One of the most unsavory remnants of the Obama era is known as the “private mandate,” a requirement that every citizen purchase health care insurance from a private corporation, or face a severe penalty. This requirement led to a new bureaucracy that tracked every American to make sure we had insurance. It was suffocating and onerous – the health insurance industry (“Americas Health Insurance Providers,” or AHIP for short) bullying us into buying their crappy products, using Obama as a sock puppet.
The Affordable Care Act, ACA, or “Obamacare” (as if) was challenged in court on this basis, and was spared by a 2012 ruling that said that the penalty is a tax, and Congress has the power to tax. I do not know if this was an unintended consequence, or if the people around Trump are really that clever, but in late 2017 as part of a broad tax bill, Congress eliminated the penalty. The Fifth Circuit recently held that 2017 act constitutional, and here is the catch: The “attributes that saved the [ACA] statute because it could be read as a tax no longer exist.” The writing on the wall says Obamacare is dead! Long live Obamacare!
Josh over at Cutting Through the Fog once wrote about a concept called “racketeering,” and it applies here. I am aware that if we are not required to purchase health insurance from private companies, those companies will circle their wagons back into the “preexisting condition” regime. For decades AHIP used that lever to punish us, refusing to issue insurance policies for a whole host of illnesses from diabetes (still in effect) to heart ailments – anything that might affect their bottom line. When AHIP basically wrote and passed ACA in 2010, it was racketeering come full circle.
Here’s another way to look at it: Suppose you run a small storefront pizza parlor in Manhattan. One day a vaguely threatening heavy-set man with hands in the pockets of a heavy overcoat comes in the store and says “Listen. I gots a deal fer ya. I will pertect choo. Say some kid comes by and breaks yer windows, I take care of dat kid. You don’t gotta worry no more. All you gotta do is pay me $200 a week.”
The message is clear – if the parlor owner doesn’t pay the $200 a week, his windows will be broken, again and again until he submits.
That’s racketeering – creating a problem in order to be paid to solve the problem. AHIP approached Congress in 2010 intent on solving the preexisting conditions problem … a problem that AHIP created.
All that ever need be done regarding preexisting conditions was this: Suppose at an AHIP meeting, a heavy-set man with his hands in the pockets of a heavy overcoat comes in the room, walks up the aisle, and takes over the podium. “Listen, yoose guys. I gots a deal fer yas. When my people dey come to you and they dey want health insurance, you gotta sell it to them. If ya don’t, you deal wich me. Got it?”
That is something AHIP would understand, thug to thug. There would be warmth and mutual respect in that room.
Oh, I know … the problem behind preexisting conditions is called “adverse selection.” That means that in the absence of a mandate, those who need health care the most are the ones most likely to purchase it. Those who don’t need it, especially the young, are likely to go bare. Consequently, insurance companies go belly up, not a bad thing.
Adverse selection is the justification behind preexisting conditions, but I have never read it that way. I have always thought of adverse selection as the reason why we should not have health insurance companies. They cannot exist without either the ability to turn customers away in droves, or with government coercion behind them, which is all Obamacare was. If the government is going to force us to buy health insurance and force AHIP to sell it to us, then it is only logical that the government should offer a public option, or the ability to avoid dealing with a private cartel in order to obtain health care. That’s basic freedom of choice. We do live in a somewhat free country, so that no one should be able for force us to buy their product. That smacks of fascism.
As you might suspect reading this, I think the US ought to do to health insurance companies what Canada did to theirs back in the 1966 – boot their sorry asses out. They are not involved in health care. In economic terms, they are involved in two interacting activities:
- Rent-seeking: “In …economics, rent-seeking means seeking to increase one’s share of existing wealth without creating new wealth.” The health care system can exist without AHIP, but AHIP cannot exist without a health care system. AHIP does nothing to make health care better, only leaches money from the system. In order to force the health care system to line their pockets, AHIP also engages in …
- Economic enclosure: Think of it in terms of an allegory. You live in a small village where farmers share land for grazing in nearby fields. The system is self-regulating in that overuse of pasture results in no one being able to use it. Along comes an “investor” who erects a high chain link fence around the pasture, and charges entry. He doesn’t own or maintain the pasture, only the fence. Nonetheless, if villagers don’t pay him, their cattle will starve. That is in effect what AHIP has done to our health care system. AHIP has never so much as provided a bandaid, but has built a fence around the health care system in order to charge us for entry.
