Health Insurance Premiums to Skyrocket: What Next, America?

The words Health Insurance Policy surrounded by multiple 100-dollar bills

Health insurance prices may jump dramatically next year as some insurers are requesting double-digit rate increases.

State governments are likely to grant increases that are less than requested, but those who pay for their own insurance out of pocket should still expect a big bite – especially those with the most popular “silver” plans, CNBC reports.

Average plans in major cities could rise as much as 12 percent, according to an analysis by HealthPocket, a website that compares health plans.

Those silver plans could rise by as much as 14 percent, according to HealthPocket. [All this reported and referenced at today’s]

It makes sense that health insurance costs will increase as the “Obamacare” law takes effect. Whenever government takes steps to restrain or restrict supply, relative to demand, it’s inevitable that prices will go up.

Obamacare restrains and restricts the ability of insurance companies to offer a wide variety of health care plans; and it also restrains and restricts the ability of private individuals to purchase medical care or insurance on an open, free market.

Particularly since the formation of Medicare, this has been a growing problem in medical care. Nobody blamed it on the government. Instead, most people blamed it on the “free market.” They bought the idea that if we didn’t have a free market, then all would be solved. But we didn’t have a free market, not even close to one, after Medicare came along. Most health care services are (logically) utilized by the elderly. Once Medicare became the dominant form of health care payment, and Medicare rules along with it, America was already at least halfway socialized, in terms of medicine.

Enter Obamacare. Obamacare said, “We’re going to control the market completely now. Private consumers and business owners cannot be trusted.”

And this is what you get:

Kev Coleman, head of research and data at HealthPocket, said 2016 will be the first year people are seeing true Affordable Care Act rates since the first two years were artificially low.

There was little data for 2015’s proposed prices, CNBC wrote, because the prices had to be submitted shortly after people had enrolled in 2014. And a 25 percent increase in insurers in the Obamacare market in 2015 helped cut prices.

No such increase of competition is expected in 2016.

That’s the key. Government programs cannot create economic value. They can restrain, inhibit or attempt to redistribute it. But they can’t start up and run insurance companies — nor develop new, innovative ideas that a marketplace for medicine, where doctors and patients are allowed to freely communicate, might develop.

We talk about the value of free trade, between countries. Why don’t we respect freedom of trade in medicine, with doctors and patients deciding how to contract, finance and self-regulate one of the most important and individualized areas of human life, i.e. health care?

Government interrupts, aborts or prevents free trade in health care. Americans would never stand for this level of control over other areas of life which are just as personal.

While certain government actions or subsidies benefit some people, at least in the short run, those same policies unjustly and uneconomically harm others. While some people are entitled to Medicaid and health insurance subsidies, others who are not eligible (by some largely unworkable and confusing government formula) will be the ones footing the bill for these rising health insurance premiums.

It will be interesting to see where the debate about health care goes, post-Obamacare. Obamacare is the law of the land, and it will not likely go away (although the Supreme Court may ultimately undercut it.)

When health insurance premiums skyrocket, some (who opposed Obamacare in the first place) will blame Obamacare. Others will be defensive and say Obamacare is not the problem. What is the problem, then? The free market? Like I said, we didn’t really have a free market in medicine and health insurance before Obamacare. We certainly do not have a free market now.

So when things do not get better (they’re not), and actually get worse (the numbers are telling us they will), what will the next course of action be? More government? Communistic or outright fascist control over medicine, 100 percent by government bureaucrats and politically motivated, elected officials? Or the opposite direction totally: liberalization, legalization, and a total opening up of a free marketplace for doctors and patients, including the legal right to opt out of government programs, if one chooses; and the ultimate phase out of those programs, including even Medicare, which will surely go bankrupt anyway?

It’s one way or the other. That’s just a fact, and there’s no getting around that fact. If you’re on the side of total or mostly government control, then the onus lies with you to defend the state of medical care in the post-Obamacare realm. Because that’s what we now have.

Sometimes, when government messes up the marketplace in a certain field, steps are taken to deregulate the industry. This happened in the late 1970s and early 1980s with airlines. Ever since, airline rates have been more of a marketplace than they previously were. Things got largely better. More people flew than ever before, thanks to the innovation and competition deregulation enabled.

If the same is to happen in health care, Americans will have to face some uncomfortable and inconvenient facts. If they want to continue having the government programs of Medicare and Medicaid, they have to accept that the government will regulate and monitor these programs, since government is paying for them (mostly with debt, as we go into the future). If they want a truly free market — with the rationality and consumer control that accompanies a free market — then they will have to let go of the idea that health care is a right to be guaranteed for them, at least past a certain age.

In a free marketplace, there are no guarantees. But there are things most of us take for granted, and that we cannot live without: innovation, increases in supply (thanks to the profit motive) that tend to lower prices over time; and the mutual respect that develops between providers of a product or service (doctors) and the people who willingly pay the provider directly for it (patients.)

Advocates of gigantic government programs for health care claim to be the humane and compassionate ones. But their gradual takeover of medicine, culminating in Obamacare, is what led to the breakdown in the doctor-patient relationship, by making an impersonal and coercive third party (mostly government) the entity setting the terms and conditions of the relationship. Let’s be real. Your doctor doesn’t really work for you, particularly if you’re paying him or her with Medicare; your doctor works for the federal government, who pays all or most of the bills.

Most Americans want medical care to look like a marketplace. But they’re seeking to achieve that via government coercion, subsidies and monopolization. You can’t have both.

Entitlements and freedom don’t mix. They’re two completely different things. Americans have been exposed to the wealth, comfort and always improving state of affairs that economic freedom and free markets always bring. Unless they’re first generation immigrants fleeing Communist or socialist countries, they have not been exposed to the despair, stagnation and lack of choice inherent to socialism.

But that’s precisely what we’re getting, and can expect to see more of, in medicine — post-Obamacare.




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