Here's an excerpt from "New York Offers Costly Lessons on Insurance":
New York's insurance system has been a working laboratory for the core provision of the new federal health care law -- insurance even for those who are already sick and facing huge medical bills -- and an expensive lesson in unplanned consequences. Premiums for individual and small group policies have risen so high that state officials and patients' advocates say that New York's extensive insurance safety net for people like Ms. Welles is falling apart.The spiral of controls causing problems leading to calls for more controls is clear:
In 1993, motivated by stories of suffering AIDS patients, the state became one of the first to require insurers to extend individual or small group coverage to anyone with pre-existing illnesses.ObamaCare seeks to avoid this problem by the individual mandate, requiring people to purchase insurance (as in Massachusetts). The result:
New York also became one of the few states that require insurers within each region of the state to charge the same rates for the same benefits, regardless of whether people are old or young, male or female, smokers or nonsmokers, high risk or low risk.
Healthy people, in effect, began to subsidize people who needed more health care. The healthier customers soon discovered that the high premiums were not worth it and dropped out of the plans.
But analysts say that provision could prove meaningless if the government does not vigorously enforce the penalties, as insurance companies fear, or if too many people decide it is cheaper to pay the penalty and opt out.Unfortunately, the insurance industry lobby has argued for stricter penalites rather than free market reforms -- i.e., further infringements on individual freedoms. Unless they take a principled stand for freedom, they'll just be aiding in their own eventual destruction through this increasing spiral of regulations -- and taking the rest of us down with them.