Tuesday, June 29, 2010

Insurers Warned Not to Maximize Profits

The White House has a few words of warning for insurers. Going beyond even Teddy Roosevelt's absurd position, they chose to speak loudly and carry a big, spiked stick.
The White House is concerned that health insurers will blame the new law for increases in premiums that are intended to maximize profits rather than covering claims. The administration is also closely watching investigations by a number of states into the actuarial soundness of double-digit rate increases.

Gasp! Insurance executives want to make as much money as possible for their companies. Outrageous!

Of course, what the rulers are really concerned about is that insurance companies, offering the mildest of objections as they become Federal utilities (they're already state-level utilities), will actually speak the truth. That, we simply cannot have. Hence, the preemptive Chicago thug tactics.

Naturally, those tactics have to be disguised with a spoonful of sugar.
The point is that there are genuine cost-drivers that are not caused by insurance companies. But what is also true is we've got to make sure that this new law is not being used as an excuse to simply drive up costs. So what we do is make sure that the Affordable Care Act gives us new tools to promote competition, transparency and better deals for consumers.

The CEOs here today need to know that they're going to be required to publicly justify unreasonable premium increases on your websites, as well as the law's new website -- healthcare.gov. As we set up the exchanges, we'll be watching closely, and we'll fully support states if they exercise their review authority to keep excessively expensive plans out of their insurance exchanges.

None of this is designed to deprive insurance companies of fair rates. And as I mentioned when we were meeting with the CEOs, there are a lot of cost-drivers other than those that are within insurance companies' control.
And the Feds have the right to establish price controls, why?

Well, never mind that rhetorical question for now. Observe instead that, once again, the Obamites have declared their social-engineering based view that a company is only entitled to a profit if it somehow represents a public benefit, private benefit be damned.

You have to give them one thing: for politicians, they're astoundingly consistent.

1 comment:

Ted Amadeus said...

Somewhere along the line, you can expect this posturing to evaporate and the insurance establishment allowed a more-than-fair amount of gouging: The bill would never have passed if there wasn't a hefty chunk of collaborative profiteering between the Congressional pull-peddlers and their "private" sector looters.
Sinecure means sinecure for the new bureaucracy, not just the politicians promising it.