Anthem Blue Cross claims that rising medical costs are the culprit, but there’s no way that underlying medical costs are going up at that rate.  California’s individual market must be suffering from adverse selection.

What’s causing it? My speculation is that California’s new regulations on rescission are one cause of the spiral.  I’ve written a long thread on the topic.  Previously, an applicant for individual coverage could lose her policy if she had not told the truth about her health status on her application.  California changed the rules to require the carrier to prove willful misrepresentation by the applicant – even with objective evidence that she had neglected to fully inform the carrier of a condition.  If an applicant “forgets” or doesn’t “understand” what her health condition is, the carrier will not be able to rescind a policy that was written with incomplete information.

I’ve heard from insurance agents that policies with maternity benefits are suffering the biggest increases.  That’s a pretty strong signal of a selection problem.  I wish Anthem Blue Cross would give us the full story.

Larry J. Sabato, a political scientist at the University of Virginia, comments on the movement, and specifically the vote of five Democrats in the Virginia Senate. He reads that as an attempt by the senators to buy political coverage, since “Democrats are somewhere between worried and panicked.”

We should do health care reform. But if what the House and Senate have produced constitutes reform, then reform ought to be dead, and we should start over.

So many of those who oppose consumer-driven health care use the perfect as the enemy of the good. You’re not going to shop for health care if you’re hit by a bus. That’s not the point. The point is you’re served in a health-care system that’s been tightened up, both from a cost and quality point of view, by the fact that some consumers, for many procedures, are shopping around, and not just on price.

For more, follow the links at The Corner.

First, the state is looking to eliminate its Children’s Health Insurance Program — a program funded jointly between federal and state governments. The program is expensive and many studies have shown that much of the money is spent in replacing private coverage with state coverage (25 to 50 percent according to a Government Accountability Office study). Arizona is also looking to end the Arizona Health Care Cost Containment System — Arizona’s version of Medicaid. These significant cuts would remake the state’s social welfare system. The moves would also protect the states from additional costs if current versions of federal reform do move forward.

Fortune 500 execs could stand up for a free market that benefits consumers and shareholders, or hitch their cart to the new Democratic majority. Pfizer’s Mr. Kindler is a case study in the hitch-and-hope mentality—a CEO who became the motivating force behind Big Pharma’s $80 billion “deal” on reform, and industry support of ObamaCare. With that health agenda burning, the choice isn’t looking so grand.

Kindler encouraged the health reform efforts of Washington’s  Democrats, and pushed the industry’s trade group to spend millions of dollars in favor of the plans. In effect, he cut a deal, hoping to secure favorable treatment on importation of drugs and other matters. But the deal may not have any good effects.

“Mr. Kindler and Co. are left with the ashes. Having got this far (with Big Pharma’s help), Democrats are more desperate than ever to pass “something.” It won’t include any upside for drug companies. There is talk instead of “popular” stand-alone legislation, including reimportation, Medicare price controls, and slashing the industry’s 12-year exclusivity on biologics.”

The sad thing about this maneuver is that some of the things Kindler wanted from a deal — that “Congress would “fight against drug reimportation and forgo price controls”–make sense.

Strassel concludes that business leaders should “try standing up for the free markets and limited government that have always been the foundation of U.S. business. It might work out better.”

Health care is a good, but like anything else, if the people who consume it are the same ones who pay for it, consumer and provider discipline will keep costs low. But when the people who consume something are not the ones who pay for it, that discipline disappears.

This is borne out in the comments of one of the authors of a new federal report on spending. Speaking of comparative effectiveness research and investments in information technology, Steve Heffler said, “We do not project that any of those provisions… are going to have a noticeable impact on the rate of growth [of health spending].”

• Allowing inter-state purchase of health insurance
• Catastrophic health insurance for young people
• High-risk pools for uninsured people with pre-existing conditions
• Small business health plans
• Incentives for wellness
• Allowing young adults to stay on their parents’ policies

While not every Republican or Democrat would agree with every item on the list, it is a start for a bipartisan discussion.

