Sunday, September 13, 2009

Obamacare: Suspending the Laws of Economics

In exchange for some bitter tax pills, Obama promised Americans would get eternal health care "security and stability." To deliver that, he would of course ban insurance companies from denying coverage to those with pre-existing conditions--tantamount to forcing fire insurance companies to write coverage on a burning building. He would also prohibit insurers from putting any limits on the coverage they offer and cap what they can require patients to pay out-of-pocket.

In other words, Obama would encourage unlimited health care consumption by patients while eliminating the last vestige of price consciousness. But the reason America is facing unsustainable health care cost increases is precisely because its third-party system of insurance doesn't encourage prudent consumption by patients. Indeed, if Obama really can tame health care costs by making patients even less cost-conscious, I have an even better idea for him: Simply pass a law banning anyone from falling sick and mandate good health for all. If he can suspend the laws of economics, perhaps he can also transcend the laws of physiology.

~Shikha Dalmia in Forbes

HT: Scott Grannis

11 Comments:

At 9/13/2009 10:25 PM, Anonymous Anonymous said...

Why not open the federal employee health insurance program to anyone willing to pay the full premium? This would make insurance available for anyone who wants it and is willing to pay for it. It uses private insurance companies that compete for millions of customers. No pre existing conditions here.

What the democrats want is to control health care, banking, energy, manufacturing and as much else as they can grab before the American people realize they have lost more of their freedom and property.

 
At 9/13/2009 10:42 PM, Blogger OA said...

While he promised those things, he also hasn't been challenged on the increase in premiums that's likely to result.

Insurers have to meet regulatory financial standards so they can't just absorb those extra expenses without cutting elsewhere, or raising premiums. No capped total but capped copays leaves only 1 alternative.

In fact the way not to be the company that everyone with pre-existing condtions ends up with is to not be the lowest price. What else would they compete on afterwards other than price and the provider network?

 
At 9/13/2009 11:19 PM, Anonymous Anonymous said...

I agree with Anonymous.
Note that the article views insurance as a purely business item. Yet in many countries and in some areas in the US insurance has been socialized. It then works by the law of large numbers much more than by risk selection, which is really only possible because of computers. We have socialized wind insurance on coasts and flood insurance because no one but society can take the risks.
For health care the mandatory insurance option for those under 65 (over 65's have it already) would say that we are all in it together and while the odds are quite good that at age 25 you won't need much, they are not zero, there may be a truck out there that has you in its sights.
Really this comes to the basic point of a number of issues, are we all in this together or is it every man for himself? Society world wide has tended to move to the were all in this together side over the last century, as farming has become a smaller part of employment base.

 
At 9/13/2009 11:43 PM, Anonymous Anonymous said...

We have socialized insurance on the coasts because the people's representatives in these areas lobby the government to provide below cost insurance. Private insurers have beening pull out of these markets because of the rates set by state insurance commissioners that are based on politics and not risk.

 
At 9/14/2009 12:40 AM, Anonymous Anonymous said...

Yes if the majority want socialized insurance they will get it. That was Andrew Jacksons basic idea. If a majority of americans truly to go to a social democatic model then we will go there.
If the a majority wants to move to a more social democratic model then thats were we go since this is a democracy.

 
At 9/14/2009 2:03 AM, Blogger OA said...

Anonymous said...
Yes if the majority want socialized insurance they will get it. That was Andrew Jacksons basic idea. If a majority of americans truly to go to a social democatic model then we will go there.
If the a majority wants to move to a more social democratic model then thats were we go since this is a democracy.


This is true. The problem is the government is increasingly taking unevenly from some and giving unevenly to others. No one ever intended the federal government to do transfer payments.

 
At 9/14/2009 6:49 AM, Anonymous geoih said...

Quote from Anonymous: "If the a majority wants to move to a more social democratic model then thats were we go since this is a democracy."

And that is why it will never work. No concept of reality.

 
At 9/14/2009 7:49 AM, Blogger 1 said...

Considering how long the American public has known or should've known how much waste, fraud, and abuse there already was in medicare and medicaid why wasn't Obama laughed out of the room the first time he attempted to dazzel the dummies with his rhetoric?

FBI Director Louis Freeh testified before the Senate Committee on Aging that cocaine traffickers in Florida and California were switching from drug dealing to healthcare fraud, because it was safer, more lucrative, and less likely to be detected (Shogren 1995)...

 
At 9/14/2009 9:07 AM, Anonymous Anonymous said...

"If the a majority wants to move to a more social democratic model then thats were we go since this is a democracy."

The United States is not a democracy. The United States is a constitutional republic.

It never ceases to amaze me that so many people do not know this simple fact.

 
At 9/14/2009 10:00 AM, Anonymous Rand said...

The other affect of forcing private insurance companies to provide below cost insurance to certain groups is that the cost to the remaining groups must be raised in order to break even. From an actuarial viewpoint, insurance is a zero sum game.

 
At 9/14/2009 10:06 AM, Anonymous Rand said...

1 quoted:


FBI Director Louis Freeh testified before the Senate Committee on Aging that cocaine traffickers in Florida and California were switching from drug dealing to healthcare fraud, because it was safer, more lucrative, and less likely to be detected (Shogren 1995)...


and I add, not only that, but you get to sit in a comfortable office instead of standing on a dingy, cold, wet street corner.

 

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