The following editorial appeared recently in the Chicago Tribune:
In anticipation of the bipartisan health care summit he has called for Thursday, President Barack Obama said last week that he was asking "members of both parties to seek common ground in an effort to solve a problem that's been with us for generations." His goal is to attract enough Republican support to get an overhaul through the Senate. So what is he offering the GOP in his revised health care reform plan, released Monday?
Price controls. Yes, price controls. Faced with critics opposed to a great expansion of federal spending on, and control of, health care and health insurance, Obama decided to demand an even bigger role for Washington. After denouncing WellPoint Inc. for raising premiums on individual policies in California by up to 39 percent, the administration concluded that jawboning was not enough.
Obama wants to create a federal Health Insurance Rate Authority, with the power to block rate increases that it deems excessive.
Well, there was a time when price controls had a certain vogue, even in the Republican Party. That time was 1971, when President Richard Nixon imposed them on the entire economy. It was an economic disaster, generating shortages and failing to prevent high inflation. Ever since then, Republicans have taken a dim view of letting Washington tell private companies what to charge their customers.
That practice would not work any better in health insurance than elsewhere. It would induce companies to cut back on the procedures they cover, cutting costs by reducing services. It would also encourage WellPoint and other insurers to simply get out of the individual policy business entirely, to the benefit of no one. WellPoint says its California subsidiary, Anthem Blue Cross, lost money last year on sales of individual policies in California.
Maybe WellPoint is trying to charge more than a reasonable premium. In that case, the solution is competition, not regulation. Other companies are free to lure WellPoint policyholders with a better deal. Congress could spur the process by letting Californians buy policies from health insurers located elsewhere, giving WellPoint a lot more competition and affording consumers a wider range of suppliers.
If Obama really wanted to get help from the loyal opposition, he could have offered that measure, something they actually want. Or he could have borrowed their ideas on how to curb unwarranted lawsuits and excessive medical malpractice awards. Instead, he offered a blueprint with a 10-year price tag of $950 billion, even bigger than the $871 billion version approved by the Senate (though smaller than the House version).
If there is anything to appeal to Republicans, it's in the realm of pandering to the elderly, not paring back government. Obama wants to close the Medicare prescription plan "doughnut hole" that requires seniors to pay a bigger share of their drug costs after they reach a certain level. But the program is already hugely expensive, and seniors already have generous, guaranteed health insurance. The priority should be on extending coverage to people who don't have it, not enriching the benefits of those who are already well provided for.
Obama wants Republicans to approach the summit in a spirit of compromise. Too bad he's not leading by example.