Higher health care premiums could cause Obamacare to death spiral

Posted on January 10, 2013 by Cowboy Byte

This weekend, the New York Times reported on a development that’s completely unsurprising to critics of President Obama’s national health care law: “Health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers.” The Times story heavily suggests that the problem is that Obamacare didn’t give federal regulators enough power to outright reject rate increases deemed too high. But Reason‘s Peter Suderman makes that case that the real culprit could be Obamacare itself — particularly its requirement that all insurance policies pay out at least 80 percent of what it collects in premiums on medical expenses. Known as the “medical loss ratio” (MLR) rule, this requirement creates an incentive for insurers to hike premiums by reducing their profit margins on any given policy.  This Appeared Here…..