Wednesday, May 10, 2017

Deceptive language about Health-Care Provision

The House of Representatives has just passed a statute it represents as “repealing and replacing Obamacare.” This legislation, now awaiting what promises to be major challenges in gaining the Senate’s approval, does amend certain aspects of the Obamacare setup, but all in all the changes are less than earth-shaking, and the previous system will continue in important regards even if the House version should gain approval in the Senate.

One critical aspect of the continuity is the requirement that, absent certain state-level options that might but need not be implemented, health-care insurers will still be forbidden to deny coverage to anyone because of a preexisting condition.

Under Obamacare, insurers had to charge people the same amount, regardless of their health status. The AHCA [American Health Care Act] would change that, allowing states to apply for waivers to charge sicker people more if those people had a gap in their insurance coverage. Those states would then get $138 billion over 10 years to help defray costs for sick people by creating high-risk pools, among other things.

The idea behind this provision is that it would make health insurance cheaper for people who are relatively healthy, while sick people would be in their own, subsidized risk pool. As they debated on the House floor Thursday, Republican members consistently assured their audience that their bill would still protect preexisting conditions.

As many knowledgeable commentators have noted over the years, forbidding insurers to discriminate among people according to their health condition (e.g., according to what types of illnesses, injuries, and risk factors they have had in the past or have currently) flies in the face of the insurance principle. Insurance is a means of pooling risks. Subscribers of an insurance policy all pay a regular premium for coverage. In the event that a subscriber happens to fall victim to a covered contingency—for example, someone develops lung cancer—that person will be eligible to make a benefit claim against the insurance to pay for care of the cancer. Such coverage can be actuarially sound because even though any one person’s coming down with lung cancer is unpredictable, the probability of someone’s coming down with this disease in a large population can be determined with a high degree of accuracy, and premiums can be set so that for the group as a whole, the premiums will suffice to cover the plan’s promised pay-outs and leave enough for the insurer to cover its costs and earn a normal return on its investment in the insurance business.

If, however, people who had not been insured could, upon being diagnosed with a particular disease, then apply for insurance covering treatment of this condition, the insurance principle would be cast into the trash bin. This feature would be similar to letting people on their death bed purchase life insurance at the same rate as healthy people, or letting people whose houses had just caught fire purchase homeowner’s insurance at the same rate as people whose houses are in sound condition. In short, requiring insurers to cover preexisting conditions at the same premium paid by covered subscribers who do not have those conditions transforms insurance into an arrangement for making healthy people pay too much for coverage in order to subsidize people who pay too little—because the law forbids insurers to charge them according to the risk of the covered contingency they actually present.

Likewise, requiring insurers to cover a wide range of conditions against which some subscribers do not wish to insure—indeed, against certain contingencies that cannot apply to them in any event (e.g., costs associated with pregnancy for male subscribers)—turns the insurance system into a complex system of overcharges and cross-subsidies, that is, turns the system into a legally prescribed welfare system rather than an insurance system.

The federal government and the state governments have intervened haphazardly in the health-care insurance business so pervasively and for so long that by now the whole setup is nothing but a gigantic mess that flies in the face of the insurance principle and dictates a host of requirements that make no sense except as answers to the prayers of special-interest groups and rent seekers. Once a net benefit has been created, however, each beneficiary group will scream to the heavens if reforms should threaten to remove its privilege, and legislators will be reluctant to buck such organized political insistence on continued subsidies and privileges no matter how irrational these interventionist distortions are as components of an insurance system. This sort of “transitional-gains trap,” which Gordon Tullock analyzed astutely in an article published almost fifty years ago, produces an inertia in the political process that makes it practically impossible to make substantial changes even as the overall system sinks into financial ruin and drags down much of the related economy with it.

A helpful first step toward actually remedying the whole ungodly mess would be to change the language we use to talk about it and to propose reforms. People would be well advised to stop using the word “insurance” to talk about what amounts to prepaid care for one and all, and to stop regarding every special-interest subsidy and privilege as if, having once been blessed by legislators, it has become an eternal “right.” If people cannot forthrightly recognize gifts financed from the public trough as distinct from real insurance payouts, there is little chance that any reforms can ever make economic sense or bring about a viable system for financing health-care expenses.



Are You Ready for Single-payer Healthcare?

America is well down a slippery slope

Chalk up another victory for the elephants and one more defeat for the donkeys. Yep, the Republicans have finally managed to get a healthcare bill through the House, and depending upon who you listen to, the bill is anything from a complete Republican sellout to a major move in the direction of freedom and fiscal responsibility.

That said, let’s take a deep breath and set aside all the B.S. and talking points coming from politicians and the media and look at the healthcare puzzle like rational, grown-up folks. The fact is that we’ve had government-controlled healthcare from the time progressives first convinced a significant percentage of the population that the government had an obligation to provide medical services to all citizens. Today, of course, that belief has evolved to mean “all people living in the United States, citizens or otherwise.”

