Monday, September 13, 2010

Thuggery in Obama's government

Michael Barone is exactly right in how he characterizes Kathleen Sebelius's threat to insurance companies.
Or as Ignagni [president of America's Health Insurance Plans -- the chief lobbyist for private health insurance companies], the recipient of the letter, says, "It's a basic law of economics that additional benefits incur additional costs."

But Sebelius has "zero tolerance" for that kind of thing. She promises to issue regulations to require "state or federal review of all potentially unreasonable rate increases" (which would presumably mean all rate increases).

And there's a threat. "We will also keep track of insurers with a record of unjustified rate increases: those plans may be excluded from health insurance Exchanges in 2014."

That's a significant date, the first year in which state insurance exchanges are slated to get a monopoly on the issuance of individual health insurance policies. Sebelius is threatening to put health insurers out of business in a substantial portion of the market if they state that Obamacare is boosting their costs.

"Congress shall make no law," reads the First Amendment, "abridging the freedom of speech, or of the press."

Sebelius' approach is different: "zero tolerance" for dissent.

The threat to use government regulation to destroy or harm someone's business because they disagree with government officials is thuggery. Like the Obama administration's transfer of money from Chrysler bondholders to its political allies in the United Auto Workers, it is a form of gangster government.
The WSJ also calls this thuggery.
The Administration estimates that these regulations should increase all premiums by 1% to 2% on average. Even if that turns out to be right—on average—that isn't what insurers are finding in practice in the local, price-sensitive individual and small business insurance markets, where coverage is typically less comprehensive to hold down costs. For some current policies in some states, the one-year increase jumps as much as 9%.

ObamaCare gives Ms. Sebelius's regulators the power to define "unreasonable" premium hikes, which will mean whatever they decide it will mean later this fall. She promised to keep a list of insurers "with a record of unjustified rate increases" and then to bar them from ObamaCare's subsidized "exchanges" when they come on line in 2014. In other words, insurers must accept price controls now or face the retribution of a de facto ban on selling their products to consumers four years from now.

This is nasty stuff and an obvious attempt to shift political blame for rising insurance costs before the election. It's also an early sign of life under ObamaCare, when all health-care decisions are political and the bureaucrats decide who can charge how much for a service or product.
Obama's hometown paper, the Chicago Tribune, tries to explain the basic fact to its readers that, when you require insurance companies to do more, it will cost more.
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.
Never mind - we're talking Obamanomics here, not reality. They make their own rules and then use the power of the government to try to force critics to keep quiet.

If this gang remains in office, they will continue with this sort of "gangster government" where only those companies that play nice with them and refrain from criticizing ObamaCare get to participate in the federally-sponsored state exchanges. If the critics go out of business, well, that's what they deserve for failing to endorse the Obama line regardless of what is happening in the real world.

They won't stop there. Christiane Amanpour brought up another way where government thuggery can come into play. She asked this question yesterday on ABC's This Week roundtable.
CHRISTIANE AMANPOUR, HOST: Somebody I was talking to over the, during the week, people in business and venture capital who were saying, "Why doesn't the government do more to force banks to lend, to do more to make it easier for people to actually go out there and show some kind of consumer activity?"
Yes, that is just what this economy needs - the government forcing banks to loan money. Isn't that what got us into the problems we're having now - when the federal government forced banks to loan money for mortgages that people shouldn't have been receiving because they weren't qualified by any reasonable standard to pay back those loans? How soon before Amanpour's anonymous "somebody" will become a Democratic initiative to repeat the mistakes of the past? Liberals can't even imagine that perhaps people aren't borrowing the amount of money that Amanpour would consider adequate is because people are afraid of going into debt to expand or start a business because they don't have confidence in today's business climate. George Will tried to explain this.
GEORGE WILL: Well maybe if the government did less, period, people would be more inclined to lend money. The banks aren't hoarding the money because they are in a pout. They're not hoarding the money because they're mad at somebody. They're hoarding money because they can't find lenders who think they can borrow it and make money.
Forget it, George, they'll never understand how economics works. Their only answer is to use the federal government's power to force private entities to do what liberals think is the correct thing and go hang whether there is any economic rationality behind their wishes.