Ed Michael Reggie and Claudia Campbell | Why health insurance premiums continue to skyrocket

Ed Michael Reggie and Claudia Campbell, Washington Times:

We shouldn’t be surprised that health insurance premiums continue to rise at record rates — by 15-20 percent for many employers and their employees in 2016 alone. Between private insurance, Medicare and Medicaid, the number of insured Americans has grown dramatically to nearly 90 percent of the population. While more people than ever before are seeking health care services since the passage of Obamacare the supply of physicians, hospitals and outpatient treatment facilities has not kept pace.

It is a fundamental concept of economics that when demand is increased and supply is restricted, prices rise. But for more than 40 years, state and federal governments have used a heavy hand to limit the supply of new doctors and hospitals entering the market, as well as facility expansions and equipment purchases. To make true progress in bringing healthcare costs under control, we must put an end to this fool’s errand of limiting supply in the face of increasing demand. We need price competition.

According to The Physicians Foundation, 81 percent of U.S. physicians describe themselves as overextended or at full capacity. Legislators and policymakers have created a world in which patients must wait an average of nearly three weeks for a doctor’s appointment. As a result, physicians have no incentive to drop their fees and every reason to nudge them higher. The very essence of a free market — in which prices are the product of a negotiation between providers and payers — is illusory.

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