I’ve been reluctant to weigh in on the Obamacare debate for a variety of reasons. For one thing, healthcare as a topic is dull and complex; almost entirely outside what I find interesting and important. My interests in the sciences do not generally include biology, and I am much more interested in geopolitics, as opposed to domestic political issues.
For another, it seemed too far into the realm of the hypothetical to weigh in on a debate in which the substance, that is, the proposed legislation, was in a constant state of flux. Those in favor of the bill(s) argued for the merits of provisions that ultimately might or might not have been included in the final version, and the same may have been said of the arguments of those in opposition. Now that the bill has been finalized, passed, and signed into law, the uncertainties have been largely resolved, and it is at least possible to discuss the concrete reality of what has been done. The pig is out of the poke for all to behold.
My research has been repeatedly confounded between the legalese text of the law – which is virtually incomprehensible to a layman such as myself – and the partisan bogosity salesmanship of the Left (and, to some degree, the angry obfuscations of the Right). The Left has a point when they mock the Right for complaining that legislators haven’t read a bill before they voted to pass it. Just pick any spot, try to make heads or tails of it, and you’ll concede the point. What the Right means to say, and should say, is that the legislators don’t know what’s in the bill before they vote for it, and that’s a valid criticism. Complex legislation needs to be fixed and unchanging for a period of time to allow for it to be subjected to public scrutiny. For this reason candidate Obama made a promise to allow five days of sunlight on a bill before he would sign it into law (and we now know he lied about that – no two ways about it, Liberals: he lied like a rug and you were the rubes who believed him).
On the snake-oil salesmanship side, I found claptrap like this [PDF] on the Senate website under “Quality, Affordable Health Care for All Americans”
“Provides Americans with better coverage and the information they need to make informed decisions about their health insurance.”
“Provides better chronic care, with doctors collaborating to provide patient-centered care for the 80 percent of older Americans who have at least one chronic medical condition like high blood pressure or diabetes.”
Bereft of specifics these cheerleading summaries have no value.
On the other hand, we have spin from the right, such as the catchy “death panels” term from Sarah Palin. The actual criticism she was making was in reference to the state-mandated consultations with elderly patients about their “end-of-life” options in a bill that was intended to cut medical costs. She connected the dots and came up with a hangman, which made for some pretty weak tea (and those were some mangled metaphors, but let’s not dwell on that).
Other pundits of the Right have pointed out that, inasmuch as the examples we’ve seen of government health care in such places as Canada and the United Kingdom do indeed ration their care, and/or put their patients on waiting lists for diagnosis and treatment that can last months, even years, we should expect the same from a single-payer system. That’s true enough, but absent the ability to buy health care insurance independently, as much as you can afford, rationing is another term for limited coverage. Limited policies don’t cover everything, which is what makes them more affordable – nothing new here.
At any rate, the best summary I’ve found to-date is here.
It is therefore with varying degrees of certainty that I can share my thoughts and opinions. While that would usually preclude my sharing them publicly, this is different because, as VPOTUS Joe Biden so eloquently put it, “This is a big f’ing deal.” (Stay classy, Joe.) Without further preamble, here are some of my thoughts on what was proposed during the past year.
The “pre-existing condition” requirement bars insurance companies from “discriminating” on the basis of pre-existing or current health status. Insurance companies are not “discriminating” when they decline to foot the bill for people who walk in the door and declare, “I have cancer – fix it!” Nothing has so clearly illustrated the abject foolish ignorance of Liberals in this debate than their insistence that the free-market insurance industry cover pre-existing medical conditions without exception, and at rates comparable to those given the healthy. In my readings of the national discussion on the left and right I have been left slack-jawed in amazement at the Left.
This is not terribly complicated. The insurance industry business model is predicated on risk-pooling. Your rate is determined by your risk of disease or injury. Insurance companies use actuarial tables (i.e., historical data from their past experience) and disclosed risk factors (as in, “do you smoke?”, or “do you work with dangerous chemicals?” and the like) to determine your rate.
People with pre-existing conditions are no longer at risk of their condition: they already have it. Insurance provides for financial protection against the possibility of misfortune, but it will not provide compensation for misfortune that has already befallen you, so you can’t, for example, insure yourself against a house fire after your house has burned down. In reality, the money for treatment must come from somewhere, and in the health insurance industry business model those funds come from long years of premiums from healthy people. The insured can get treatment in excess of their premiums if they have the misfortune of being stricken, but only because the rest of the healthy pool is paying for it. The risk the insurance companies take is that you’ll do exactly that, whereas the risk the insured take is that they’ll have paid premiums for years and ultimately realize no benefit.
