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On the Third Hand: Rate reviews

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Hillary Clinton said over the weekend during a Democratic presidential primary debate that she thinks the government doesn’t have “enough oversight over what the insurance companies are charging everybody right now.”

What’s interesting is that she’s saying this as some commercial health insurers seem to be fleeing from the Patient Protection and Affordable Care Act (PPACA) public exchange system, and others seem to be sticking with it mainly out of a sense of civic duty or, possibly, in an effort to hang on to their Medicare and Medicaid contracts.

Of course, some have speculated since PPACA came to life that the main goal of the drafters was to cause a commercial health insurer death spiral that would lead to a single-payer Medicare-for-all system.

Bernie Sanders said during the debate that he thinks shifting to a single-payer system would save the country a great deal of money.

On the one hand, it’s a great big world, and it’s hard to know how well or how poorly a single-payer health insurance system would work for U.S. residents under the age of 65. 

The United States already has what amounts to a universal safety-net program plus a private supplemental products market for the Medicare-age medical, disability and long-term care insurance (LTCI) markets. Some of those markets function better than others, but the existence of the safety-net programs hasn’t, at this point, turned the United States into a Marxist-Leninist dictatorship of the proletariat.

But, on the other hand, Oregon and Vermont seem to be the only states in which regulators made a visible effort to use their PPACA rate review advice authority to push insurers to increase rates to levels that would tend to promote solvency. 

So, regulators seem to have the inclination to give out political candy to the proletariat, but not enough gumption to make coverage holders eat their solvency sustaining broccoli.

Congress, meanwhile, seems to lack any ability to make the country as a whole eat our solvency broccoli for Medicaid and Medicare programs, including what might be viewed as our single-payer safety-net programs.

On the third hand, if we let the government run the commercial health insurance industry off the tracks and replace it with a single-payer health care system, maybe that will eventually be great for some players in the commercial insurance industry.

Once the government runs the single-payer health care system into the ground, after about three years, then maybe Warren Buffett, or his successor, can acquire it from Congress, turn it around and get some nice commercial profits out of it. Maybe the owners of the “Newly Privatized Universal Health Care System Inc.” will even endow a few chairs at economics departments, to fund research into the drugs and counseling techniques that might be used to encourage government officials to stand up for eating broccoli, and not just to spend their days tossing out candy.