Is Health Insurance as Important as Cable TV?

Screw the public option. We don't need it. Let's have good old-fashioned price regulation of health insurance, the way we had for cable tv. To recap, in 1992, Congress overrode President George H.W. Bush's veto and passed the Cable Television Consumer Protection and Competition Act. This law, among other things, regulated the price for basic cable television service. The arguments made in favor of cable regulation apply even more clearly today to health insurance.

The 1992 Cable Act essentially treated cable television service as a utility, something everyone needs, like water or electricity, but which is prohibitively expensive for smaller competitors to produce and distribute. Congress noted that a relatively small group of cable operators controlled the market for cable tv such they were able consistently to raise prices faster than the rate of inflation. According to Sen. Patrick Leahy (D-VT), "Before the 1992 Cable Act was passed, cable rates were rising three times faster than inflation rates. I do not think you can name a consumer in this country who did not feel that he or she was being gouged."
Sound familiar?

Price regulation of health insurance makes even more sense than it did for cable tv. First, cable tv has lots of substitutes. Cable competes with satellite dish tv service, which has been gaining more subscribers than cable for some time, as well as broadcast television, which still gets the most viewers ("So You Think You Can Dance," the Super Bowl, etc.), DVDs (on which one can rent movies, cable and broadcast television programs), the Internet, and other forms of entertainment, such as live sports events.

Second, it's hard to argue that cable tv is more of a necessity than health insurance. The majority of bankruptcies in the U.S. are due to medical bills.

Third, not only does the health insurance industry have no competitors, many health care companies themselves have little or no competition. They have been given an exemption from antitrust laws, and, surprise surprise, have developed into regional monopolies and some statewide monopolies . As a result, it can be no surprise that the price of employer-sponsored health insurance premiums has increased at four times the rate of inflation over the past decade.

So, much more than cable tv, health insurance is a product that (a) nearly everyone needs; (b) has no substitute; (c) is controlled by a small number of companies; and (d) has skyrocketed in price, way beyond the rate of inflation.

Is it time to take away the insurance companies' antitrust exemption and regulate their prices at the federal level? Do you care about your health as much as your cable tv?

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It's a Great Day to Be a Cable Television News Anchor

Geraldo Rivera at Faux Noise: It's all about meeee! I was ready to shave off my mustache if Michael Jackson was convicted of child molestation. Let me tell you about my visits to the Neverland Ranch and the Playboy Mansion.

Larry King at CNN: It's all about meee! Here's a picture of me with Michael Jackson in 1971. Here's a radio interview I did with Michael Jackson in Miami in 1970. Here's me with Barbara Walters in 1957. Here's me with Joey Bishop before electricity was invented.

Keith Olbermann at MSNBC: It's all about meeee! Hear my deep, serious tone of voice as I fill 24 hours regarding the poignancy of Michael Jackson's death. Don't I sound like Edward R. Murrow or some serious journalist?

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Is Gasoline as Important as Cable TV?

In 1992, the U.S. Congress overrode President George H.W. Bush's veto and passed the Cable Television Consumer Protection and Competition Act. This law, among other things, regulated the price for basic cable television service. The arguments made in favor of cable regulation apply even more clearly today to gasoline. So, is it now time to regulate the price of gasoline?

Basically, the 1992 Cable Act treated cable television as a utility, something everyone needs and which is prohibitively expensive for smaller competitors to produce and distribute, like water or electricity. Congress noted that a relatively small group of cable operators controlled the market for cable tv such they were able consistently to raise prices faster than the rate of inflation. According to Sen. Patrick Leahy (D-VT), "Before the 1992 Cable Act was passed, cable rates were rising three times faster than inflation rates. I do not think you can name a consumer in this country who did not feel that he or she was being gouged."

Hmm, sound familiar?

There are two big difference between cable tv and gasoline which makes price regulation even more applicable to gasoline. First, cable tv has lots of substitutes. Even if the market is defined narrowly as multichannel non-broadcast television programming, cable competes with satellite dish tv service, which has been gaining more subscribers than cable for some time. Plus, a more realistic view of the market in which cable competes would include broadcast television, which still gets the most viewers ("American Idol," the Super Bowl, etc.), as well as DVDs (on which one can rent movies, cable and broadcast television programs), and possibly even other forms of entertainment, like live sports events and, hopefully, blog reading on the Internet.

Second, it's not easy to argue that cable tv is a necessity (I can hear "Flavor of Love 3" fans going "what are you talking about?"), and it's even harder to argue that cable tv is more necessary than gasoline.

Gasoline has few or no competitors to power motor vehicles at this point. Hybrid cars still require gasoline. If drivers ditch their cars to take the bus, most buses run on gasoline. Electric commuter trains are not available to many people, especially those who do not live on the coasts or in large cities. Plus, how would you get to the train station? Bicycles? Horses? I don't think so.

So what we have with gasoline is a product that (a) nearly everyone needs; (b) has no current substitute to power motor vehicles; (c) is controlled by a small number of companies; and (d) has skyrocketed in price, way beyond the rate of inflation.

Maybe we should skip the price regulation and regulate gasoline as a drug.

(photo from atomsmasher.org)

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