It Appears Obamacare was Designed to Fail so they could give us a Single-Payer System

Posted by PITHOCRATES - March 23rd, 2014

Week in Review

The Democrats have longed for national health care.  Because if the government controls health care they control one-sixth of the U.S. economy.  Which means one-sixth of the U.S. economy would flow through Washington.  That’s a lot of money.  And a lot of that can flow into politicians’ pockets.  Allowing them to spend more than they ever had before.  And the best thing about it is that once they get control of it they can scare the people into raising taxes.  “Unless the people tell their Congress members to raise tax rates we will have to make cuts in the national health care budget.  Which means some people won’t get the tests they need.  The treatment they need.  Or the surgery they need.”  Imagine the fear that’ll put into the American people.

So when President Clinton entered office his administration tried to give us national health care.  Hillarycare.  But the people said in no uncertain terms that they didn’t want national health care.  By voting Republicans in everywhere during the 1994 midterm election.  That was the end of Hillarycare.  And President Clinton moved to the center.  While the Democrats noted that if they were going to pass national health care into law they would have to be devious.  Which is what Obamacare apparently is.  A devious plan to get us to a single-payer system against our will (see Why Is the ObamaCare Mandate So Toothless? posted 3/19/2014 on Investors).

Health Care: Some think Democrats designed ObamaCare to fail so they could get to a single payer system. Seems a bit extreme. But it does help explain why they made the individual mandate so easy to avoid…

In fact, of the 30 million uninsured expected in 2016, 19 million will be exempt from the individual mandate, according to the Congressional Budget Office…

On top of this, ObamaCare includes various “hardship exemptions” — some of which appear to be so laughably easy to qualify for that it’ll be a shock if any uninsured pay the tax penalty…

The form even encourages people who “aren’t sure” to “ask for an exemption…”

What’s more, those who don’t qualify for an exemption could avoid the penalty simply by not paying it. Democrats specifically barred the IRS from charging civil and criminal penalties, imposing liens or seizing assets and bank accounts to collect unpaid ObamaCare penalties. It can take it only from a tax refund…

This leaves the question of why Democrats would make a key pillar of the ObamaCare structure so incredibly weak.

Were they worried about the political consequences of making the unpopular mandate too strict, not realizing it would undermine their reform? Or did they know that an ineffective mandate would ultimately wreck ObamaCare, hoping its demise would push the country toward a single payer system?

In other words, were Democrats dangerously incompetent or unbelievably cynical? Neither is a particularly good defense, but each underscores the need to scrap ObamaCare entirely and start over.

The health insurers were all for Obamacare.  At first.  Mandatory health insurance?  Cha-ching.  Easy money.  The government forcing people to buy their policies?  It’s like they died and went to insurance heaven.  But government is full of devious bastards.  The health insurers let their greed cloud that fact.  And now they may pay the ultimate price.  For with all of these mandate exceptions the young and healthy aren’t buying health insurance they won’t use.  Only sick people who will use that health insurance are buying it.  So the health insurers have far too much going out in claims and far too few premiums coming in.  Which won’t help a health insurer stay in business.  But, then again, that may have been the plan all along.

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Insurance Pools, Premiums and Obamacare

Posted by PITHOCRATES - October 7th, 2013

Economics 101

For Health Insurance to work More People need to Pay Into the Pool than Collect from the Pool

It’s here.  Obamacare.  Which promises to give more people health insurance.  With health insurance policies paying for more than policies do now.  More tests.  More procedures.  Even birth control.  Obamacare will also provide coverage for people with preexisting conditions.  Remove caps on benefits and forbid insurance companies from cancelling insurance coverage.  Forcing insurance companies to give policy holders a lot more benefits.  All while reducing insurance premiums.  Which seems to defy common sense.  Getting more while paying less.  To better understand this let’s look at a sample insurance pool.

Obamacare Impact on Insurance Premiums - Before

Insurance pools are larger than 10 policy holders but this will suffice for this example.  In this example there are 5 individual policy holders with a monthly insurance premium averaging $118.  There are 4 family policies with a monthly insurance premium averaging $400.  And one policy holder with a chronic health condition who pays a premium that people with preexisting conditions pay.  In this example paying $1,200 a month.  It’s that high because this person requires medical care in excess of $30,000 each year.  The average of all premiums is $339.