The United States had a choice at the end of World War II on what kind of health care system it was going to build. Where other countries reasonably and sanely chose systems like government-run health care (Great Britain), or single payer (Scandinavian countries and later Canada and Taiwan), or regulated insurance (Switzerland), all of which work reasonably well and cover 100% of their people at far less cost than our system, the United States chose a Rube Goldberg system of employer-provided health care. It was as if employers did not have better things to do. The effect of this was to empower the insurance industry, as it relieved employers of the administrative burden. It also had the effect of chaining employees to their desks, as employer-provided health insurance was not portable. Loss of job meant loss of health insurance. (In countries with single payer, etc., coverage is automatic and by definition goes with the person, not a company.)
Health insurance companies grew more powerful over time, and were perhaps at the apex when they backed Obama and passed ACA though him in 2010. By that time they had grown wealthy and powerful in their rent-seeking behavior and were able to enclose almost the entire health care system. There were only a few health care outlets that did not force us to deal with insurers, such as Medicare, Medicaid and the VA, which have been widely and unjustly mischaracterized and ridiculed in our controlled news media.
There appears now, with elimination of the private mandate, to be a backlash. The so-called Public Option suddenly breathes new life. But it is hard to tell where we go. Bernie Sanders and Elizabeth Warren (and the so-called “Green New Deal”) are pushing something called Medicare For All. That is effectively single payer, and would serve to disempower AHIP, and eliminate one of the primary causes of health care cost inflation – private insurance companies. Opponents claim it would cost “trillions.” I don’t see that. I don’t see how removal of AHIP from the most expensive health care system in the world would do anything but make the system more efficient and cheaper. Medicare for all would save us money, not the opposite.
Of course, the problems are a little more complex. As a rule in our country, when you see people like Sanders or Warren rising to prominence in favor or opposition to some policy, it is a sure bet that they are controlled opposition. I trust neither of them. Our only hope is grassroots organization and power, and introduction of reforms in laboratories called “states.” If we are indeed to have real health care reform, it will be a slow trial and error process done at the local level. No more Obamacare.
PS: To head Big Swede off at the pass, the standard right-wing answer to our health care problems is to allow people to cross state lines to buy insurance. While that in principle sounds wholesome, in effect people would flock to those states that offered the cheapest policies with the least coverage, in effect causing massive under-insurance. I would support the concept if there were a law in force guaranteeing minimum standards for health care coverage, and perhaps the remnants of Obamacare might serve that purpose.
Piece of Mindful 
No more Heritage-Romney-Obama care! What is insurance if not a (government-licensed/permitted) racket?
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Switzerland: I lived there for a decade. There is one important difference between their system and that of the U.S. In Switzerland prices/costs are regulated, and health insurance companies are not allowed to profit from non-elective procedures. What that means in practice is that an MRI, for instance, costs thte same no matter where you receive it; contrasted with something like a nose-job or tummy-tuck or the like, which can vary wildly from company to company.
I once went to a local clinic fearing I may have had/been having a heart attack. I was seen within 5 minutes of entry. They took several vials of blood and did a full EKG scan. Less than 10 minutes later they had the results of the blood work and scan. I was out of there less than half an hour after I arrived, and my total out of pocket costs were…. 50 francs, or about 50 USD.
On the flip side my monthly insurance bill was around 430 francs per month. My spouse’s was just under 400. 430 dollars a month is quite a large bet against oneself, in my opinion. Seeing as that one visit was my one and only illness while I resided there I thus paid around 5,000 USD for an EKG and some bloodwork.
Not so different from the U.S. after all, really.
Everything is a racket. The entire financial system is a racket from its inception. Insurance is just another layer of the racket-cake, whether it’s car insurance, health insurance, homeowner’s insurance, business insurance, renter’s insurance or any other form of the scam. Trying to address the “healthcare” issue without tackling the underlying issue of a debt-based economy is just another shell-game. As long as every dollar in existence continues to be created AS DEBT we will never have a “fair” system of any kind.
Every single one of us is working for the central banks who loan the goverment its currency. It doesn’t matter if you’re paying a health insurance company, or paying into a governmental system like Medicaid via taxation, or donating to the Salvation Army Santa on the corner or stuffing money in your mattress for a rainy day. All of it is being funneled up the pyramid to a very, very small group of private individuals. It’s THE elephant in the room.
