Thursday, June 7, 2007

Delaware to Regulate Insurance Prices

"Just like auto insurance"

Categories: Delaware, Insurance Regulation

The Delaware Senate has passed a measure to give the state's insurance department the authority to review rates for health insurance. The state's insurance commissioner applauded the move, saying "We have no ability right now to go in and see if increases are justified." The argument seems to be that individuals and small employers need the power of government to protect them.

How about doing something different, instead? Open up the insurance market to companies from out of state. If officials in Delaware think that customers and employers have too few choices and too little recourse when it comes to health insurance, expanding the roster of insurers offering policies--or to put it more accurately, making it easier for the roster of companies to expand--should be the preferred method.

On the other hand, regulatory oversight of insurance prices serves as a price control, limiting supply. Is decreasing the supply of available health insurance really something that the state should pursue?