His health-care overhaul adrift and increasingly unpopular, President Obama has invited Republicans to a televised summit today to discuss "all the best ideas that are out there." Odds are that Democrats will use the moment to exalt - and berate Republicans for blocking - one of their worst ideas: federal price controls on health insurance.
Both the House and Senate health-care legislation would prohibit insurers from discriminating against people with preexisting medical conditions. Insurers would have to charge everyone in a given age group the same premium - say, $10,000 - whether an enrollee costs $5,000 or $25,000 to insure. That's a price control...
...Price controls will not change the economic reality underlying high insurance premiums - i.e., that some patients file especially expensive claims. They will merely lead people to respond to that reality in even less desirable ways. And they will discourage innovations that actually help sick patients.
Price controls do poll well, though, and in Washington that passes for a good idea. Nevertheless, Summers is right and Obama is wrong: Price controls would heap additional miseries on the sick.(Read the entire piece here.)