I blog about free markets in medical care and transparent pricing.
Try to think of Obamacare as yet another bail out of a troubled industry. Many folks, financially able, had elected to forego the purchase of health insurance. This was due to the fact that in their minds as consumers, the value of the product didn’t match the price. Purchase of health insurance didn’t seem like a “win-win” deal. Part of the reason for the high price is that insurance companies had successfully lobbied to the gunvernment to mandate the coverage of certain services in insurance policies, services for which many people had no use. In other words, folks were forced to buy insurance policies that covered risks that were very unlikely to be encountered.
One could not buy a policy without coverage for mental illness, drug abuse, maternity care, etc. The consumer was no longer in control of determining the risk/benefit in the insurance product. One had to buy this coverage whether they wanted to or not. This, of course, drove the price of the health insurance policies through the roof, along with the profits of the insurance companies. Rather than adjust to this distorted market, more insurance mandates were issued. Fewer and fewer people found these policies to represent a value and therefore risked the position of the uninsured.
Enter the gunvernment into the market arena. Out come the guns. ”Let’s just force everyone to buy these awful insurance policies. Furthermore, let’s disallow policies like high deductible policies, that encourage consumerism in health care. This “first dollar” coverage will maintain premiums or even drive them to the stratosphere!”
Insurance executives have told me over the years that the current situation was unsustainable. What they really meant was that more and more people were abandoning their product, making a go of it on their own, rather than buying in. In most cases, this is a good bet, particularly for the young and healthy. If they were to save what they would have to pay for insurance premiums for a year or two, they could afford just about anything that human illness could throw at them. Not always, but almost always.
Even now, the price of an open heart surgery in Oklahoma City at a physician owned cardiac hospital (with outcomes as good as the big names) is $26,000. A total hip replacement? $18,000. A cervical fusion (including hardware) at my facility (easily over $100,000 at a typical “not for profit” hospital), $21,500. These numbers are very near one year’s insurance premiums in Massachusetts, home of Romneycare.
This increase in the price of insurance, in excess of the care it would buy, was going to lead to only one place: fewer and fewer people playing this game. Answer? Have the gunvernment make everyone buy this crap and put most of the companies (leaving only a few giants in business) out of business in the process, preventing the competition that would keep these corporations honest. Obamacare was nothing more than a bailout. The insurance companies were bailed out of a situation they had created with their gunvernment pals, one that did not bode well for them.
I like Thomas DiLorenzo’s term, fascialism. This combination of fascism and socialism perfectly describes the operation of this gunvernment, one which brings us crony capitalism coupled with massive wealth redistribution. We are left without the freedom to not buy something we don’t think we need. Think about that and what it means. Lew Rockwell has characterized the GM bail out in the same way. We basically all bought GM cars against our will but never took delivery. We were made to buy their cars with our money yet no car was in the bargain.
Obamacare is no different. We are all now forced to buy a product that many don’t need or want. The insurance products that we might want will not be allowed on the market as there is not enough profit in it for the insurance companies. Little health care will be available as the pressure to deny care in order to increase profits will be manifest soon enough. Pay against your will, coupled with a contract breach. That is the nature of a bail out and the nature of Obamacare.
G. Keith Smith, M.D.