The saddest aspect of that truth, to me, is that if the government actually created the money itself, as opposed to empowering a private group to do so and then paying that group interest on its made-from-thin-air dollars, there would be no need whatsoever to tax… well, anything. What would be the point, when instead the government could simply allocate to itself what funds were needed? Where would the sense be in creating dollars, putting them in circulation, then retreiving them via “taxation” to pay for this service or that, a bridge here, roadwork there, etc?
Then again, “The spice must flow.”
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Good points and good to hear from someone who actually experienced private insurance in another country. My only thought was that by our standards, $830 francs is not a bad premium. Here I would expect you’d be paying a monthly premium if more like $1500-2,000 with copays and deductibles and a MOOP, or max-out-of-pocket of something like $16,000. Theoretically, say the monthly premium of $1,500, a family could spend $34,000 before insurance would have to cough up a dollar. They really wrote a lot of protection for themselves into the ACA bill.
Back when ACA first took effect, there was talk of silver, platinum, gold policies, all of that (no mention of pot metal or plastic policies, more realistic). I decided to make up a bunch of medical costs including outpatient and inpatient surgery and a bunch of other stuff, and then ran them through the various policies to see how much, including monthly premium, I would be out. What I discovered was that it made no sense to purchase anything other than the most basic policy, as the MOOP dictated ultimate coverage. Silver, gold, platinum policies merely eliminated or minimized deductibles and copays, thereby delaying MOOP arrival. Do you think I could convince anyone if this? Of course not. I was not seen as an authoritative source. Only insurance salespeople were.
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“Where would the sense be in creating dollars, putting them in circulation, then retreiving them via “taxation” to pay for this service or that, a bridge here, roadwork there, etc?”
At the federal level, functionally speaking I believe they already do what you suggest. On the surface they appear to be borrowing dollars from private bankers who wave them into air, and paying interest, but functionally (as the federal debt attests) they are basically just doing as you say they should. (The military is certainly not limited by tax revenue.) And they are just using taxes to regulate circulation of dollars among private individuals. As I understand MMT.
The veil or misdirection of the conventional story is very useful, because A) The public at large is offended by “money creation” and B) the illusion that taxes fund spending is a great excuse not to spend on programs or goods the public may desire.
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You have no idea what you’re talking about with regard to the central banks and government spending. In the US, the Federal Reserve does NOT “loan” money to the government. Quite the opposite in fact. The federal government sells debt to primary dealers in weekly Treasury auctions. The Fed can then purchase that debt (with money created from nothing, yes). You don’t seem to know about a very key detail here though. The Fed RETURNS all the interest it receives from its holdings of government debt. I guess you didn’t know that, huh? So you see, the Fed enables the government to run massive deficits by purchasing a portion of its debt and thus making it interest-free, which is the exact opposite of what you said was happening.
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People are indoctrinated to love the state and hate business. Not only in socialist countries as the Netherlands and Scandinavia, but even in the US, seeing Mark’s continuing adoration of the state.
Big businesses are avoidable, and that is a great trajectory for agorism, counter economics. The state is not avoidable, a simple fact the statists refuse to accept.
The state is always the real culprit. They have the weapons, laws, “education”, social engineers and of course the daily robbery of the people’s hard earned money.
Anyone “awake” can never ever be a statist. The two are mutually exclusive.
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“Continuous adoration?” You’re speaking with loose words. I only know that our “free market” health care system is wildly expensive and excludes far too many people. Countries with single payer, government run, or regulated private insurance, no matter the complaints, do better.
That’s the extent of my adoration.
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So a system based on theft you call “better”. Or “doing better”.
Do you really think that in the socialist countries I named there is no private insurance. Holland has it and Colombia too. And it is far preferable over statist steal-from-the-one-and-give-to-the-other systems.
You shouldn’t confuse YOUR unique situation (it is the US that is expensive with health “care” programs] with the rest of the world.
Statism kills, robs and pretends to play the moral hand. You can choose with whom you do business. You cannot choose not to support the state, as their measure is kidnapping and putting you in a cage.
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You forgot to use the word “batshit.” You were given a reprieve, and you have been somewhat restrained. Bans are never permanent here, as people get carried away. So for the new year I let you back in. But you are really just batshit crazy. Good bye again.
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As the State has become more involved in the healthcare industry over the past several decades, have things become better or worse? Decades ago, some doctors would actually go to houses to provide care. The State has screwed things up royally, and your answer to the problem is MORE government involvement? Everything the government touches gets substantially worse. Why do you think college tuition costs continue rising? It’s because the government hands out student loans like candy, and the universities know they can continually charge more since the government will always be there to provide financing. Thus, there is no competition and no free-market mechanism to limit the constant increase in the supply of credit, which of course leads to higher prices.
