The latest word from inside the Congressional work on the new health care plan is that it will move health insurance companies from under the control of state insurance regulation by imposing federal anti-trust rules on them. At the same time, the bill mandates an increase in what Medicare will pay doctors.

As I have said all along, the Obama health care plan makes a basic mistake. Obama seeks to control, and hopefully reduce, costs for health care by squeezing the health insurance companies, i.e. make the insurers make the providers lower their costs. The Congress now believes removing the anti-trust protection the insurers now receive as state controlled businesses will increase pressure on insurers to force lower prices on providers. I repeat, if you want to lower costs, then work on the providers of the services, i.e. doctors, hospitals, drug makers, and the rest, not the companies that merely pay the bills.

At the same time the Congress wants to pressure insurers to pay less to providers, it sets a mandatory increase in payments for doctors for providing services for those covered by Medicare. Don’t these guys see the contradiction in their actions? On the one hand they legislate measures to lower costs and on the other they raise the costs.

Classic Congressional compromise that promises to make totally inefective legislation.