Government regulation of insurance premiums will make healthcare costs soar
With the recent health bill that's been passed, a number of things have started to come to light. One in particular is fear that the insurance companies will start increasing premiums immediately. In response to this the Senate health committee brought together four experts to present their viewpoints on setting standards, or more importantly, evaluating any type of premium increase. An article appeared in the
New York Times on Wednesday, April 21, dealing with the responses of some of these people who testified. I was particularly interested in comments made by Grace-Marie Turner from the Gaylen Institute. She said that she was highly doubtful that the new health reform package will succeed in lowering insurance costs. Turner said, "Capping premiums without recognizing the forces that are driving up costs would be like tightening the lid on a pressure cooker while the heat is being turned up."
In doing further research on the Galen Institute, I found this video from Ms. Turner; at NCN, we highly support her viewpoint. With all the regulations that will surely be coming about in the near future we believe this will do nothing to control costs. The only way to effectively control costs is on two fronts:
- 1. To have better information in the consumer's hands to help them understand what things truly cost, versus what things are being charged.
- 2. Once a bill comes in for care rendered, that the value of the bill has been benchmarked against other providers in a way that develops a rational, transparent pricing.
At NCN, we've been doing this for the last several years in helping develop a rational payment system. Until we deal on these two fronts, we will continue to have irrational pricing, consumers not engaged in the process and an unrealistic expectation of what healthcare reform will really do. The dirty little secret that we all must come to grips with is this:
- prices will continue to go up, and
- the federal government will continue to put more regulations on the insurance companies to control premiums.
But no one has been addressing the actual excessive charges and cost-shifting that are occurring in today's marketplace. Until we do that, we are destined to have a single-payer system at some point in time.