Trib Op-Ed Obama Health care:Truth at a premium

Like it or not, ObamaCare comes at a price

President Obama's health care reform plan, enacted in March, is not terribly popular with the American people. In a recent CNN poll, 56 percent said they oppose it. The administration can't tell the public to stop grousing. It can, however, try to silence health insurers who have the nerve to say out loud what basic economic theory indicates.

That's exactly what Health and Human Services Secretary Kathleen Sebelius did the other day in a letter to the head of America's Health Insurance Plans, a trade group. She complained that some insurance companies are saying that they have had to raise premiums because of the new law.

Sebelius not only insists this charge is false but warns ominously that "we will not stand idly by as insurers blame their premium hikes and increased profits on the requirement that they provide consumers with basic protections." Apparently, harsh punishment is in store for anyone who refuses to parrot the administration line.

But there is every reason to think this alleged libel is true. The health care law requires health insurers to do all sorts of things, such as eliminate lifetime limits on total costs, include various preventive care with no co-payment, and let unmarried dependent children stay on their parents' policies until the age of 26. Additional requirements will take effect in 2014.
Consumers may benefit from these changes, but they don't come free. If that were the case, insurers would have provided them all along. When the government forces private companies to provide their customers with more and better services, those companies are bound to raise prices to cover the cost.

This is not exactly a surprise to anyone who followed the debate. The Congressional Budget Office said last year it expected premiums per person on nongroup policies to rise as much as 13 percent by 2016.

The administration, however, was loath to admit the obvious. As Cato Institute health analyst Michael Cannon writes, "They claim that the regulations that take place this year will provide valuable benefits. Yet they also claim that those benefits will not have an appreciable effect on health insurance premiums." But both propositions could not be true.

Other factors are obviously at work on premiums, which have been rising for a long time. AHIP notes "soaring prices for medical services" and "the impact of younger and healthier people dropping their insurance during the weak economy" — but it ascribes part of the increases to "additional benefits required under the new law."

Sebelius may be able to suppress such information coming from health insurers. But repealing the law of supply and demand will be harder.

http://www.chicagotribune.com/news/opinion/editorials/ct-edit-obamacare-20100913,0,7734523.story