Three Pennsylvania state senators raise a most germane point in an open letter to Pennsylvania health insurers after state Insurance Commissioner Teresa Miller did what most of us would consider to be a very suspect thing.
But whether the point is directed at the right party, however, remains an open question.
In many cases last month, the commissioner approved rate increases that were higher than the already large increases requested by companies offering policies under ObamaCare, formally known as the Affordable Care Act (but hardly “affordable.”) Turning insurance into an entitlement has destroyed the concept of the “risk pool” — what insurance is — and sent insurers reeling.
The Oct. 28 letter was signed by Senate President Pro Tempore Joe Scarnati, Majority Leader Jake Corman and Don White, chairman of the Banking and Insurance Committee. Here’s the crux of their complaint:
“Consumers should be charged for insurance based on actuarial soundness, not political timing. We want to know why you would have requested less than you need — and we want to know why you would now charge more than you need.”
The senators are asking the insurance carriers to “charge no more than you requested.”
That’s all well and good but probably will go nowhere. After all, if the government gives such a heavily regulated industry — thinking people would say commandeered — such as insurance the imprimatur to charge a premium above the asking price, do you really think it will charge less? The real issue here is why this agency acted as it did.
Pennsylvania’s insurance overlords legally can approve of rates higher than requested. But what would it supposedly know that insurers did not? It claims the higher-than-requested rates were adopted to prevent insurers from abandoning the market. But that’s a decision best left to insurers and the marketplace, is it not?
Or was this the case: Was a deal cut to take the direct heat off insurers? If so, what’s the deal?
Scarnati, Corman and White say the “hard-working families of this commonwealth should not be taken advantage of by what is a back-door tax increase that reeks of politics, not sound insurance regulation and consumer protection.”
No, they should not. But neither should they abide politicians who allow Miller & Co. to skate.
Pennsylvania was one of at least eight states that approved rates higher than requested. One rationale, in general, and as reported by USA Today, is that regulators have a responsibility “to keep insurance companies solvent so they can continue to give people insurance.”
Since when? Again, that should be a market decision made by private insurance companies, not the government.. This government intervention only perverts the market. (Just look at ObamaCare.) Who knows what better option(s) would have emerged had “The State” not intervened in such a way.
Bottom line: Good public policy rests on transparency, not to mention a fealty to free markets, not those the government constantly attempts to command and always — always — screws up.
Nowhere is the misunderstanding of fundamental economics more pronounced than in a Nov. 1 letter to the editor of the Pittsburgh Post-Gazette from Braddock Mayor John Fetterman.
He laments that the current minimum wage of $7.25 an hour “just isn’t enough to stay above water.” Fetterman wants a $15 hourly wage floor. And he cites the experience of person who “just landed at a company that takes care of its employees and pays them a decent wage.”
“What would it do if decent, living-wage jobs like the ones at Costco were the norm, not the exception in the service sector?,” the mayor asks.
Simply put, Mr. Mayor, there would be fewer jobs and more unemployment among lesser-skilled workers. Raising the cost of labor by market-perverting fiat, not based on skillset or productivity, results in less work, less opportunity and more poverty. Period.
Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
