ObamaCare update

Well this Wall Street Journal story is not at all surprising:

Health insurers say they plan to raise premiums for some Americans as a direct result of the health overhaul in coming weeks, complicating Democrats' efforts to trumpet their signature achievement before the midterm elections.

Aetna Inc., some BlueCross BlueShield plans and other smaller carriers have asked for premium increases of between 1% and 9% to pay for extra benefits required under the law, according to filings with state regulators.

These and other insurers say Congress's landmark refashioning of U.S. health coverage, which passed in March after a brutal fight, is causing them to pass on more costs to consumers than Democrats predicted.

...In addition to pledging that the law would restrain increases in Americans' insurance premiums, Democrats front-loaded the legislation with early provisions they hoped would boost public support. Those include letting children stay on their parents' insurance policies until age 26, eliminating co-payments for preventive care and barring insurers from denying policies to children with pre-existing conditions, plus the elimination of the coverage caps.

Weeks before the election, insurance companies began telling state regulators it is those very provisions that are forcing them to increase their rates.

This just in: there is still no such thing as a free lunch. You can't get something for nothing. While not exactly a revelation to most of us, the Obama administration is in apparent shock over this rude encounter with reality. The White House is responding by effectively calling the health insurance companies -- their allies, let us recall, not so long ago -- a bunch of liars:

The White House says insurers are using the law as an excuse to raise rates and predicts that state regulators will block some of the large increases.

"I would have real deep concerns that the kinds of rate increases that you're quoting... are justified," said Nancy-Ann DeParle, the White House's top health official. She said that for insurers, raising rates was "already their modus operandi before the bill" passed. "We believe consumers will see through this," she said.

Previously the administration had calculated that the batch of changes taking effect this fall would raise premiums no more than 1% to 2%, on average.

After Regence [BlueCross BlueShield of Oregon] mailed a letter notifying plan administrators of its intention to raise group insurance rates in Washington state, the White House contacted company officials and accused them of inaccurately justifying the increase.

There are at least two items here deserving of comment. First, why must health insurance companies seek permission from state commissars regulators to raise prices? This is the United States, companies should be able to charge whatever they want, and consumers should be free to take their business elsewhere.

Second, this idea that raising rates was the modus operandi before Obamacare passed is absurd. Are health insurance companies not subject to the laws of supply and demand? Can they simply raise their rates willy-nilly and consumers will pay whatever they ask? If so, why is their collective profitability ranked a pathetic #88 among all industries? This is nonsense on its face.

Fortunately there is one health insurance industry rep to point out the obvious:

"Anytime you add a benefit, there are increased costs," said Karen Ignagni, president of America's Health Insurance Plans, the industry's lobbying group.

They passed the bill, and now we're finding out what's in it.

Update: Related thoughts from Peter Suderman.