Sep 21 2010

Obamacare Starts Delivering – A Mess

Not everyone works hard and makes the right choices through life to support themselves and their families. Not everyone lives within their means and therefore can make it through the lean times as well as the good ones. But those who do so are not evil, and they surely do not have a debt they owe to society for surviving or succeeding. It would seem those who need help correcting their mistakes are the ones who should be indebted for any assistance they receive to get them back on their feet. Help in these cases is not an entitlement or a right – but a gift.

I don’t see the far left ever breaking the code on this one, and so we get government intervention and control, instead of personal intervention and self control.

A brief aside here: You know it always is ironic to me how those who support the Science of Evolution are the ones so resistant to letting events and individual choices and decisions drive society. It seems evolution (or the free market) is not good for humanity, therefore it must be controlled by government. Then you have those who shun the idea of evolutionary forces and science, but who turn out to be the ones who most strongly advocate the role of the free market and individual decisions in society. Maybe it has to do with the fact one group tends to bow down to the almighty government, and the other tends to recognize the almighty creator?? Just some food for thought.

Anyway, back to the topic of this post. The liberal Democrat Leaders in Congress claimed we would have to wait until Obamacare started being put in place before we would know all the impacts and ramifications. Just like idiotic price controls on gas, the Obamacare approach is to offer infinite services while controlling what the market is allowed to charge. It is a well documented recipe for disaster. Here is how history adjudicated the Democrats’ and Carter’s liberal failures on energy in the 1970’s:

The US government imposed price controls on gasoline and oil following the announcement [of OPEC reductions in oil production], which had the effect of causing shortages and long lines for gasoline. The lines were quelled through the lifting of price controls on gasoline, although oil controls remained until Reagan’s presidency. Significant government borrowing helped keep interest rates high relative to inflation.[citation needed] Carter told Americans that the energy crisis was “a clear and present danger to our nation” and “the moral equivalent of war” and drew out a plan he thought would address it. Carter said that world oil supply would probably only be able to keep up with Americans’ demand for six to eight more years.

Sounds eerily familiar, with all that deficit spending. In fact, government price controls on oil and gas produced such horrible results, the events of this time are considered in this wikipedia entry to be the classic example of what happens when government (not the market) dictates prices for goods and services:

A classic example of how price controls cause shortages was during the Arab oil embargo between October 19, 1973 and March 17, 1974. Long lines of cars and trucks quickly appeared at retail gas stations in the U.S. and some stations closed because of a shortage of fuel at the low price set by the U.S. Cost of Living Council. The fixed price was below what the market would otherwise bear and, as a result, the inventory disappeared. It made no difference whether prices were voluntarily or involuntarily posted below the market clearing price. Scarcity resulted in either case. Price controls fail to achieve their proximate aim, which is to reduce prices paid by retail consumers, but such controls do manage to reduce supply. When price controls on gasoline were lifted, the shortage ended and the long lines of cars at gas pumps disappeared.

Those who ignore history are sentenced to repeat its mistakes. Liberals are incapable of grasping the idea that humanity can lead itself into the future, and it is better to let the dynamic forces of individual choices find its way forward than to have a bunch of over-sized egos attempt to think for everyone else.

Thus we come to the first brown and dead shoots of Obamacare, arising from the scorched-earth legislation:

Some of the country’s most prominent health insurance companies have decided to stop offering new child-only plans, rather than comply with rules in the new health-care law that will require such plans to start accepting children with preexisting medical conditions after Sept. 23.

Three insurers – WellPoint, Cigna and CoventryOne – all cited uncertainty in the health insurance market for their decisions. That incertitude and the resulting decision of other insurers to drop their child-only plans, according to WellPoint spokeswoman Kristin Binns, “has created an unlevel competitive environment.”

Emphasis mine. The law of unexplored consequences at work again. Of course companies will be looking for ways to compete on price and services. But they have to do it in a way that minimizes or neutralizes cost risks – or else they will go out of business if they offer something that turns into out-of-control costs. That means offering less flexibility overall, because the people most likely to rush to the new plans are the most expensive to cover:

Robert Zirkelbach, a spokesman for AHIP, noted that insurers will be accepting children with preexisting conditions in other types of plans.

But, he said, extending such coverage in child-only policies “provides a very powerful incentive for a parent to wait until their child becomes very sick before purchasing coverage.”

Zirkelbach added that in 2014, when similar protections kick in for all individuals with preexisting conditions, virtually all Americans will be required to get health insurance.

The companies are correct, they cannot shoulder these kind of unfunded mandates, where a family will only pay for the sick child and avoid premiums for the larger, possibly healthy family members. There has to be a pool of healthy insured people to cover the costs of the few in dire need – or else it does not work. This is a reasonable approach to meeting the law sanely.

The results of Obamacare are starting to show up already in many ways. Health care is becoming too risky to invest a life-long career in and the numbers of doctors and nurses and health service experts is starting to shrink. The demand is starting to outstrip the capacity – especially for the Medicare/Medicaid patients whose costs are not covered by the government payments (Uncle Sam is quite cheap in this matter). Insurers are raising premiums to cover the unfunded mandates, making it even harder for companies and families to whether the Obama-extended recession. It was the worst idea at the worst of times.

The payments those of us who knew how to take care of ourselves were making to private companies, without Uncle Sam’s help, where worth the services we received. Not perfect, but it covered what we needed in most cases. In fact, the only time it did not work was when premiums spiked due to long term, pre-existing and expensive conditions. A cost the individual had to cover. This was painful, but acceptable for decades, until the government stepped in and made health care a social issue instead of a private sector service.

The only way to fix Obamacare’s destruction of the world’s best health care system is to repeal it ASAP. Otherwise the people who bring you the Post Office and DMV will be rationing your prescriptions and benefits to cover people whose life choices left them incapable of supporting themselves or their families. It is time to reinstate individual freedoms and responsibilities – and we can begin with taking back our health care choices from DC.

Update: Ed Morrissey also showcases this story at Hot Air, with additional links and commentary.

4 responses so far

4 Responses to “Obamacare Starts Delivering – A Mess”

  1. Toes192 says:

    Heh… I remember that oil embargo… The Sinclair (gas) station out on E. Colfax & I70 never ran out of gas… and … I bought about 10…
    (5 gallon) cans of gas and kept them in the garage…
    .
    Called “hoarding” I think … That’s what people do in the face of any kind of shortages… All I was out in the end was the cost of a few gas cans …

  2. […] Oren at three DC area synagogues. (Here is the printer-friendly version.) Oren more… Obamacare Starts Delivering โ€“ A Mess – strata-sphere.com 09/21/2010 Not everyone works hard and makes the right choices through […]

  3. Wilbur Post says:

    Maybe Comrade Waxman could hold another hearing like he did when a bunch of corporations began anouncing the expected earnings hits due to ObamaCare. It would give the little dictator a chance to preen before the TV cameras again (drool!) BTW, do you know why these stupid show trials are called “hearings”? Because that’s what all the people called to testify end up spending all of their time doing.

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