The Unablogger
Don’t be fooled by the absence of the so-called “public option” in President Obama’s newest health care plan. It will lead to full-blown government-run health care, not by happenstance but by design.
First some background. Liberals want a total government takeover of health care that they call “single payer” (i.e., the government would be the “single payer” for all health care). The bill that passed the House of Representatives contained a “public option” that would compete (unfairly) with privately owned health insurers, but which falls short of liberals’ single-payer objective. Neither President Obama’s proposal nor the bill that passed the Senate includes any “public option.” This has caused many liberals to complain bitterly.
The liberal complaints, though, whether sincere or just role-playing, merely provide distraction and cover for the real Democrat agenda. The effect of the President’s plan, if passed, would ultimately be to drive private health insurers out of business, so that the government will have “no choice” but to step in with a government-run plan.
Here’s the deal. The House, Senate and Obama plans all include provisions that bar insurance companies from denying coverage to people with pre-existing medical problems or charging them more. This strikes at the very heart of the concept of how insurance works. Insurance spreads expensive risks around, so that a large number of people essentially pool their money to pay extraordinary expenses incurred by a few of them. Those unfortunate enough to incur the insured loss receive more than they pay in, but the funds are there to help because the other folks pay more than they get back. People are happy to pay for the peace of mind that their expenses will be covered if they ever become unfortunate enough to incur the loss.
But the health care proposals undercut that fundamental insurance mechanism, by allowing people to “game the system” by only buying insurance when they’re sick, so that everyone can assure themselves of getting more in benefits than they pay in premiums. The initial impact will be increases in rates for everybody, to pay for the sudden claims of the “leach” policyholders who didn’t pay until their loss had manifested itself. As usual, the folks who play fair will get stuck paying through the nose for who cheated. Ultimately, the folks who play fair will catch on, and the insurance companies will run out of suckers.
Proponents of the plan will argue that there won’t be any “cheaters,” because the legislation will require all people to buy insurance, which will broaden the risk pool, an argument that insurance company executives and lobbyists have fallen for. But, as insidious as such an unconstitutional compulsory purchase requirement is, it is toothless and ineffective. The punishment for not buying health insurance is a fine that is less than the cost of insurance. System gamers can simply pay the fine every year until a medical need arises, and then they can buy health insurance and be fully covered without further penalty. So the insurance company won’t really get new low-risk customers to broaden their risk. In fact, they won’t even get any revenue from the fines – the government keeps that, thank you very much.
With every insured guaranteed to “win,” the insurance company is guaranteed to lose, and ultimately go out of business. This is exactly what Obama and his fellow statists have in mind. With no private insurers willing to accept a “sure lose” risk, no one will have health insurance, an emergency begging for government action. And the government will have no choice but to provide health insurance. To deal with this “unexpected emergency,” of course.
They’ve had it in mind all along.
The Unablogger 