Sunday, February 8, 2009

The Oklahoman tells it like is - for once


I never get excited by the editorials in The Oklahoman - there's always too much for me to disagree with. But damn if this isn't an exception: especially the title and the first two paragraphs.

Too bad the writer doesn't go all the way and point out the fallacy in the altruism that motivates the pushers of insurance mandates for things like autism - but then, that would be going against The Oklahoman's basic position of religious conservatism.

And notice the quote by Representative Mike Brown. People like him are not worried about running off private insurers because they want the government to take over the insurance industry. They want the government to be the insurance company and they want the power that goes with that.
Risk averse: State control affects insurance market
The Oklahoman Editorial
Published: February 8, 2009

Here’s what happens when governments assume too much control of the property and casualty insurance market: Private insurers are driven out, leaving taxpayers as the insurers of last resort.

Here’s what happens when governments assume too much control of the group health insurance market: Premium prices are driven up, leaving some citizens uninsured.

Florida’s largest private insurer, State Farm, is exiting the state. Hit with huge losses after the hurricane season of 2004, State Farm asked for a substantial rate increase. The state said no. State Farm said goodbye.

Other large insurers had already left Florida, unique in the amount of shoreline property being covered and the potential for that high-dollar property to be destroyed by storms.

Oklahoma also has a property and casualty problem because of wind, tornado, fire, ice and hail events. Unlike in Florida, though, Oklahoma hasn’t — yet — assumed too much control of the market.

State Farm said it’s paid out $1.21 in claims for every dollar of premiums collected since 2000. Florida’s largest insurer is now a state-run, nonprofit company created to offer coverage where private insurance wasn’t available. That area just got a lot bigger.

Group health care premiums in Oklahoma would likely get a lot bigger if the state adds an autism treatment mandate. Lawmakers last week rejected the mandate, but the fight isn’t over. Mandate supporter Rep. Mike Brown, D-Tahlequah, taunted opponents by saying, "Who’s running this, the insurance companies or you legislators?"

He should worry instead about running off insurance companies and running up the uninsured numbers.

Update - Feb 10th: Paul Hsieh has posted a comment at the FIRM blog.

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