Comments on: Obama’s Health-Insurance Cartel

By: Robert Patton

Robert Patton — Thu, 25 Feb 2010 14:45:41 +0000

In the last half century, the cost of medical care has increased by at least 5000 percent. That’s roughly five times the cost of living increase over the same period of time. The real issue is to identify the cause of this totally unacceptable growth in cost and do whatever it takes to roll back the costs to a reasonable level. Instead we are accepting these outrageous costs as a given and hotly debating who should foot the bill.

By: Obama Sticks with Broad Health-Insurance Overhaul | The Freeman | Ideas On Liberty

Tue, 23 Feb 2010 13:32:47 +0000

[...] Timely Classic “Obama’s Health-Insurance Cartel” by Sheldon [...]

By: Will A Federal Health Insurance Exchange Set Us Free? « Freedom Correspondent

Thu, 03 Sep 2009 23:41:20 +0000

[...] state mandates mentioned above and go further. For a good discussion on the requirements, go to the Foundation for Economic Education. §131 further gives the Commissioner control over marketing by the [...]

By: Free to Choose? « A Terrible Blogger is Born!

Free to Choose? « A Terrible Blogger is Born! — Sun, 30 Aug 2009 21:30:50 +0000

[...] Filed under: Economics, State — rmangum @ 9:30 pm Sheldon Richman has a good FEE piece on why Obama’s rhetoric about “competition” and “choice” and [...]

By: D Davis

D Davis — Thu, 27 Aug 2009 17:49:25 +0000

Exactly. At the SBABG blog just yesterday they were talking about this misuse or abuse of language and what libertarians and classical liberals can do to combat it, and specifically how obama’s use of the words choice and competition are so misleading.

http://www.sbabg.org/2009/08/26/the-power-of-language-how-to-expose-big-government-with-our-words/

Horwitz’s article is excellent. I’d also say that “profit” is not a motive. A better standard of living is a motive, and profit (in a free-market) is the signal that you’re achieving it. The “spread” between the cost (to you) of a service you provide and the price paid you is a measure of the value you are adding in the world. The higher the prices people are willing to pay for your services, the more good you are doing then. The lower your costs are for the services you provide, the more efficiently and less wastefully you are providing the service – conservation of scarce resources, better use and allocation of scarce resource.

If the spread between cost and price is widening (another way of saying profits are increasing), it is a sign that the standard of living is increasing for everyone. You are using less units of a scarce resource to provide an ever-more-valuable-and-useful good to others.

Profit is a feedback mechanism that confirms to you (again, in a free market) that you are engaging in right action and maximizing the standard of living for everyone.

By: Martin Kobren

Martin Kobren — Thu, 27 Aug 2009 11:08:46 +0000

Help me out with this. According to H.R. 3200, the only things an insurance company can consider in establishing premiums are age, regional effects and family size. If the government mandates a basic package of care and can no longer take group ratings into account, how will an insurance company know whether it will make a profit, particularly if it does not know the composition of its client base before it sets its premiums? It seems to me that they’ll be shooting in the dark. That means that premiums will bear almost no relation to the risk assumed. And it also means that insurance companies will begin to “redline” the public by marketing only to the healthiest people and avoiding people who are at risk for disease.

By: Adam Kilbourn

Adam Kilbourn — Thu, 27 Aug 2009 06:20:00 +0000

Mr. Richman,

You have written a wonderful article. I feel that the current conversation is being framed by those that want a larger role for government. So far, I haven’t heard a clear cut alternative that people can get behind. I have a question that I would love your thoughts on. If Congress were to change the tax law so that individuals could deduct their health insurance premiums themselves, would that be a positive development or not. Personally, I think it be something that Congress could get behind and put a feather in their cap. For individuals, they would finally have an incentive to purchase their coverage instead of being incentivized to have their employer pay for it.

Second, do you have a good idea for the issue of pre-existing conditions?

By: Dr. Steve

Dr. Steve — Tue, 25 Aug 2009 01:52:53 +0000

NHS care is not free! Nothing is but the air you breath and some places they would like to tax for that. If you want to put money in the pot for someone elses care, fine. That may be the “Christian” thing to do. There is nothing Christian about taking my money (or services) to give it to another against my will. That is theft, which the last time I checked was not condoned by God.
Infant mortality and life expectancy are not the best indicators of health care quality. Disease managment outcome is. There are to many other variables in the infant mortality , plus stastics are not always reported with the same standards. The same with life expectancy, to many other factors. A fifteen year old shot in the heart wrecks your statistics!

By: Strix

Strix — Mon, 24 Aug 2009 20:07:05 +0000

Why are you guys so excited about all this? Over here in the UK, despite what everyone says, we strongly approve of our NHS (National Health Service). No we don’t kill people – its illegal. Yes, even the poorest get treated free – thats morality (and Christianity). Yes if I want to jump the queue, assuming I paid my health insurance I can do so. But its interesting that If I’m REALLY ill I’ll go to the NHS every time, because for serious and emergency stuff they are actually better.

And as a result we have lower infant mortality, and higher life expectancy. We spend a lower proportion of GDP on healthcare, and we can still spend as much as we like individually on private healthcare insurance.

The only reason I can think of for all this hysteria in America is that it’s being whipped up by vested interests.

Here’s an example for you. 2 years ago I tripped in central London and ripped the quadriceps tendon completely off my knee at 5pm on a Friday, on the steps of the London Library. An ambulance (free, NHS) was called by a first-aider because I couldn’t walk. I was taken to a major hospital, where my knee was stabilized, and I was admitted (free). The next day I was operated on at 1 p.m. (free), and I was home, in plaster, on the Sunday. After the initial Physio consultation (free) there was a bit of a wait for the next appointment for some reason, so I invoked my health insurance and did the rest of the Physio privately. But it wouldn’t really have mattered – The result would be the same, if a little delayed. I am fit now, and can walk and even run.