Now, this is how insurance works.  There is a pool.  People in the pool each pay a small premium compared to the medical costs they MIGHT incur.  The word ‘MIGHT’ is key here.  For insurance to work more people need to pay into the pool than collect from the pool.  This allows the pool to pay the few who have a large unexpected medical expense.  If the insurance company’s actuaries get their premiums right the total of premiums paid into the pool approximately equals the total of expenses paid by the pool.  So premiums in basically equal payments out.  Premiums in can exceed payments out.  But payments out cannot exceed premiums in or else the insurance company will go bankrupt.

Obamacare will Increase the Price of Health Insurance for Men because Insurers can’t Charge more for Women

Obamacare’s individual mandate is an attempt to make sure premiums in exceed payments out.  By forcing more young and healthy people who will not use health insurance pay into the pool.  Young and healthy, see, is the key.  Because that’s money they can spend on other people.  So the young and healthy are the answer to the high cost of the old and sick.  So Obamacare, then, is basically a cost transfer from the old and sick to the young and healthy.  And it will work to lower the cost of health insurance.  If the young and healthy buy health insurance and never use it.

Obamacare Impact on Insurance Premiums - Adding Young and Healthy

If we add 12 young and healthy people to the pool who will not use the insurance the premiums become more affordable.  When there were only 10 people in the pool the total premiums added up to $3,390.  By adding these 12 young and healthy to the pool the total premiums paid in increases to $4,000.  An increase of 26.3%.  So if we discount all premiums by 26.9% we still get a total of $3,390 paid in.  Which is how Obamacare is supposed to lower the cost of health insurance.  By forcing people who won’t use it to buy it.  So they can pay for the people who do use it.  Thus lowering the average premium to $154.09.  And bringing down the premiums for single, family and preexisting conditions to $78.03, $294.78 and $884.35, respectively.  Lowering price across the board.  Making everyone happy.  Except, of course, those forced to buy something they won’t use.  So this part can lower insurance costs.  But it won’t.  Because Obamacare complicates things.

Obamacare Impact on Insurance Premiums - Adding Coverage Requirements

Obamacare will raise premiums because it requires insurers to cover more.  In addition to the things already noted there are some other costly requirements.  Such as the ban on price discrimination based on sex.  Meaning insurers can no longer charge women more for health insurance.  Even though women are more costly to insure.  Primarily due to their reproductive systems.  And other biological differences.  If they can’t charge more for women then they must charge women what they charge men.  And to cover the higher costs of insuring women they must charge men a higher premium.  So when they charge women that premium it will cover birth control, breast exams, pap smears, etc.   In our example we assume singles and families will pay twice as much.  While those paying preexisting conditions premiums will pay 50% more.  Bringing the average premium to $288.08.  While bringing the premiums for single, family and preexisting conditions to $156.06, $589.57 and $1,326.52, respectively.

The Key to Obamacare is to get more Young and Healthy People to buy Insurance that they will Not Use

But premiums will cost even more.  Because insurers cannot deny coverage for people with preexisting conditions.  And they can’t cancel coverage for people if they come down with a very costly chronic health problem.  Basically meaning there is no cap to what an insurer may pay on an individual.  Which makes the insurance equation more difficult to balance.  Making sure that payments out do not exceed premiums in.  Which is more difficult to do when there is no limit to what those payments out can be.  So insurers will have little choice but to charge people for the worst case scenario.  That a large percentage in the pool will have long-term chronic illnesses.  And that some people will be buying insurance for the first time after being diagnosed with a long-term chronic illness.

Obamacare Impact on Insurance Premiums - Pre-Existing Conditions

Insurers will have to make assumptions.  With no limit to their high-end exposure they will have to charge everyone more across the board.  So they will have to take their greatest risk—the exposure to preexisting conditions and long-term chronic illnesses—and factor that into all premiums.  In our example we charged singles 25% of the greatest risk.  And we charged families 50% of the greatest risk (the more people on the policy the greater the risk of long-term chronic illnesses on that policy).  Raising the average premium to $437.  And raising the premiums for single, family and preexisting conditions to $331.63, $663.26 and $1,326.52, respectively.  Or an increase of 181%, 66% and 11%, respectively from before the implementation of Obamacare.