It sounds nice, but as every halfway intelligent, honest adult understands, healthcare is not a right. Every human being is born with only one natural right: the right to freedom. Specifically, that means the right to do whatever he pleases, so long as his actions do not violate the freedom of any other human being.

The right to life, liberty, and the pursuit of happiness contains two redundancies. First, technically speaking, you don’t have a right to life. If you did, you could choose to live forever. Good luck to you on your choice, but the reality is that a higher power decides the outcome of that one for you. You do, however, have a right to do anything you please to try to improve your life, which comes under the heading of freedom (or liberty, which is the word used by the Founding Fathers).

Second, the right to happiness is simply one aspect of freedom. You do not have a right to be happy, but you do have a right to pursue happiness (as in life, liberty, and the pursuit of happiness). The problems start when people come to believe the perverse notion that government (read, “taxpayers”) has an obligation to do whatever it takes to make them happy. Once a society crosses that line, it begins its death spiral, though it can still survive, in the words of Margaret Thatcher, until you “run out of other people’s money.”

Now, back to healthcare. In this day and age of ever-increasing lifespans, healthcare is an issue of life-and-death importance. But it’s important to understand that it has nothing to do with rights. It has to do with compassion.

This may surprise you, but, in theory, I believe in universal, or single-payer, healthcare. That’s right, if I had supernatural powers, I’d see to it that everyone, young and old alike, had access to the best healthcare possible, without having to wait weeks, or even months, to see a doctor or have an operation.

The reason I qualified my statement with “in theory” is because even though I don’t want to see any human being suffer unnecessarily or die from a lack of medical care, I also don’t want the government to be involved in any way, shape, or form in anything as serious as healthcare.

It baffles me why so many people blind themselves to the truth about government. A government is nothing more than a collection of avaricious, power- and money-hungry men and women whom we refer to as “politicians,” and we already know, through firsthand experience, that they not only are untrustworthy, they’re incompetent.

The theoretical single-payer system I envision would be run by experienced, private-industry executives and overseen by a board of directors that would consist of the most prominent accomplished, civic-minded people among us, men and women whose reputations would be beyond reproach. They would get no compensation other than reimbursement for travel and other direct expenses, so you would never need to worry about them basing their decisions on their financial well-being.

Now, back to reality: Do I believe this will ever happen? No, I don’t. The sad reality is that the United States will get single-payer healthcare in the not-too-distant future, but, unfortunately, it will be run by the same avaricious politicians who have been stealing from us since the inception of our nation.

Based on experience, we already know that everything the government touches costs more and delivers less value. Amtrak has always operated in the red. The Post Office has always operated in the red. And politicians don’t even make a pretense of wanting to adopt a breakeven budget for the United States.

Isn’t it ironic that Medicare and Medicaid are going broke (not to mention the transfer-of-wealth program known as Obamacare), yet the government arrogantly believes it can run healthcare for everyone successfully? Absurd, of course, but nevertheless government-run healthcare is on the horizon.

Obama and the rest of the Dirty Dems were well aware that the only way Obamacare could be pushed through was by telling massive lies to the public. Their strategy was that when the system collapsed, they would then make the case that the only way to save people from suffering and death would be to implement a full-blown, single-payer system run by the government. A deceitful plan, to be sure, but a very clever one.

And it was all moving along right on schedule toward its ultimate goal when Chappaqua’s most famous liar found a way to blow the presidential election and Obama’s third term against an opponent whom her supporters looked upon as nothing more than a bad joke. Whereupon the guy pulling her strings hightailed it out of town to Tahiti and began cashing in on the eight-year scam he had so successfully pulled off.

I’d like to be wrong and see the Republicans come up with a miracle and find a way to make healthcare work, but my guess is that Horrible Hillary’s gift to Republicans will only prolong the inevitable: government-run, single payer healthcare.

The irony is that the most famous government-run healthcare debacle, the VA, has been such a disaster that there’s serious talk of turning it over to the free market. I guess the message is that you have to suffer through years of government incompetency before you’re given the freedom to try and better your situation.

P.S. Allow me to close on an obvious note: Given the insoluble healthcare problems in the United States, I believe immigration (not just illegal, but legal) should be cut as close to zero as possible for at least five years. The fact is that there are simply too many people in this country, which puts a strain on all kinds of services. If we can’t afford healthcare for those already living here, why in the world should we add to the problem by bringing in even more people?

All answers to that question are welcomed.



For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH,  POLITICAL CORRECTNESS WATCH, AUSTRALIAN POLITICS, and Paralipomena (Occasionally updated),  a Coral reef compendium and an IQ compendium. (Both updated as news items come in).  GUN WATCH is now mainly put together by Dean Weingarten. I also put up occasional updates on my Personal blog and each day I gather together my most substantial current writings on THE PSYCHOLOGIST.

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