US President Barack Obama has unveiled new plans to advance legislation to overhaul the US healthcare system.
One of the key proposals gives the US government new power to block health insurers from imposing excessive premium increases.
Mr Obama has made healthcare reform a centrepiece of his presidency, but has so far failed to get a new law passed.
There's three key features to his proposal. First, almost everyone will be required to have health insurance. Second, there will be very tough restrictions against health insurance companies as far as who they can and can't cover. Third, the Feds can dictate how much a health insurance company can raise rates.
The president still doesn't seem to get it. Think of this as a balloon. If you squeeze one part, another part will balloon. So, if you force insurance companies to cover everyone, they will charge higher rates. If you force them to cover everyone and you don't allow them to charge higher rates, the insurance companies will squeeze from somewhere else.
The insurance companies will simply cover less. They will also reimburse less to doctors. Milton Friedman once said, "there's no such thing as a free lunch". The president is approaching it as though there is. He seems to think that he can force the insurance companys' hands with no consequences. That won't happen. The more he squeezes in some places, the more the insurance companies will squeeze out of other places. This plan is pure fantasy.