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The AZT-for-AIDS massacre comes to mind as painful analogy.
More venom to heal the snakebite.
Mark, ask steve. He should be able to tell you how many good hearted well acting moral people there are. Unfortunately the big NGO**s have gobbled up quite a few of them but projecting the pars on the toto is one of the main fallacies people should detox from.
I offer just that at the jawdropping backdrop of the amazing Andes.
Medical treatment at own choice can be arranged.
The only limit is your own imagination
**Nefarious Governminding Octopuses (or any similar abbrevation to your liking; The free market of language
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The big thing Obama care does is eats up income. Just like taxes. It sucks up disposable income, kills the ability to save, and gets worse as you get older. Make sure your kids and grand kids will never own anything and be renting for their entire lives. Vampire Sustainable Human Centipede Economy.
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Did my comment get spammed or didn’t you like it?
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Crossing state lines limits the collusion between state legislators and insurance companies. Currently in MT we have only a choice of a few providers. Providers which lobby to protect their monopolies.
IBM once had the market on computers, then came Apple and Microsoft. We need competition in the market place to innovate and lower costs. We don’t have that now.
I’m not going to get into all the details of a more open marketplace, so I’ll defer to this article.
https://openmarketsinstitute.org/explainer/health-insurance-and-monopoly/
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Very much.
The most ideal way would be to start an own agorist fund to stay away as much as possible from statist measures. Find our own ways. Away from “systems”, that by definition do not have the best interest of us or our families and friends at heart…
For those not aware of the practical philosophy of statheism, Agorism
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And as “heading me off at the pass” is concerned i’ll leave you with a quote from Elie Wiesel.
“Always take sides. Neutrality helps the oppressor, never the victim. Silence encourages the tormentor never the tormented.”
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Oddly inappropriate.
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Swede, in case you are not aware, AHIP is the free market. It is what naturally happens in rent seeking situations. Insurance companies are only in it for the money, add no value to the health care system, and naturally form a monopoly to protect their status.
Agaim, for the zillionth time, other countries do more, cost less, are are far more efficient than our Rube Goldberg system. Deal with that, for once, deal with THAT and not your free market utopia that has failed us so miserably.
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“Swede, in case you are not aware, AHIP is the free market. It is what naturally happens ….”
Huh???
You cannot mean this Mark.
A Bigharma front is “the free market”.
No, tribal trade is. That where we come from, you know “what naturally happens ….”
“Tartaria”, Muisca, self sufficient non empire driven societies.
That is the way forward, the free market.
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Language barrier, Gaia. I am saying that free markets don’t exist, or if they do, are scary things that people run and hide from. Take the market for labor … left unregulated, what does it lead to? sweatshops and slaves. That’s a true “free market.”
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Whut. Since when is the state gone.
That eternal system of slavery you magically exclude now. Almost like a NASA cartoon.
The only free markets are the ones we make ourselves. The free market of ideas, the freedom of language, etc. Let’s explore those further For The Future. Grow, evolve, develop.
Not run to the state for survival, that is like going on a date with Al Bundy.
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It is part of our groupthink or propaganda to demonize “the state” as the enemy when it can be the only friend an ordinary person has. There is power in grassroots organizing. Ordinary people are not very smart, and alone have no power. Together they have more potential, but are discouraged from such tactics by being told that reliance on “the state” is weakness. It’s just a neutralizing tactic.
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And that is the exact thing you should DEPROGRAM from. This only exists in your head. We ARE very powerful and that is what we should use and explore further.
Agorism is the only way forward, especially in an Asocial Credit Scheme driven world, which it will be in or shortly after 2030….
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I live and walk among them, the Silent Majority, Walking Dead. Of course I know them.
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It’s ok, boomer.
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What an original thought, Milly.
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Crossing state lines is fine for so long as people are nit running to the cheapest and worst coverage. If insurance companies are regulated, required to cover basic care, then fine, cross away. But you and I both know what is not what happens. It becomes a race to the bottom, massive underinsurance. health insurance is wildly overpriced in our “free” market already, so it is natural people will run to the cheapest coverage.
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PS: Swede, you’re not known as someone who reads anything you are not predisposed to agree with, or ever more than a skim of the first and last paragraph. (I put that PS at the end knowing you would not otherwise catch it.) Chiding people for not reading material you bring is the height of hypocrisy.
