In our Medicare Shanda post yesterday, we explored how ObamaCare© really doesn't do much to actually rein in costs, focusing on how little transparency there is in allocating Medicare funding. But there's another facet we've previously explored, that of whether or not regulating insurance rates would actually help rein in the cost of health care.
As we suspected, not so much:
"Consumers, by and large, cannot be made better off with insurance rate suppression and other forms of insurance regulation according to a new report released today by the Pacific Research Institute."
[ed: The PRI is a California-based think-tank]
Now, this study focused on regulation of Property and Casualty insurance, but as regular readers know, P&C and health insurance are very similar, since they're both based on the principle of "indemnification." So it's not really a stretch to use the P&C lens to examine ObamaCare©'s draconian efforts to control health insurance costs (rates):
■ Regulatory efforts to suppress rates are likely to yield consequences that would increase costs and reduce consumer welfare.
■ Rate suppression is analogous to a tax imposed upon the market, which must be borne by someone; most likely not the insurers.
"(I)ncrease costs and reduce consumer welfare?" Check.
"(Tax) imposed upon the market?" Also check.
Pretty much spot-on, I'd say.
As we suspected, not so much:
"Consumers, by and large, cannot be made better off with insurance rate suppression and other forms of insurance regulation according to a new report released today by the Pacific Research Institute."
[ed: The PRI is a California-based think-tank]
Now, this study focused on regulation of Property and Casualty insurance, but as regular readers know, P&C and health insurance are very similar, since they're both based on the principle of "indemnification." So it's not really a stretch to use the P&C lens to examine ObamaCare©'s draconian efforts to control health insurance costs (rates):
■ Regulatory efforts to suppress rates are likely to yield consequences that would increase costs and reduce consumer welfare.
■ Rate suppression is analogous to a tax imposed upon the market, which must be borne by someone; most likely not the insurers.
"(I)ncrease costs and reduce consumer welfare?" Check.
"(Tax) imposed upon the market?" Also check.
Pretty much spot-on, I'd say.
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