FLORIDA RIGHT TO WAIT FOR OBAMACARE KINKS TO BE WORKED OUT
From the Palm Beach Post:
By Senate President Don Gaetz
U.S. Sen. Bill Nelson’s recent comments on the expected rise in health insurance rates captures the core difference between Democrats and the rest of us. An acolyte for his party’s blind faith in government regulation and related fear or ignorance of competitive markets, the senator never acknowledges the complicated reality of Obamacare.
In 2013, the Florida Legislature enacted a two-year suspension of the Office of Insurance Regulation’s (OIR) authority to approve health insurance price increases. This policy decision, supported by Democrats and Republicans, had nothing to do with opposition to Obamacare. The reason for the suspension was the complexity and uncertainty of the new, federally engineered world of health insurance. Quite simply, the mandates inherent in federal health care reform are unprecedented and untested in the insurance marketplace.
Premiums should be low enough to be affordable, but high enough to enable the insurer to pay the claims. Where is that sweet spot when everything has changed due to a sweeping and unprecedented federal law? How do state regulators protect the public from unfair rates when they don’t know who will purchase the plans, or what services they might use?
U.S. House Minority Leader Nancy Pelosi, D-Calif., once once argued that lawmakers had to pass Obamacare before they could understand it. Nelson is now asking the state government to take responsibility for federal price-fixing, in advance of experience, with regulators choosing for you based on guesswork and driven by politics that change deadlines and rework restrictions that impact the health care of millions at a moment’s notice.
When state rate-approval authority is reinstated in 2015, Florida regulators, who by then will have had the opportunity to study the market impact of Obamacare, will have a basis for decision-making.
Nelson also argues that regulation prevents price increases, and he uses a story from Connecticut to support that claim.
His contention is incomplete and inaccurate. A more valid insight is found by comparing Florida and New York.
In Florida, rates are increasing on average — some plans are going up and some plans are going down. Eight companies are increasing rates, but three companies are decreasing rates and three new companies are entering the federal marketplace.
New York, a Democratic state, took Nelson’s advice and regulates health insurance rates for Obamacare-compliant plans. The results: some premiums are rising by as much as 19 percent, some are dropping by as much as 12 percent. Eleven insurers asked for raises and four asked for decreases while one insurer is dropping out.
These results demonstrate a reality that has nothing to do with Republicans or Democrats who support or oppose Obamacare. Rather, these comparisons show us that state regulation will not eliminate rate increases. Some increases will be justified because they are driven by higher health provider costs, higher prescription prices, new taxes and fees, and the fact that Obamacare requires insurers to provide more mandated benefits.
After dedicating so much space to bashing Republicans, Nelson also fails to mention the most important factor in restraining premiums: consumer choice.
I have never been persuaded by the Democratic philosophy that more government is the answer to every problem. Obamacare, with its many mandates for individuals, businesses and insurance companies, is the epitome of this philosophy. Despite this extensive federal intrusion into our health care, we can and should exercise the freedom that remains to select plans from companies that keep costs down or provide the best balance of affordability, coverage and cost-sharing.
In both Florida and New York, consumers’ choices will teach insurance companies more than they can ever learn from government regulators imposing arbitrary limits. I firmly believe that companies will respond to this purchasing power — at least to the extent that federal laws allow.
To read the article view the Palm Beach Post’s website, please use the following link, http://www.palmbeachpost.com/news/news/opinion/commentary-florida-right-to-wait-for-obamacare-kin/ng7WG/
CONTACT: Katie Betta, (850) 487-5229