The U.S. Supreme Court Vs. Insurance Premiums?

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The Kaiser Family Foundation reported this week that health insurance premiums spiked 9% last year and surpassed $15,000 per year for a family of four. Employees are paying 168% more for their employer-sponsored health insurance than 13 years ago (vs 38% for inflation). Yet another painful reminder of the need to rein in California's unregulated health insurance premiums.  

The stick may have to be a ballot measure. The California legislature has failed for a half-decade to pass simple legislation allowing the insurance commisisoner the right to approve or deny health insurance premium hikes before they take effect — the same power he now has over auto and home insurance. 

Premium hikes seem endless in California and increasingly individuals are picking up the tab where their employers once did.  The elephant in the room is a 2014 deadline for mandatory health insurance to kick in.

How can Californians be asked to purchase health insurance when the government cannot guarantee that it's affordable to buy?

Add this to employees' woes too: Under federal health reform, employers have a financial advantage in paying  a relatively modest penalty and letting their employees buy their policies individually on the state "health insurance exchange" — a one-stop-shopping open market that has no rate regulation either, only negotiating power. 

The Kabuki theater of the absurd surrounding "The Mandate" just got more absurd as President Obama invited the US Supreme Court to weigh in before its session ends in June on the constitutionally of mandatory insurance.  Best case scenario: the mandate is unconstutional, but all other provisions of health reform remain.  Likely scenario: if the court nixes the mandate, it will also take out other important consumer protections of the law. 

The mandate is widely unpopular according to EVERY poll, including ones we conducted prior to Obama taking office.  The public knows it's unfair to force Americans to buy a health insurance policy that costs the average family $15,000 per year.  No amount of obfuscation about generous subsidies, employers picking up the tab, or slight tax penalties for failing to buy can convince Americans it's fair to force them to buy an expensive product from companies they hate.   Being taxed for Medicare is one thing, being forced to buy from Anthem Blue Cross is another.

We know we have a voter revolt in the making in California at the November 2012 ballot box if Americans are ordered to buy insurance from companies whose prices are unregulated. But Obama gave the order and he faces the same voters.

Is the president hoping the Supreme Court will save him from his own law? Is he betting SCOTUS won't strike down the more consumer friendly protections of the law — like the take all comers provision — just before an election, for fear of making Obama the martyr?

The Tea Party and GOP have a powerful election issue in mandatory health insurance as an overstepping of government.  Will the Supreme Court take that away from the Grand Ole parties right before an election?  And stir up Obama's base, which has no hope left other than that Obama will appoint much better Supreme Court justices, by nixing the best parts of health care reform? 

 If the mandate stands, it hurts Obama most. If the consumer protection provisions fall, it hurts the GOP. 

The showdown before June will no doubt defy all our calculations. The line in Vegas now would have to be favoring the Supreme Court to cut back the law, it's just a question of how much.  

The only sure thing is we all will keep paying more and more for our health insurance premiums until Californians vote themselves a rate freeze and premium regulation in November 2012. 


Jamie Court is president of Consumer Watchdog and author of The Progressive's Guide To Raising Hell.

Jamie Court
Jamie Court
Consumer Watchdog's President and Chairman of the Board is an award-winning and nationally recognized consumer advocate. The author of three books, he has led dozens of campaigns to reform insurance companies, financial institutions, energy companies, political accountability and health care companies.

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