And to that list, I would add several others that were in the health policy platforms of both Sens. McCain and Obama during the campaign, including agreement on the importance of:

• Targeted financial help for the uninsured
• Incentives for prevention and early treatment
• Coordination of care and disease management
• Greater use of information technology and electronic medical records
• New approaches to “best practices” in treatment

There are serious differences about how to structure the underlying policy on any of these items and whether more power and control go to government or to doctors and patients. But these lists nonetheless could be a start for a bipartisan conversation.

The article notes that states [having balanced-budget requirements but not a printing press] have had to deal with economic reality: “Before Barack Obama was elected president, much of the focus of a health-care overhaul was at the state level. …. But for now, budget woes are undercutting efforts to add to state-government rolls, and many states are actually cutting health programs.” That should force legislators who want to expand public programs in health to reduce public programs elsewhere. But programs in education, aid to local government, and corporate welfare, have their defenders, too.

With little new money to spend, legislators turn to the next best thing: Forcing other people to spend. So we’ve got laws requiring insurance companies and their customers to pay for treatment for autism, “dependent” children who are 25 years old, and so forth. Legislators are getting some help from one high-profile lobby:

To jump-start some efforts, the American Medical Association plans this spring to roll out a “code of conduct” as a model for its state affiliates to use in pushing for new regulations on health insurers.”We believe there’s going to be a lot of interest in many states,” said the group’s president, James Rohack.

Certainly businesses of all sorts of face regulations. But the amount of regulation, generally, is correlated with the degree to which consumer don’t have other options. The price of hamburgers? Not regulated. The price of electricity, which in most places is available from only one supplier (by law)? Regulated.

The purchase of insurance is highly regulated, more like the electricity model than the hamburger one. For practical purposes, most people have one choice when it comes to insurance. And as with electricity, the lack of choice stems in large part from the law. It’s time to change the law, so that it no longer discriminates against individuals or small groups of people who wish to buy insurance on their own rather than go through an employer or wait for a government program.

The Journal notes that there’s legislation in two states that would give consumers more options, without imposing costs on taxpayers or policy-holders: “In New Hampshire and South Carolina, Republican lawmakers have introduced bills that would allow consumers to buy health plans across state lines.”

“The Illinois Supreme Court struck down the state’s medical malpractice law today, saying it violates separation of powers by allowing lawmakers to interfere with a judge’s ability to reduce verdicts.”

At least, from first blush, the majority exercised some measure of sound judicial reasoning:

Justices Lloyd Karmeier and Rita Garman dissented on certain points of the decision and expressed sympathy to providers of medical care, citing President Obama’s recent address to a joint session of Congress that the justices said “admonished” the nation’s collective failure to enact health care reform.

[snip]

Justices in the majority, however, said their decision was not made with health care reform efforts in Washington in mind, saying the “Obama administration’s health care reform efforts are not the backdrop against which we have decided the constitutionality.”

In other words, decide on the basis of your understanding of the law, not of the headlines.

The new regulations will require that telephone calls be returned within 30 minutes; that health professionals be available 24/7; that appointments with general practitioners take place within ten days, or 15 days for specialists.  

There are standards that a single-payer plan could not hope to achieve.  Indeed, California’s current government-run health plans can’t achieve them.

The new regulations are a result of years of negotiations between HMOs, the government, and self-styled “consumer advocates”, who lobby for laws and regulation friendly to trial lawyers.  Indeed, Anthony Wright, ED of Health Access California, the “statewide health care consumer advocacy coalition” is actually listed on the DMHC’s press release as “sponsor of the original 2002 law.”  (Can you imagine the outrage if Pfizer or Eli Lilly were listed on a government press release as “sponsor” of a law concerning prescription drugs?)  According to Cindy Ehnes, Director of the DMHC, “Californians are literally sick of having to wait weeks to see a doctor.”

Well, I’m sure they are.  But what of the poor Califorians enrolled in Medi-Cal, our Medicaid program? Only 11 percent of cardiologists in Los Angeles accepted Medicaid patients, and the highest accepting specialty was dermatologists: 58 percent.

Lengthy waits for medical services, as doled out by government bureaucrats, are characteristic of so-called “universal” health care.  In my home country of Canada, we don’t measure waiting times in days, but in months – over four months, to be precise, according to The Fraser Institute’s 2009 annual survey of waiting lists for twelve specialties in each of Canada’s ten provinces.

Read more here.