Their Only Idea
Further proof that the only cost control idea the Obama administration ever had was service cuts and price controls.
Health and Human Services is once again playing freelance actuary, demanding that the health insurers hold down increases in the premiums for their Medicare Advantage plans. As far as the administration is concerned, this is a two-fer. When people have to pay more for their insurance, they tend to ask what the hell good this gargantuan new health care bill is doing--not the question you want them asking as they head to the polls. But in the case of Medicare Advantage, there's another benefit. The health care reform bill mandated a substantial cut in payments to Medicare Advantage providers, which everyone expects will translate into cuts in the extra services that Medicare Advantage plans now provide. If they make those cuts a year early, maybe the administration gets to claim that the cuts don't have anything to do with the new health care bill.
Of course, for the insurers, it's not such a good deal. The administration doesn't seem to have offered any evidence that insurers are overcharging; basically, they're saying that they ought to underprice their product, even if that means losing money. Which is what has happened in Massachusetts, where the state insurance regulator refused substantial rate increases, even though as far as I know they never found an actuary to sign off on their orders. The insurers posted big losses shortly thereafter.
