Only a completely and utter economic illiterate could possibly believe that the Health Care Bill proposed in the House would result it insurance becoming more affordable.  (Unfortunately, that seems to be an apt description of far too many of our elected officials.) It is full of provisions that will do nothing but increase costs for insurers.

Increasing costs for insurers can do nothing but increase the premiums they charge their policy holders.

Sec. 211 prohibits the exclusion of preexisting conditions, and Sec. 212 is a provision for guaranteed issue of insurance.  That means that insurers must cover any condition you have when thy agree to cover you and they have to cover you if you try to purchase insurance.  This means that people are now going to have an incentive not to carry insurance unless they have a medical condition.  Insuring a larger ration of sick individuals to healthy will greatly increase the cost per policy for insurers, which will in turn greatly increase the premiums people have to pay in order to get coverage.  Which then increases the incentive not to buy insurance unless sick.

These two provisions will create a death spiral for insurance premiums.


SEC. 213. INSURANCE RATING RULES.

(a) In General- The premium rate charged for a qualified health benefits plan that is health insurance coverage may not vary except as follows:

(1) LIMITED AGE VARIATION PERMITTED- By age (within such age categories as the Commissioner shall specify) so long as the ratio of the highest such premium to the lowest such premium does not exceed the ratio of 2 to 1.

(2) BY AREA- By premium rating area (as permitted by State insurance regulators or, in the case of Exchange-participating health benefits plans, as specified by the Commissioner in consultation with such regulators).

(3) BY FAMILY ENROLLMENT- By family enrollment (such as variations within categories and compositions of families) so long as the ratio of the premium for family enrollment (or enrollments) to the premium for individual enrollment is uniform, as specified under State law and consistent with rules of the Commissioner.

By limiting how much insurers can increase premiums based on these conditions, the Government well force insurers to increase premiums across the board.


Sec. 222 sets out the list of what an insurance plan must cover and under what terms it offers coverage in order to be a “Qualified plan”.  Or to put it bluntly, what insurers must cover after 2013 and what the insurer can charge.

Insurers are forced to cover a wide range of options.  The more they are forced to cover, the greater the cost for insuring any individual.  Increased costs means increased premiums.  And you have to remember that insurers are not just concerned with current costs.  They have to be concerned about future costs.

Just because an unmarried individual doesn’t currently need well-baby coverage doesn’t mean they won’t in the future.   And the bill prohibits cost sharing (i.e. co-payments) for that particular type of coverage.  That means the only way to cover the increased cost related to this particular mandate is the imposition of higher premiums.

This section also limits the out-of-pocket costs that the policy holder can incur.  The cost is limited to $5,000 for an individual in 2013.  The limits the ability of the insurance company to limit its costs.  Again, higher costs means higher premiums.