform, they can go to any other insurer they please: They can’t be discriminated against, and they can’t be denied coverage. Losing their current insurance may be disruptive, in the same way that having your local grocery store close might be disruptive. But it will no longer be calamitous, or anything close.
Now, this wouldn’t be a bad statement, because it is true…but Ezra Klein also claims that the health reform bill will lower the price of health insurance. Both of these things can not be true at the same time — if insurers are forced to take on high risk, then average premiums are going to rise to compensate. Klein also believes that the bill will be deficit neutral, which is, of course, fantasy.
Bottom line: The health reform bill cements the status quo of insurers that simply exist to extract rents, and it expands coverage. Health care will be more expensive if the health reform bill is passed.
On a lighter note, Klein also has a excellent post about the British Parliamentary system.