Libertarian law professor Richard Epstein's weekly column says ObamaCare is a kind of rent control for health care:
This same flawed reasoning led to disaster in real estate markets, where rent controls caused a reduction in the quality of housing and a reluctance of firms to remain in the field. Similar results are already happening with respect to health care under Obamacare. Its "medical loss ratio" (MLR) imposes a maximum amount of revenues that can be spent by insurers on "administrative" cost—a term of art that has yet to be fully defined.
The consequences of this one regulatory initiative have not been trivial. Many extant insurance plans, especially those targeted to low-income workers with high turnover rates, have applied for and received administrative waivers from the MLR requirements because their actual costs are far higher than the allowable MLR.
On this issue, the Department of Health and Human Services really had no choice, because the alternative would have been the wholesale withdrawal of insurance coverage to a vulnerable portion of the market given that the so-called insurance exchanges are not yet up and running. We are not talking about a small breakdown in the system: Over 3,000 employers have received waivers to keep their plans in operation for over 3 million workers.
