An interesting news story in the New York Times last week points out the next step in the Obama Administration’s campaign to run American health insurance companies out of business and replace them with a government-run “Public Option.” The story, written by Robert Pear appeared on July 15th under the headline “Health Plans Must Provide Some Tests at No Cost.”
The news story indicated that the White House “issued new rules” that direct health insurance companies to provide many screening tests, blood pressure testing, diabetes screening, cholesterol screening, cancer screening, vaccinations, and prenatal care to customers at no cost. Under the new White House rules, insurance companies will be required to provide these services at no cost, with no co-payment, and no change in deductables.
The White House’s issuing “new rules” by which private businesses are now required to conduct their business raises the question (In my mind, if not in the New York Times’) of the president’s constitutional authority to perform such an action. A careful reading of Article II, Section 2 of the Constitution of the United States does not contain any language that could be construed as giving the president the authority to direct the actions of private businesses. Even those who contend that Article I, section 8, the so-called “Commerce Clause,” gives the government the authority to regulate interstate commerce must acknowledge that as a power of the legislative branch, not the executive. But this president has not let the question of constitutional authority bother him in any of the other issues he has dealt with in the last nineteen months, why should health insurance companies be different?
On the face of it, the White House action may appear to be welcome news for the oppressed health care consumer. But what are the real effects of these “new rules?” While health insurance company customers may not be required to pay for these free services, they will see the cost of these services reflected in higher premiums for their policies. The story in the New York Times indicated that the White House estimates consumers could expect to see increases of about one and a half percent to their premiums. The White House’s record of cost estimates for its pet projects has not been particularly accurate, not to say misleading or fraudulent.
But when the price for a scare resource or service is artificially driven to zero, a prudent student of economics can quickly predict what will happen to the demand for that scarce resource. Demand will skyrocket. People will have no reason to think twice about ordering this or that test or screening, and the insurance companies will be forced to spread the cost over all their customers in the form of increased premiums. But if the government can tell the insurance companies what services to provide for free, what is to stop them from telling companies what they may charge for their insurance premiums? One has to suppose that at least one of the 243 new bureaucracies created by the Obama Care bill will concern itself with approving or rejecting insurance premium increases.
This is just the first instance of “new rules” emanating from the White House. A month from now, they can require that health insurance companies pay for out-patient surgery, X-rays, MRIs, and any other service they can imagine. One can only imagine if the White House will determine that heart transplant surgery should be free of charge in future editions of White House “rules.”
With the government on the one hand requiring that companies provide certain services, and on the other hand controlling the price those companies can charge for the services, the companies will find themselves in a rapidly closing vice that will squeeze them out of business. And where will we turn when all the health insurance companies are put out of business?
The need for a “Public Option” will become clear. Insurance companies will no longer be able to provide the necessary services, so the government will have to step in to rescue us with the public option. Despite frequent denials by the president throughout the entire legislative process leading up to the passage of Obama Care, wasn’t that the objective of the Obama Administration all along?
No comments:
Post a Comment