Sebelius doubles down

Health and Human Services Secretary Kathleen Sebelius recently attracted attention for all the wrong reasons when she wrote a threatening letter to the CEO of America’s Health Insurance Plans, a trade association, castigating health insurance companies for telling consumers that ObamaCare measures are at least partially responsible for higher premiums.

"There will be zero tolerance for this type of misinformation and unjustified rate increases," she said. 
"We will not stand idly by as insurers blame their premium hikes . . . on the requirement that they provide consumers with basic protections."

She alluded to punitive measures for those who fail to comply, adding that "We will also keep track of insurers with a record of unjustified rate increases: those plans may be excluded from health insurance Exchanges in 2014."

Sebelius has subsequently penned a missive that appears in today's Wall Street Journal, which I read with some interest, wondering whether she would attempt to walk back her previous rhetoric. In fact she has done no such thing, effectively doubling down on her stance:

In the last two weeks, my department has been accused of "thuggery" (this editorial page) and "Soviet tyranny" (Newt Gingrich). What prompted these accusations? The fact that we told health-insurance companies that, as required by law, we will review large premium increases and identify those that are unreasonable.

There's a long history of special interests using similar attacks to oppose change. In the mid-1960s, for example, some claimed Medicare would put our country on the path to socialism.

Why she points to the obvious prescience of those Medicare critics in the wake of expanded government socialization of health care (prescription drug benefit, Obamacare), one can only speculate.

Beyond confirming her as a bureaucrat of the petty tyrant mold, the letter also reveals her to have little understanding of basic economics. Suffice to say, arrogance combined with ignorance is never a pretty picture:

But what is really objectionable about these comments is not who they're attacking, but what they're defending. These critics seem to believe that any oversight of the insurance industry is too much, and that consumers would be better off in a system where they have few rights or protections.

Over the past decade, Americans have seen what happens when insurance companies have free rein. The cost of health insurance has more than doubled, while millions of hard-working Americans lost their coverage or drained their savings to keep up with premiums. Employers—big and small—have struggled mightily to absorb these cost increases and have been losing the fight.

As insurance commissioner and governor of Kansas, I saw firsthand how these rate hikes burdened people. I spoke with families who watched their insurance go up 20%, 30%, even 40% a year without explanation. I met with small business owners who had stopped offering health insurance to their employees because they couldn't afford the annual double-digit premium increases.

Under the narrative that Sebelius -- and presumably the broader Obama administration -- is working under, premium increases are simply a product of corporate greed. Such companies desire more money, and thus increase their prices. It's a wonder, however, why if this is so that other industries haven't followed suit. Does the price of electronics fall year after year because the companies that produce such products are altruistic, run by kind-hearted CEOs? (Of course, the same people who criticize health insurers for raising premiums are usually the same people who take aim at Wal-Mart for their efforts to reduce prices) The logic employed by the country's most powerful health care bureaucrat is really child-like in its simplicity.

Never for a moment in the entire column does Sebelius entertain the notion that perhaps the reason for the increased premiums is because the cost of the health care that insurers pay for has also risen. Never once does she acknowledge that the profits of the health insurance industry are utterly unremarkable. Indeed, she instead serves to propagate the image of health insurers as corporate fat-cats, accusing the health insurance industry of making "large profits from the status quo."

We are faced with one of two possibilities: Sebelius is perfectly aware of the health care economics at work but has instead simply decided to demagogue the issue for political gain, or she has no idea what she is talking about. Neither is reassuring.

Update: The WSJ editorial board labels Sebelius the Department of Misinformation.