Health Care Is Expensive, So Stop Raising Health Insurance Rates!

While the cost of health care and the cost of health insurance won't always rise and fall perfectly in tandem, it stands to reason that they wouldn't be entirely unrelated. But Health and Human Services Secretary Kathleen Sebelius is peeved that the premiums on some individual insurance policies are going up in California:

"With so many families already affected by rising costs, I was very disturbed to learn through media accounts that Anthem Blue Cross plans to raise premiums for its California customers by as much as 39%," Sebelius wrote to company President Leslie Margolin.

"These extraordinary increases are up to 15 times faster than inflation and threaten to make healthcare unaffordable for hundreds of thousands of Californians, many of whom are already struggling to make ends meet in a difficult economy."

Sebelius goes on to note that the company is financially stable at the moment. But the underlying logic of her demands is peculiar: Health care costs are going up rapidly—something everyone acknowledges, including Sebelius in the letter—but the people who provide health insurance should continue to behave as if they are staying the same, or perhaps only rising at the rate of inflation?

Sebelius also suggests that the people "deserve to know" if the rate increases will be spent disproportionately on administrative costs. But that level of disclosure—while appropriate for government-supplied health insurance, like Medicare or Medicaid—isn't mandatory for private firms, and shouldn't be. The secretary of health and human services doesn't demand public disclosure measures when the cost of Tylenol goes up. This should be no different. But Sebelius' letter is just as sign of the times on the health care issue, with the boundaries between public and private eroding increasingly rapidly.