Thursday, December 24, 2009

The Nightmare Before Christmas?

The new senate health care billed just past this Christmas eve, has violated the original intent of the health care debate. As we all remember the whole concept of a public option was to, in the words of the political elite, "bring greater competition to the private insurance industry." Most people understood this was a ruse, and an attempt to start us down the road to a single payer system, and would have resulted in driving many insurers out of business. The public option was ultimately rejected, but this bill still goes a long way in driving many small group and individual markets out of business, by requiring  that after a company has surpassed 10% of its revenues on administrative expenses, it has to begin rebating back to its customers, determined by state regulators under the control of the secretary of Health And Human Services. Richard Epstein in his enlightening article in the WSJ explains in detail this process.

This as Mr. Epstein states, " turns the health insurance industry into a public utility." Why does the government control public utilities? It's a simple matter of regulating monopolies. Any industry that has complete control over  electricity, or any other energy source cannot and should not control who gets the source and how much they should have to pay. All that is regulated by governmental panels, that make judgments in the best interest of the public, but still provide enough profit for the provider to stay in business. Most areas of the country do not have a choice between  utility companies, and therefore control is needed.  

The health insurance industry is not a monopoly. But as best as I can determine from the Reid bill, it will regulate it as if it were one. This is obviously going to bankrupt many insurers, and lead ultimately to higher rates, as competition is lessened. The larger insurers will thrive, as the mandate to buy insurance will swell their rolls, and the smaller group and individual insurers will fall by the way side. Talk about unintended consequences. This seems to be the exact opposite of the original intent of the whole health care debate. But, isn't that what we've come to expect from government involvement in the free market system.

The ironic twist here is not unlike the governments involvement in the financial bailouts. The large firms were bailed out because they were deemed, "too large to fail," while the smaller local banks and financial institutions were left to twist in the wind. Now, we once again see those huge financial institutions making enormous profits, and passing out obscene bonuses. Of course this is not a bailout of large health care insurers, but the results will ultimately be the same. Is there any other reason why the insurance industries stocks have skyrocketed the closer this bill gets to becoming law? The small minded and power grabbing congress has essentially decided that they're going to take control over 1/6 of the US economy, and they are unconcerned about the unintended consequences of their actions.

Greater competition could have been achieved by simply passing laws that allowed purchasing insurance across state lines, and opening up the market place to hundreds of new options. But, of course the elites wouldn't want free market capitalism to solve the very problems they instinctively believe only they can solve. That of course would lessen their importance, as well as control over the lives of all their subjects. There is only one silver lining, and Mr. Epstein explains that in his article. This should not pass constitutional muster. As of yet, I don't think the legislative and executive branch have control over the judicial branch. But, I'm sure they're working on it in some back room someplace in the town we used to call the arbiter of freedom for all the world, but now has become a hell hole, a fascist paradigm, a stinking cancer. The Name sake of that once glorious town, George Washington, used to spend his Christmas's Fighting for our freedom and crossing freezing, raging rivers, while the new inhabitants spend their Christmas passing a law in secret, they hope will ultimately control our lives, and the lives of our children for generations to come.
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