Administration officials have political and financial reasons for wanting to hold down premiums. Big rate increases could undermine public support for the health care law, provide ammunition to Republican critics of the measure and increase costs for some consumers and the federal government.Kevin J. Counihan, the chief executive of the federal insurance marketplace, is urging states to consider a range of factors before making their decisions.“Recent claims data show healthier consumers,” Mr. Counihan said in a letter to state insurance commissioners. The federal tax penalty for going without insurance will increase in 2016, he said, and this “should motivate a new segment of uninsured who may not have a high need for health care to enroll for coverage.”In addition, federal officials said, much of the pent-up demand for health care has been met because consumers who enrolled last year have received treatments they could not obtain when they were uninsured.Federal officials have also told state regulators that medical inflation will be less than what many insurers assumed in calculating their rates for 2016.But Scott Keefer, a vice president of Blue Cross and Blue Shield of Minnesota, which requested rate increases averaging about 50 percent for 2016, said his company had not seen an improvement in the health status of new customers.“Our claims experience has not slowed at all,” Mr. Keefer said. “The trend has gotten a little worse than we expected.”
Instapundit characterizes this as "sticks its fingers in its ears and pretends to hear no evil." But at the core is the delusion that government-run markets are more efficient or rational than ones where consumers are free to choose.