The President’s Health Proposal: Bringing Back Price Controls

Kathryn Nix / February 25, 2010

In preparation for the Health Care Summit, President Obama unveiled his first official health care proposal. It is intended to reconcile the differences between the  highly unpopular House and Senate bills. Curiously, President Obama’s latest iteration of the liberal health policy agenda includes more federal power: the power to control “private” health plan premiums.

Price Controls. According to the President’s proposal, a new “Health Insurance Rate Authority” would oversee rate review for private insurers, so that “if a rate increase is unreasonable and unjustified, health insurers must lower premiums, provide rebates, or take other actions to make premiums affordable.”  On the face of it, this means price controls on health insurance.

The President knows the unhappy history of price controls, and the genuine misery- shortages, mainly- that such a policy guarantees. Think of the  long, hot gasoline lines of the 1970s, courtesy of the Carter Administration. (more…)