Archive for March, 2010

Obama’s ‘back door’ government-run health plan

The Unablogger

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.

Why not Kudlow vs. Gillibrand?

The Unablogger

The Unablogger

New York Republicans seem to be divorced from common sense. After the Dede Debacle in the special election in NY-23, maybe we shouldn’t be surprised. Maybe it’s time for the little boy on the sidelines to tell the king that he isn’t wearing any clothes.

New York will elect both of its U.S. senators this November, the regular full term for the seat held by Sen. Charles Schumer (D) and a special election for the remaining term of the seat currently held by interim Sen. Kirsten Gillibrand (D), who is seeking retention to a full term. (That seat was vacated when Sen. Hillary Clinton resigned to become Secretary of State and filled temporarily when Interim NY Gov. David Patterson filled the vacancy by appointing Gillibrand.)

Polls indicate the Gillibrand is relatively vulnerable, while the more established Schumer is relatively safe. In spite of the likely Republican wave building for the 2010 elections, Republicans are having difficulty recruiting challengers.

Schumer is the more obnoxious and more liberal of the two, and many conservatives want him challenged. One online campaign that may bear fruit is encouraging CNBC host Larry Kudlow to challenge Schumer. Kudlow would be a fantastic candidate, because he is a respected economist who is conservative, well-versed, well-known and trusted (not to mention articulate and clean).

But the Schumer seat seems like the wrong contest to waste a candidate of Kudlow’s appeal. Kudlow and New York Republicans should borrow a strategy from high school and college tennis teams: move your top player from “first singles” down to a lower match, where you have a better chance of winning, sacrificing a lesser player to play the other team’s top player in first singles. Then instead of losing both matches, you lose one by a bigger margin but have a better shot at winning the other. Margin doesn’t matter; the difference between 0-2 and 1-1 matters a lot.

Kudlow should take on the vulnerable Gillibrand and leave the more hated Schumer to a long-shot challenger. No, beating the slightly more moderate Gillibrand won’t be as much fun as doing the same to Schumer, but risking losing both seats (and perhaps missing the golden opportunity to take control of the Senate) would be even less fun.

New York is a tough blue state for Republicans, much more expensive to win than Massachusetts. Get smart, New York Republicans. Take your best shot at the lower hanging fruit.