Cause and Effect

"Obama says insurers will raise premiums 'as long as they can get away with it.' You could say the same about a lot of people, of course. We lawyers have tended to raise our rates as long as we could 'get away with it.' Obama's labor union supporters negotiate to raise their wages 'as long as they can get away with it.' The newspapers that made Obama a national figure raise their advertising rates 'as long as they can get away with it.' Any manufacturer will raise the price of its goods 'as long as they can get away with it.' To do otherwise could expose management to legal liability to shareholders. What stops all of us from raising our prices indefinitely? Why, at some point, can't we 'get away with it?'

"The answer is competition. Any company will--and should--raise the prices of its goods or services until they reach the point where they are constrained by competition. Our government has followed a perverse policy with regard to health care, by limiting the extent to which health insurers can compete against each other and thereby constrain each others' prices. The obvious solution, if we want to rein in health insurance costs, is to 1) broaden competition in the industry to the maximum amount possible, and 2) repeal all mandates that require insurance companies to charge for coverages that many people don't want.

"If the Democrats took those two basic steps, they would significantly reduce the cost of health care. But they wouldn't dream of doing anything so effective to reduce costs, because they want health care costs to remain high. They need high costs to justify government medicine, which means, at its core, a radical restructuring of the relationship between the citizen and the state."