More on Health Insurance Pricing

One more point about that Oxford/United Health Care rate increase I posted about earlier. What it is, actually, is an application to the New York State Insurance Department for an increase. This is a great example of how government price controls don't always actually work well to moderate prices. Because the insurance department exists in part to moderate price increases for consumers, the insurance companies are tempted to go in, as a bargaining technique, with a big proposed rate increase, which they anticipate will then get knocked down by the regulators and politicians, who can then claim credit for "standing up" for the consumer. The regulators and consumers might claim that without their intervention, the insurer would raise rates by the asked-for-20% rather than by the eventually-approved 10%. That's possible. But it's also possible that if the insurance company hadn't been forced to go through the whole charade, the company might just have raised the rate 10% in the first place.