Civitas Review Online

In an N&O article, Sen. Kay Hagan says, “I think people have to get their heads around this, that we can’t continue where we are right now …We’re in a window of opportunity right now, and it’s time for health care reform in our country.”

Reform – yes.  The type of liberal reform Congress is proposing that will result in a higher deficit, higher taxes, and higher insurance premiums for everyone – NO.

The window of opportunity Sen. Hagan refers to might be quickly shrinking for the Democrats in Washington.  The House bill was passed by an astonishingly slim margin – Democrats loosing 39 votes in the process.  Change is beginning but not in the way Democrats envisioned last November.  Republicans swept the gubernatorial elections in 2 key states NJ, and VA.  And what if the 2010 Congressional election was held today? According to a Gallup poll registered voters prefer Republicans for the House 48% to 44% – a marked shift since the health care debate took center stage earlier this summer.

In North Carolina 53% of voters are opposed to the type of health care reform Congress is currently discussing.

The American public has demonstrated their disapproval – the Senate would do well to listen.

The N&O reports today that the state’s largest insurer Blue Cross and Blue Shield sent out a prepaid mailer asking people to contact Kay Hagan to oppose the government Public Option plan.  The mailer was received shortly after customers were informed their premiums would increase by an average of 11% next year.

The backlash against BCBS has been tremendous.  People are appalled that their money would be spent by the insurance company for its own lobbying efforts as opposed to providing their customers much needed health care.  The result is that customers are using the mailers to inform Kay Hagan they support the Public Option – in a desperate effort to topple the insurance giant.

And yet as experience dictates, all that glitters is not gold…

Don’t be mislead by those regarding this as a textbook battle between evil insurance company and benevolent government.  Rather it is more so the outcome of decades of dealings between the two entities.  Blue Cross and Blue Shield didn’t secure 72.5% of North Carolina’s health insurance market share solely through its own efforts.  They have been top supporters of government mandates and restrictions that have prevented the emergence of any insurance competitors in the state.

So don’t be too certain BCBS won’t have anything to gain by the government’s further involvement in the health insurance market… even via a public option.

Apparently my post from last week on Sen. Kay Hagan complaining about the cost difference of health insurance for men and women sparked the News and Observer to explore the issue in today’s paper.

Unfortunately, the headline writer doesn’t understand economics.  The headline chosen by the N&O reads “NC lets insurers charge women more for coverage.”  Wow, imagine that — government staying out of something and letting the free market set the rates — go figure.  The correct headline should have read “NC lets free market set rates for men, women.”

Instead, it introduces this negative concept that women are for some reason being price gouged by health insurance companies for coverage.

First off, let’s just ask why do we think there is a gender inequity?  Is it because insurance companies have all agreed to price gouge women?  Are they all just run by chauvinist male CEOs who hate women and want them uninsured?  Or is there an actual cost basis for women being charged more?  You know, crazy concepts like they use insurance more often than men and are actually more expensive to cover than a man.  Nah, that can’t be the real reason, that would kill the inflammatory rhetoric like the headline of the N&O.

But let’s explore this concept a little more and think about the ramifications of what would happen if Hagan’s proposal to equalize rates is made law.

Let’s just say for example that a 25 year old man would pay $150/month for his insurance and a 25 yr old woman would pay $250 for hers.  What do you think the insurance companies would do under Hagan’s plan?  Do you think they would cut the price of the woman’s insurance down to $150/month?  No — they would raise the rates on the man’s to $250/month — in essence, charging above market rates for insurance and making it more costly for men to buy insurance.

Or let’s say that rates for both equalized to somewhere around $210/month.  Either way, men would be paying more for their health insurance just because of this mandate.  The cost of a woman’s health insurance would then be partially subsidized by all men — so much for the era of the independent woman.

But what consequence does that have?  Well,  men under 30 (also known as “young indestructibles”) are already the least likely to purchase health insurance.  Artificially inflating their rates under some false idea of “gender equity” will only further push them out of the market — a market that needs these young men in the pool since they rarely use the insurance coverage they have — making it more affordable for insurance companies to offer coverage for older, less healthy individuals.

So with prices higher for young men to buy insurance, less do so, making the pool for insurance smaller, causing all premiums to go up.  In essence, Hagan’s plan will actually end up raising rates for everyone and cause more people to be uninsured.  But again, why let that stop a mythical ideal of “fairness”?

But is this really any surprise?  This is what mandates do — they drive up rates for everyone.  Why should we expect anything different this time?  If anything, I’m starting to believe more and more that there is an organized covert effort to add as many mandates as possible to drive up the costs so high that the system implodes and forces a public option.

Over on the blog of Mark Binker at the Greensboro N&R, he has a clip of Sen. Kay Hagan speaking on the Senate floor decrying the difference in cost of health insurance between men and women.  She tells a story of how a 22 year old female staffer in her office would have to pay 3x as much for her health insurance as a 22 year old man.

Well, duh!  (Sorry, I’m being “snarky” again). Last I checked, men can’t have babies.  And as anyone who has had one recently will know, the cost of having a baby is pretty darn expensive.

Therefore, the cost for insurance companies to cover women is higher than men, thus… a higher policy premium.  Is this really that hard for a US Senator to understand?  And these are the people that are crafting health care reform?

Hagan is trying very hard to make a point, too bad common sense gets in the way of her attempt at some good old fashioned gender-inequity baiting.