What Liberals are demanding reflects their Marxist, or perhaps, child-like understanding of the insurance industry. Insurance companies are not like Santa Clause. They have balance sheets. The money that comes in must cover the money that goes out or the company ceases to exist. There are no elves working in a North Pole workshop to fashion drugs and crutches for the needy.
Insurance policies are business transactions based on the risks inherent in a mutually unknown future. To demand that the insurance companies pay for pre-existing conditions without reflecting those increased costs in premiums is to demand that they finance an entitlement program, and as such it is completely unreasonable, but makes perfect sense if the aim is to destroy the health insurance industry. To term their legislation as a means by which to “bar discrimination” is just an effort to piggyback on the popular and moral support of anti-discrimination laws against racism and discrimination based on religion or sexual preference.
In order for this phrasing to work we also saw the introduction of the concept that health care is a right. Somehow, and never mind how. Liberals declaring that health care is a right does not make it so, any more than the declaration of little girls that it’s their right to have a pony, no matter how much they really, really want one. Even if it were a right, it does not follow that it is the obligation of insurance companies to foot the bill for pre-existing conditions.
The Public Option
The Public Option has been presented as a means of introducing competition to the market. I’d like to pause here to say that hearing Liberals speak in praise of free market competition is simultaneously amusing and infuriating. When the Left adopts the language of capitalism their words often reflect their misunderstandings and ignorance – or, perhaps equally likely, an attempt to mislead. Although it’s true that states limit the competition between insurance companies and thus limit the choices of consumers, this is clearly an issue of the states’ choice that can be resolved on a state-level basis. Resolving it on a national level would be a simple and not altogether unpalatable fix, and it would have the benefit of being easy and simple. If what they really wanted was more competition then that would be the way to go, and that’s why they didn’t go that way.
The Public Option is neither simple nor easy but it does provide the means by which the private industry can be destroyed by tilting the playing field in favor of the Public Option. Private companies have balance sheets, but the Public Option would be effectively exempt from that necessity. It’s easy enough to illustrate: imagine the premiums charged by the Public Option are insufficient to cover the expense of the program: will Liberals demand that we cover the shortfall with tax dollars? Of course. They might also raise premiums, but it’s the tax subsidy that is a dagger in the gut of private enterprise. By freeing the Public Option from the balance sheets the playing field is tilted against the private sector and can be the means by which the government can and would kill off private enterprise in this sector. The Public Option can outspend private enterprise by virtue of the bottomless pockets of the government which supports it.
Would they do such a thing? Considering the naked hostility Liberals have shown towards the health insurance industry, I’m guessing the answer is: Yes.
Yes they would.
This is the Monopsony Option, which polls very well amongst Liberals. The folks who tout the benefits of “competition” in the insurance market also prefer the stranglehold of a single buyer in that market. This, from the folks who decry the buying power of Wal-Mart; they want that power for the government to wield against the healthcare industry.
With the power to dictate – yes, dictate – price, the government would, as they have promised, extract the lowest possible prices from industry that they can. With less revenue the healthcare industries would be unable to funnel funds into research and development or hire the best employees. The best-case scenario of Single Payer would have the effect of stifling innovation by nearly eliminating the resources necessary for R&D and staffing their positions with people who will work for peanuts.
The worst-case scenario is that it would go further than that and kill off private enterprise in this sector by paying unsustainably low prices for goods and services. Metaphorically, it would be as if the government pushed them right to the edge of a cliff, and with the slightest misfortune of a breeze in the wrong direction, over the cliff they’d go, leaving a statist Liberal government and their supporters tsk-tsk’ing and saying, “Well, that’s just too bad – I guess we’ll have to rely on the government to provide those goods or services, too.”
The rebuttal is that Single Payer would drive down costs by reducing overhead and eliminating profit. Reducing overhead is a something our government is not motivated to do, so they don’t. Inefficiency is almost the inevitable result of government spending. Remember, POTUS Obama has said that the government will reap efficiencies by going after “waste, fraud, and abuse” in existing programs. If the government were motivated to do that, it would have done so already. The fact that there is waste, fraud, and abuse on a massive scale in those programs should act as a valuable object lesson in why we shouldn’t have these kinds of programs in the first place. Leave it to Liberals to draw exactly the wrong conclusion.
