How this insane element of his health care proposal will create havoc in medical care.

One helpful resource is an article from 2008 by Art Carden, an assistant professor of economics at Rhodes College in Memphis, TN.

1) Price controls create shortages – they eliminate the market’s way of telling people to conserve scarce resources. If the government artificially creates an upper limit on what health insurers can charge for premiums, there will be a shortage of health insurance provided by that company.

2) This will drive private insurers out of business under the auspices of “protecting” health care consumers. This will make private insurance less available for consumers, creating even more uninsured citizens (the horror!). The comical premise is that statists like Obama assume that the profit-seeking insurer will always be there, diligently providing a product that consumers can take advantage of.

Some astute pundits have warned that Obama and his ilk are not so naive – they realize exactly what the consequences will be and look forward to the failure of private insurance so that a single-payer system can be formally introduced to “rescue” the poor victimized American citizenry.

It takes about three seconds to understand that price controls restrict entry into markets that are otherwise untouchable. For instance, if a high-risk group of patients (chronic diabetics or people with congestive heart failure) want insurance, they will soon find no insurer willing to cover them because the price ceiling prevents the company from making a profit. Chronic health conditions cost insurers lots of money, and therefore coverage of patients with those conditions requires a larger expenditure (covered by higher premiums).

So a patient with a chronic condition will either 1) go untreated, 2) treat themselves using the black or gray market, or 3) receive “emergency” care at the local ER and further overload and cripple an already bloated system. All because a group of politicians wanted to appear like they were “fighting against the evil insurance company” and battling the Hydra of “unreasonable” increases in premiums!

Emotions run high when a loved one’s health is at stake. I’m told that there were more than a few arguments and “disagreements” among citizens in lines at gas pumps during the wage and price controls in the 1970s. Just imagine what will happen when that scarce resource made more scarce by price controls is health care itself!

Here’s another post from a George Mason University economist:

What cool adventures await us if Mr. Obama succeeds in giving Uncle Sam power to control insurance rates?  Reduced coverage?  Hidden fees aimed at skirting government regulations?  Surly service?  More trouble and delays collecting on our policies?