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Are these the minutes of the “Democrazy Party”.
It is all leftist bullcrap I read. “Regulations”, muhahahaha. Yes, the state is going to save our sorry asses from the big bad businesses, keep dreaming and have fun with your AOC doll if you believe this.
How can otherwise awake people be so vast asleep when it is about statism. Baffling, really.
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Since no one is interested in my above link I’ll quote a few paragraphs.
When Americans buy health insurance they typically find they have fewer and fewer choices. In some states, such as Alabama, a single insurance company has a near total monopoly. In half of all metro areas, just two health insurers divide two-thirds of the market.
This high degree of concentration has been building for years. A study published in the American Economics Review in 2012 found that the share of U.S. communities in which health insurance markets had become “highly concentrated” (using the standard deployed by Federal anti-trust regulators) increased from 68 in 1998 to 99 percent in 2006. The same study concluded that this increase in concentration had caused a seven percentage point increase in premiums over the period.
Today, monopolization extends to all forms of health insurance, from policies purchased by individuals on “Obamacare” exchanges to group plans purchased by employers and Medicare Advantage plans purchased by retirees. The Kaiser Family Foundation estimates that by the end of 2017, 22 percent of people purchasing health care insurance on the exchanges created by the Affordable Care Act will find that only a single company is offering policies in their community. Another 21 percent will find that the exchanges in their community carved up by a duopoly of just two insurers.
Meanwhile, the latest available data show that the percentage of the Medicare Advantage market controlled by the top four largest insurers increased from 48 to 61 percent nationwide between 2007 and 2015. For individual and group policies, the increase in the market share of the top four firms when went from 74 percent in 2006 to 83 percent in 2014.
Some observers defend health insurer mergers by arguing that they help to restrain the cost of health care. When a health insurer has lots of market power in a community it is usually able to negotiate for lower prices with local health care providers, including hospitals, doctors, and labs. Providers know that if a locally dominant insurer doesn’t include them in its network they will lose many or even most of their patients, and so these providers agree to discounts. Just as Wal-Mart is able to squeeze its suppliers for price concessions, so to can large health insurers, using what economists call the power of monopsony.
So insurance companies collude with governments and buy each other out consolidating into mega firms with no anti-trust penalties.
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Nice description of how “free markets” really work. As the former head of Archer Daniels Midlands said, roughly, there are no free markets. Customers are our enemy, competitors our friends.
I spend a lot of time at Heartland and I read National Review. Lotts good stuff. But when I see the words “free markets,” I cringe. They only work a little bit, to the extent they even exist.
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Dwayne Andreas, former head of Archer Daniels Midlands: “The only place you see a free market is in the speeches of politicians.” He also said in private exchange with peers, “Customers are our enemy, competitors our friends.” That’s the real world Swede. Free markets are a frightening fantasy to anyone in the business world. People hide from them. The only people who really have to deal with them are low wage workers, always one firing removed from starvation. I know, you hate it when gubbmint steps in and helps such people, as you regard yourself as some sort of Randian John Galt. That presumptuousness is your most annoying trait.
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You need to re-read Dwayne’s bio. His perspective on free markets came from his guilty conscience. He circumvented federal law with illegal contributions, which confirms that governments collude against the publics best interests.
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Mark, thousands of miles away in his own creality*.
Me, doing live free market business with those who deserve it, the true moral free agorist market, as we speak.
There is nothing more stupid than denying reality.
*created reality, i.e. that what only exists in the mind
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Crealities are a common phenomenon with alcoholics. It is an effect of using alcohol.
If I recall well, Mark is a teetotal, so then it is extra surprising.
Maybe the brain cannot grasp too big of a principle change after a certain age, I don’t want to speculate. We need to help him deprogram and detox from his creality of statism. This is projecting a minor pars to a moral question.
Do people embrace voluntary love making or are they ok with rape.
To me such question seems quite fundamental, more than some medical bills (I recommended and linked, but you are right, useful and insightful links are to a blind wall here, Colombia], that can be easily avoided.
My medical bills are too high that’s why the state is good.
Insanity, really.
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I don’t need to read anything more. Free markets are a fantasy. The only ones who see them clearly are low wage workers, who have to endure them. Slaves endured market freedom. Government had the audacity to free them. There is an indirect relationship between degree of belief in such nonsense and amount of protection one has from them. Labor unions and corporations each seek to protect their members from them. You only believe such protection should be extended to corporations. Screw workers.
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