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Insurance As Public Utility? No, It?s Worse

We?ve all seen many observations that Obamacare turns insurance companies into heavily regulated public utilities. Back in December, for example, Richard Epstein wrote in the Wall Street Journal that the Senate bill?s treatment of insurance companies ?turned the Reid bill into ?an essentially governmental program.? In other words,? Epstein continued, ?the targeted health insurers would become de facto public utilities....?

This new government control, however, will not result in lower premiums. Quite the contrary. As Karl Rove observed in the WSJ this morning,

changes in insurance regulations in 2011 and two new mandates in 2014 that force everyone to buy insurance and require everyone to be charged a similar price regardless of age or health will cause insurance premiums to rise more than they would have otherwise.

It now seems to me, however, that regarding Obamed insurance companies as regulated public utilities misses the mark in one important respect. At least public utilities charge for use. For example, Dominion Electric installs a meter to measure my usage of electricity and charges me based on that use. My neighbors who use more will be charged more; those who use less will be charged less.

But thanks to the brilliance of Obama and his lemming-like Democrats, if Rove is right everyone will be charged the same insurance premium no matter how much insurance they use.

Full post as published by Discriminations on March 25, 2010 (boomark / email).