As for eliminating profit, it is not surprising that, at the same time that Liberals and Democrats have touted their support of free enterprise and the private sector, they have made plain their abhorrence of profit. I have been struck by the indignation of Liberals, never so plain as in the last few years, that these – or any – corporations make profit. As an industry, and at this time, the insurance business is only modestly profitable, taking in an average of 3.3%, which makes it only the 86th most profitable industry in America. This puts the lie to the assertion from the Left that taking the profit out of the health insurance industry would bring down costs. As an investment, insurance companies have a return on investment worse than some Rewards checking accounts. To define this as excessive greed, as gouging, is to declare that profits are inherently bad on the whole, which is why I say that theirs is a Marxist argument. If the modest profits of the insurance industry are under attack for being excessive then no business is safe from these Marxists.
Taken altogether, it is for the above reasons that I have been opposed to the Democrat “reform” proposals – they were all aimed at one ultimate goal: government takeover of the healthcare industry. But don’t take it from me – take it from Democrats.
Take it from candidate Obama in this longer excerpt.
Knowing that this is their goal, there’s no reason for me to be in favor of whatever incremental gains they can make towards achieving it.
The “47 Million” Deception
Add to that the inflated numbers of how many people would be “helped.” Remember the “47 million” POTUS Obama said were uninsured? Let’s not dwell on the logical chasm that Liberal pundits leapt with a single bound to extend that assertion to mean that 47 million people were without health care. Do you remember when that number magically shrank down to 30 million? Liberals, weren’t you the least bit concerned that, without explanation, POTUS Obama lowered this figure, and that Democrats followed suit? What happened?
Lay it at the feet of Mark Levin, who single-handedly – look, no help from the dogged investigative reporters of the MSM! – broke down the numbers from the Census and revealed the truth: the Democrats were lying.
“About 9.5 million were not United States citizens. Another 17 million lived in households with incomes exceeding $50,000 a year and could, presumably, purchase their own health care coverage. Eighteen million of the 46.6 million uninsured were between the ages of eighteen and thirty-four, most of whom were in good health and not necessarily in need of health-care coverage or chose not to purchase it. Moreover, only 30 percent of the nonelderly population who became uninsured in a given year remained uninsured for more than twelve months. Almost 50 percent regained their health coverage within four months.”
“Liberty and Tyranny”, by Mark Levin, p107.
The right accused the Democrats of planning to cover illegal aliens, and they were – of course – but they denied it at the same time they counted them in. One can only imagine that the lie became simply untenable as Obama mysteriously lowered the count to 30 million, a number that is still overinflated.
Many of the people Democrats claim to be “helping” are healthy young adults who have good reason for not spending their money on health insurance. The individual mandate will require them to do just that, so let’s reframe this for what it is: a massive and involuntary transfer of wealth. As candidate Obama told Joe the Plumber, he was going to “spread the wealth around.”
This healthcare giveaway to the poor will have to be paid for by someone, and it’s looking like it’s going to come from taxpayers, cuts in care to seniors, and young people who neither need, nor want, nor can afford insurance, but will have to buy it anyway. Ironically, young people were overwhelmingly supportive of him when he was running for the presidency. So, how do you like your redistributionist Marxist president now, kids?
The Individual Mandate
Is it within the constitutional powers of our federal government to compel the citizenry to buy goods or services from a private enterprise? I honestly don’t know, although it’s true to say that it’s never been done before. The examples given by the Left don’t seem to apply: for example, auto insurance is state-mandated, and besides which it protects others from the damage and injury that might be caused by you, as opposed to the health insurance mandate which protects you from, well, your own financial circumstances. FICA is a compulsory insurance program but it’s not run by private enterprise.
The mandate is necessary to help finance the plan – all those too young or rich to want to buy insurance will be compelled to do so and thus subsidize via premiums the expense outlay of health care for the poor and middle class. Yet, amazingly, although there is a mandate, the IRS can’t do a damn thing if you don’t pay it:
“The penalty applies to any period the individual does not maintain minimum essential coverage and is determined monthly. The penalty is assessed through the Code and accounted for as an additional amount of Federal tax owed. However, it is not subject to the enforcement provisions of subtitle F of the Code. The use of liens and seizures otherwise authorized for collection of taxes does not apply to the collection of this penalty. Non-compliance with the personal responsibility requirement to have health coverage is not subject to criminal or civil penalties under the Code and interest does not accrue for failure to pay such assessments in a timely manner.”
As is pointed out in the blog post to which I linked, the effect will be to encourage people to buy insurance only when they get sick or injured. This reinforces the argument that this legislation is specifically intended to put the insurance companies out of business. We’ll know if this was an oversight if that loophole gets patched up.