So really, what are you guys compaining about? Don’t disrespect our health service, please.

By: Sheldon Richman

Sheldon Richman — Sun, 23 Aug 2009 15:27:00 +0000

“There shalt be universal and affordable health care.” Even busy congressmen might have time read that.

By: Sean

Sean — Sun, 23 Aug 2009 14:37:31 +0000

I read some of HR 3200 for the first time last night. It displays all of the usual hubris of government planners in stating its (at least alleged) goals in the manner of a god creating the universe by means of a speech act. Whatever its hidden agendas may be, on it surface it is one long string of magical thinking. Congress members could economize their translations of the health plan by distilling it into two words: “hocus pocus”. To stretch this metaphor further, we could say that the general population is placed in two roles: that of the audience who must enjoy the show and that of enslaved magician’s assistant forced to enact and prop up the charade. Government as magic act.

By: Sheldon Richman

Sheldon Richman — Sun, 23 Aug 2009 13:03:23 +0000

Mr. Jurgensen, I have long called for repeal of those things. I’d write “my representatives [sic]” were I not convinced it would be a futile act.

Are you contending these are not “big government programs”? Each one puts one’s life further under the control of politicians and bureaucrats. Do you disagree?

By: A.R. Jurgensen

A.R. Jurgensen — Sat, 22 Aug 2009 17:39:15 +0000

I gather you have contacted your representatives then to repeal the other Big government programs: SOCIAL SECURITY, MEDICARE, MEDICAID, the REPUBLICAN PRESECRIPTION DRUG PROGRAM and the V.A.???

No? Why not?

By: Dr. Steve

Dr. Steve — Sat, 22 Aug 2009 15:34:07 +0000

I would be suspect of any “facts” from Olbermann. Find a credible source.
If the insurance industry is anything like the doctor’s office, the cost of billing has risen from more complicated coding mandated by the government requiring “certified” coders at higher costs, more expensive updated computer programs, on and on……..

By: Sheldon Richman

Sheldon Richman — Sat, 22 Aug 2009 12:00:09 +0000

Kevin, I am not aware of a federal policy that fixes that ratio. Some states may have minimums, and those might have changed, but I do not know for sure. The state insurance regulatory regimes are elaborate. But government wouldn’t really need to explicitly fix the amount, since the everything happens in a cartel context. Since the system is set up to push us into employer-based insurance and the tax law makes noncash benefits better than cash wages at the margin, we overuse insurance — which is tantamount to a subsidy for the insurance companies. Years ago an insurance CEO told me it costs $35-$50 to process a $25 claim. Naturally the current system has high admin costs. As you know, the medical loss ratio would come down in a competitive free market because 1) there would be freedom of entry and innovation, and 2) most people would reserve insurance for potentially bankrupting events and not use it to make $25 claims.

The fact that the figure fell from 95 cents (as recently as the 90s) to 80 cents raises an interesting question. Why weren’t greedy state-related companies paying out only 80 cents ten years ago? Surely they didn’t just become greedy. I don’t know exactly what changed. Maybe there was more competition ten years ago. (Some competition can take place within a cartel.)

By: Kevin Carson

Kevin Carson — Sat, 22 Aug 2009 06:24:56 +0000

One disturbing factoid I heard on Olbermann last night: the portion of each insurance dollar that goes to actual delivery of service has fallen from 95 cents in the ’90s to 80 cents now. And the report said Max Baucus was negotiating with the insurance companies to lower the figure to 65 cents. So is the percentage of premiums that actually goes to fund healthcare services at any given time actually fixed by some sort of cartelizing policy at the federal level? Are companies that skim off the top protected by such policies against competition from lower cost providers?

By: Joe

Joe — Sat, 22 Aug 2009 01:48:16 +0000

What we need is national, government-mandated clothing insurance. See, when a woman becomes pregnant she has to acquire a maternity wardrobe and she couldn’t possibly be financially prepared for that. Or when a man or woman gain or lose too much weight they need a new set of clothing that fits. And of course the children need different sized clothing as they grow up. And needless to say, we’ll need a Clothing Commissioner to ensure all clothing purchased throught the insurance program meets certain minimum quality and fashion standards.

By: Obama’s Health-Insurance Cartel « thak’s cool links

Obama’s Health-Insurance Cartel « thak’s cool links — Fri, 21 Aug 2009 19:34:03 +0000

[...] Foundation for Economic Education » Obama’s Health-Insurance Cartel. More on the health-care debacle. [...]

By: Dr. Steve

Dr. Steve — Fri, 21 Aug 2009 15:31:00 +0000

Well done once again.
You ask what happens to the doctors? This one may hang up the white coat. Of course i don’t know if I’ll be able to afford health ins. since the price will go through the roof. What will happen to my unused funds in my health savings account? Maybe the government will confiscate it just before taking my retirement funds. After all, some people have not saved for retirement and that is not fair either.
As I said once before to you, this is not insurance. It is prepaid, low cost, wellness, assurance. It wont work! It wont be low cost, wont assure wellness. Insurance is a bet with the company. You are betting something bad will happen to you, they are betting it wont. It is a bet you do not want to win. People should be responsible for their own wellness.
You are so right about innovation being repressed. I have seen it many times over the years with medicare leading the way. It will only get worse.

By: TGIF: Obama’s Health-Insurance Cartel | Anything Peaceful

TGIF: Obama’s Health-Insurance Cartel | Anything Peaceful — Fri, 21 Aug 2009 13:32:04 +0000

[...] The rest of TGIF is here. [...]