Last week, an overwhelming majority of Connecticut legislators passed a bill, SB-11, that would give the executive branch the power to decide whether health plans should be allowed to increase their premiums at rates that keep pace with medical costs. Health plans may be a politically attractive target, but giving politicians the power to approve premiums causes other problems – and doesn’t even hold down rate increases.

Health plans are largely pass-throughs, paying medical claims from providers whose charges have been rocketing skyward.  In California, a recent analysis of daily inpatient charges for hospitals revealed that payments from private health plans increased from $1,954 in 2000 to $5,061 in 2009 – 159 percent – during a time when consumer prices increased by only 25 percent, nationwide.  The charge for a normal (non-Caesarian) childbirth went up from $3,805 to $6,424 – 69 percent.

Read the entire article at Forbes: Apothecary.