When The Whole Country Is On Welfare
Holman Jenkins asks the right question in the WSJ: "Now, can we have health care reform?"
(WellPoint CEO Angela Bray) was recently hauled before Congress to justify her company's proposed 39% rate hike in California. She explained the source was two-fold: rising medical costs and healthier customers dropping their coverage, forcing the sick to pick up the tab.Now this sounds like two problems, but for WellPoint and other insurers it's really only one problem. Once everyone is required by government mandate to buy insurance, the industry's survival is no longer threatened: It can just pass its skyrocketing costs along to customers. Once customers can no longer refuse to buy the industry's product, the problem of costs won't be fixed, but it no longer is the insurance industry's problem.
There, in that one sentence, we give you the failure of ObamaCare, the failure of the congressional health-care debate, the failure of health-care politics in this country.
...Under the law just signed, employers have even more incentive than they did yesterday to lavish excessive health insurance on their high-end employees. They have less incentive to cover low-end workers, or even hire them.
For the young, healthy or anyone not stumbling into a giant tax handout, buying insurance at the inflated prices available in the marketplace would be an even crazier financial decision today than it was yesterday--because now you can wait and buy it when you're sick.
For insurers, the check is in the mail: So watered down is the individual mandate that it must accelerate the industry's death spiral if not for the massive subsidies the government now has obliged itself to provide to keep the industry afloat and allow insurers to continue scalping their 15% off the top for serving as gatekeeper to a tax loophole.
When all is said and done, with unerring accuracy, ObamaCare has ended up doubling down on the system's existing perversities. The one thing it doesn't do (though it would be perfectly consistent with the Democratic goal of universal access) is incentivize a health-care marketplace based on competition in price and quality.
ObozoCare: one giant public-private partnership between government scum and corporate scum.
mpetrie98 at March 25, 2010 1:46 AM
The correct answer to Congress would have been:
"I'm running a company here, and it's really none of your business."
Why does Congress think it has the right to demand explanations of ordinary business decisions? Like the alleged Toyota accelerator problems - they have neither the competence nor the authority to be involved.
bradley13 at March 25, 2010 4:21 AM
This is how we will arrive at government single-payer. Employers have financial incentives to drop the bulk of their employees from health insurance, since penalties for not offering coverage are much less than health insurance premiums. Insurance companies will raise rates through the roof without competitiion, and then Obama (or whoever his proxy is at the time) will double down on the demonization of the insurers. The government will then offer single-payer as the solution, and at that point the lemmings will be all too eager to go along with it. Voila -- Medicare bankruptcy times 10. Watch it happen in the next few years.
cpabroker at March 25, 2010 4:32 AM
The government created this mess in WWII with their wage controls. They've been fixing it my entire lifetime. This time, they'll get it right, right?
When an entity with the power to tax can't even balance a budget, you know that the most simple things are beyond their abilities. I'm surprised we can find so many people oblivious to their own incompetence on the planet, much less in one country.
MarkD at March 25, 2010 6:14 AM
bradley13 writes: "Why does Congress think it has the right to demand explanations of ordinary business decisions? "
I just read something expanding on that thought yesterday, about how intrusive government emerges from a supposed public good. We started out with a "public accommodations" theory, for the purpose of ending segregation. From there, we now have the federal government routinely intervening in every aspect of running a business -- something that was totally unforeseen by the Founders. If Obamacare isn't repealed, it's inevitable that the federal government will routinely intervene in every aspect of medicine and health.
Cousin Dave at March 25, 2010 7:36 AM
The thing that kills me is that if my company does drop my health care (forcing me to the public option) you know damn well they're not going to increase my salary to make up for it. GRRRRRR.
Ann at March 25, 2010 7:51 AM
I heard on the radio (yet to be personally confirmed) but there is an exemption for the penalty tax on this bill for one group of people- illegal immigrants.
Ain't that dandy. So, where's Patrick? Seeing his fellow citizens hauled off or FINED for not purchasing insurance is okay with him....even if the majority of those stealing medical services are illegals, and not required to pay the FINE?
When you gonna start applying to the IRS?
Feebie at March 25, 2010 9:13 AM
Feebie, I had not heard that... if I'm remembering all this right, the original House bill had a provision making illegals ineligible for the program, but the Senate version took that out. Maybe that's what you heard. Of course, in a few more months it won't matter, since Obama and Pelosi and Reid are going to ram through an amnesty bill this summer.
Cousin Dave at March 25, 2010 11:51 AM
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