by Patrick Appel
A reader writes:
The problem with the rule that would have insurers spending 90% of every dollar on medical care, provided it remains in the bill, is that it creates a rather nasty unintended consequence. It gives insurers a reason to actually grow the cost of medical care itself because they need to spend more money to make more money. Private for-profit insurers are corporations and their motivations will always be to maximize profit. The implication of every law has to be seen through that lens. If you require them to spend 90% of their money on patient care, their best means for profit growth is to drive up delivery costs.
Insurers don't have the power to grow the cost of medical care all by themselves. Doctors and hospitals also have They will also make money by growing the number of individuals they cover, which the individual mandate will accomplish.
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