Obamacare seems like a windfall to the insurance companies.  Which is why some of them supported Obamacare.  But the key to Obamacare was to get more young and healthy people to pay into the insurance pool while not using that insurance.  The young and the healthy.  Individuals.  Who don’t have families.  Those who will see a substantial rise in their insurance premiums.  As much as 181%?  Perhaps.  But if the increase is too great for these young and healthy individuals to afford they will not buy health insurance.  And they can’t get a subsidy.  Because it’s the young and healthy—those who are supposed to pay into the insurance pool without using their insurance—who are to provide the money for the subsidies.  So they won’t increase the amount of premiums going into the pool.  While the additional requirements of Obamacare will increase the payments going out of the pool.  Causing the insurance equation to go out of balance.  Putting the private health insurance business out of business.  The ultimate goal of Obamacare.  So the left can get what they wanted all along.  National health care.

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Subjective Bipartisanship—2000 Election, Citizens United and Obamacare

Posted by PITHOCRATES - September 26th, 2013

Politics 101

Democrats are like Petulant Children whenever they don’t Get their Way

Bipartisanship is a funny thing.  Subjective.  The Democrats are always demanding that the Republicans be bipartisan.  And stop being such extreme ideologues.  For after all they won the election.  And the Republicans lost.  So the Republicans should just give in and give the Democrats whatever they want.  And shut their pie holes.

The Democrats say the Republicans should cede defeat.  And quit fighting them.  Just like the Democrats do.  When they lose an election or a Supreme Court decisions they just go on their way, whistling a happy tune.  When Al Gore lost to George W. Bush in 2000 the Democrats said, “Gee whiz we sure wanted to win.  But, oh well, the Republicans just made a better case to the American people.  It’s obvious that the people want them.  Not us.  So congratulations, President Bush.  And Godspeed.  We look forward to working with you to give you whatever you want.  For after all, you won the election.”

You probably don’t remember that.  And for a good reason.  It never happened.  Because the Democrats are like petulant children whenever they don’t get their way.  Just look at them now.  The people who are supposed to be so tolerant are calling the Republicans terrorists, anarchists, fanatics, extremists, etc.  Saying things like they’re holding the American people hostage.  For ransom.  That they have a target on the middle class.  The kind of hate speech they say is responsible for gun crime.  The kind of speech they blamed the Tucson shooting on.  Even the mainstream media apologized for using a gun metaphor on air.  When it was all the rage to frown on that kind of speech.  But when it comes to attacking the Republicans the Democrats unload double-barrel shots of it.

Chief Justice Roberts changed the Individual Mandate in Obamacare to a Tax

Obamacare passed purely on partisan lines.  It was NOT bipartisan.  Only Democrats voted for it.  When they had control of the House, the Senate and the White House.  But even then they had to bribe some Democrats to vote for it because they knew their constituents were against it.  There was the Louisiana Purchase.  And the Cornhusker Kickback.  And they were right to be reluctant about voting for Obamacare.  For some lost their jobs because of it.  And the Democrats lost control of the House of Representatives.

The Republicans continue to oppose Obamacare.  As do the people.  As polls show the majority doesn’t want it. Then came the Supreme Court decision.  And Chief Justice Roberts.  Who said the individual mandate (the government forcing the people to buy something for the first time in U.S. history) was, in fact, a tax.  Despite President Obama and the Democrats insisting that it wasn’t a tax.  Because people did not want a massive new tax.  So instead of finding Obamacare unconstitutional (which it is) he said the government forcing Americans to buy something for the first time in U.S. history was constitutional because he changed the individual mandate to a tax.

So the Democrats say the Republicans should just drop their opposition to Obamacare.  And they should quit their attempts to defund Obamacare.  For the Supreme Court has settled the matter once and for all.  And the Republicans need to do as the Democrats do.  Respect the Court’s decision.   Just like they respected the Court’s decision to stop the endless recounting of ballots until the Democrats could find enough ballots to count to overturn the outcome of the 2000 presidential election.  And how they respected the Court’s decision in the Citizens United case that said corporations could make political donations just like people.  And unions.  That pours money into Democrat coffers for political action whether the union rank and file wants them to or not.

The Democrats had No Interest in being Bipartisan when George W. