Greed By Insurance Companies Might Not Be A Justification For National Health Care

See Obama's Misleading Assault on the Insurance Industry: The president knows better than his demagoguery suggests. From the WSJ 3-12-10, p. A19. Exerpts:

"One of the chief complaints about health insurers is that they refuse to provide insurance to everyone at the same price, regardless of an individual's pre-existing medical conditions."

"Yet President Obama himself has acknowledged more than once that insurers don't really have a choice.

In his Feb. 3 town-hall meeting in Nashua, N.H., he said: "You can't [demand] insurance companies . . . take somebody who's sick, who's got a pre-existing condition, if you don't have everybody covered, or at least almost everybody covered. And the reason, if you think about it, is simple. If you had a situation where not everybody was covered but an insurance company had to take you because you were sick, what everybody would do is they'd just wait till they got sick and then they'd go buy insurance. Right? And so the potential would be there to game the system."

"In his Jan. 20 ABC News interview, Mr. Obama noted that if insurance firms accepted all applicants, premiums would skyrocket, an insurance mandate would be necessary, and massive taxpayer subsidies would follow. The president obviously knows it makes no sense to blame insurance companies for paying attention to pre-existing conditions when taking on new customers."

[Obama]"... hammered the insurance industry for making huge profits at the cost of patients' finances and health."

" Fortune 500 data show that of the 43 industries that actually made a profit in 2009, health insurance ranked 35th, with profits of only 2.2% of revenues."

"...premium increases are driven not by profits but by costs..."

"When HHS issued "Insurance Companies Prosper, Families Suffer," its Feb. 18 report on firms that implemented "excessive" premium increases, plenty of nonprofit firms...made the list."

"If health insurance is so lucrative, why aren't giant companies jumping in?"

"MetLife has chosen to invest billions of dollars of free cash not in the health-insurance business but in a risky acquisition of the international life insurance business of beleaguered conglomerate AIG. And what about firms like Microsoft, General Electric, Google and Wal-Mart? They know how to enter new markets and make a profit. Why aren't they selling health plans?"

"Those who know best are persuaded that far from being easy, making money selling health insurance is tough. It is no wonder Warren Buffett told CNBC on March 1 that health insurance is one part of the vast insurance market in which he has avoided investing."

"Mr. Obama's third theme is that health insurance needs more regulation."

"Federal regulation of health insurance premiums makes little sense. Most states already have the power to review and reduce premiums. It hasn't done them much good. Massachusetts, which already has the essence of ObamaCare—no restrictions on pre-existing conditions, an individual mandate, and huge taxpayer subsidies—has the highest premiums in the nation."

"The Bay State has the power to cut premiums, but it hasn't figured out how to do that without cutting health care itself"

"State insurance regulators quickly pointed out that Mr. Obama's proposal for a federal rate authority wouldn't work and would complicate their essential task of making sure that insurance firms have sufficient funds to cover future health care costs."

It was by John Calfee, a resident scholar at the American Enterprise Institute.