Thursday, October 08, 2009

The old joke was a conservative was a liberal who had just gotten mugged. The new version may soon be a conservative is a liberal who finds out that liberal health care reform makes insurance more, rather than less, expensive...

Today's poster child is Wendy Button, a liberal speechwriter for the likes of John Edwards, Clinton and Obama, who moves to Massachusetts only to find herself priced out of the health insurance market.

Of course, any conservative could have told her this was going to happen. Forcing insurance companies to eliminate coverage caps and issue insurance to those with pre-existing conditions has to result in higher premiums.

It's simple math and basic business. The premiums an insurance provider charges is based on the sum of (1) the dollars paid in benefits, (2) its administrative costs, and (3) whatever profit margin it feels it can support. Increasing the amount of benefits paid out without lowering either the administrative costs or the profit margin means the insurance companies will look to increase the amount of premiums their customers are charged. In other words, those customers without pre-exisiting conditions or bumping up against the coverage caps will be charged more in order to provide coverage to those with pre-existing conditions and running up charges in excess of the coverage caps. In even fewer words, the healthy will have to pay more to cover the not-so-healthy.

But while Ms. Button does realize liberal reform ain't all it is cracked up to be, she unfortunately doesn't quite get the full picture.

For example, she laments not being able to buy insurance from a DC-based carrier or health exchange. But the only reason these other options are less expensive is that they're not required (at least not yet) to provide the same level of coverage as are Massachusetts based carriers. Force them to provide the same level of coverage and they'll likely charge premiums that are just as high.

The simple fact is that it is impossible to provide health insurance coverage to the sick who don't now have it for the same price as everybody else without increasing the cost of coverage for everybody else... and no amount of liberal maneuvering can change that fact.