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Life Health > Health Insurance > Health Insurance

Federal chutzpah

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Leo Rosten in “The Joys of Yiddish” defines chutzpah as “ gall, brazen nerve, effrontery, incredible ‘guts,’ presumption plus arrogance such as no other word and no other language can do justice to.” Last Friday’s edition of The Hill contained a small article we will use as an example.

For the last three years, the federal government has systematically vilified the health insurance industry. Adding (literally) insult to injury, they passed a law that allows federal regulators to treat insurance companies as public utilities. Benefits and plan designs are being defined by the Secretary of Health and Human Services and soon these plans will be sold by exchanges — the modern day equivalent of automats.

Perhaps the most damaging blow to the long-term survivability of carriers (especially smaller, regional players) is the imposition of enforceable medical loss ratios. Couple this with myriad initiatives to regulate premium increases, and you have a recipe that inevitably results in industry consolidation.

Against this backdrop, the health subcommittee of the House’s Ways and Means Committee has announced it intends to hold hearings on — let’s not always see the same hands — consolidation in the health care industry. The committee’s announcement focuses on hospitals buying or merging with other hospitals and physician groups as well as large insurance companies purchasing smaller carriers. Who could have foreseen this development? Surely not the same federal government that ignored 78 million baby boomers and their effect on Medicare costs.

Subcommittee chairman Wally Herger (R-Calif.) worries that, although consolidation is sometimes a good thing, leading to improved efficiency and quality, “We must ensure that consolidation is not simply used as a tool to increase revenues by driving up Medicare spending and the cost of private health insurance.”

This is a rather virulent strain of chutzpah, and so I offer a different — and perhaps more on point — definition. Chutzpah of this nature is like a child who murders his parents and then pleads for clemency from the judge because he’s an orphan.

To read more blogs from David Saltzman, click here.

For more on the medical loss ratio, see:

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