[Update 2010-03-31: OTOH the above might be a misinterpretation, as opinions differ. So it seems the IRS will be able to enforce the mandate. Less debt, more tax collection. Yay.]
Massive new spending and a massive expansion of government
It was bad enough that no sooner had the Congress passed Pay-Go – the requirement that new non-discretionary funding be offset by increased taxes or budget reallocation – than they immediately turned around and exempted an extension to unemployment benefits and COBRA benefits. Let’s grant the debatable merits of the proposal – we’ll let Krugman debate himself on that issue – and focus on the process at work. How can we not assume the worst; that, given the opportunity, power, and desire to simply exempt their handouts from the constraints of a limited budget, they won’t simply do the same, with any program, at any time? Think Fannie Mae, Freddie Mac, Medicare, Social Security, Medicaid, etc. More specifically, and pressingly, will Obamacare be any different? Put another way, should their budget projections prove to be in error, will there be any going back? Can you imagine the Democrats saying, “We thought it would save us money, but it turns out it’s much more expensive than we thought and it’s going to put us even deeper into debt, so let’s go back to the system we had”?
Nonsense. Never. For Liberals, entitlements programs once enacted are forever. For Congress, trust funds are for raiding, spending limitations are for breaking, and hyperoptimistic budget projections are for suckers, i.e., you.
Let’s be clear: Our country is deeply in debt, and has been for quite some time. The Democrats, from top to bottom, are planning to double that debt over the next ten years. That’s not a prediction, that’s their plan. That’s the plan, based on a best-case scenario, based on their fantasy numbers of a vibrant, growing economy, predictions that have already fallen short of reality. That’s the plan, come hell or high water, and no budget shortfalls will prove sufficient impetus to curtail that plan.
The Democrats have given us a new ginormous monster of an entitlement program. Where will the money come from? Where could it possible come from? Current chair of the Federal Reserve, Bob Bernanke, says the Fed won’t print the dollars to cover the shortfall. I suspect that if he won’t, he’ll be replaced with someone who will. Aside from that they could try to borrow the money, but already the AAA rating of the United States is teetering as the cost of borrowing that money goes up. They can’t possibly cut the budget sufficiently to make up for the shortfall, even if they slashed the DOD down to puny helpless European levels (which is, of course, what the Europeans did to afford their own universal healthcare programs). They could raise taxes – and they will – but the Laffer Curve can only be pushed so far before increases in the tax rate will result in decreases in tax revenues.
Do they care? Does it matter, given that the most optimistic interpretation of their actions is that they’re trying their best to help the economy? That is to say, if their intentions really are good, and this is the best they can do, does it matter whether they really do care? And does anyone remember when the Democrats were outraged at the fiscal irresponsibility of the Bush Administration, now dwarfed in comparison to our present Democrat-controlled government?
Or is it their intention to destroy the economy in order to remake it? They could do our economy more harm than they have, and my guess is that they will.
Our present disaster will apparently be eclipsed by a catastrophe. By design, however you look at it, even if you take them at their word that their intentions are as stated and benign. Liberal fantasies of “free” healthcare for everyone, unaffordable in the best of times, crammed down our throats at the worst possible time, in their willful fantasy-world disconnection from fiscal reality, have already sent us skidding into the depths of ruin.
What is to be done?
The Tea Party activists must make their influence felt, starting from the bottom up. The Republicans must stand together on principled financial conservativism and to hell with the social conservatives, and that is admittedly easier said than done. It’s a question, at this early stage, whether the Republicans will capitulate. It’s a real possibility that right-wing constituencies must make clear is unacceptable by any measure.
What I’d like to see happen is for a crushing defeat to the Democrats this November, and the November after that. What I’d like for them to do is to dismantle the socialist state that’s been built up over decades, to crush it. That’s not blustering hyperbole; I really mean it. One of the first acts of POTUS Obama on taking office was to cut off the funding for the nuclear waste repository at Yucca Mountain, giving them only enough money to wind it down. Note that he didn’t cut the program – he killed it. Let’s do the same to the cherished social welfare projects of the Left. Repeal Obamacare? Certainly, but we can’t stop there.
We can do the same to such fancies as the NEA. Wind them down and sell off the assets, from the buildings right down the stationary, and to their state employees we’ll give an apple and a roadmap as we send them on their way.
Let the Liberal-Left scream and shout, stamp their little feet, and hold their breath until they’re blue in the face. I don’t care. I want to leave them with nothing, so that if and when they regain power they’ll have to start all over again. From scratch.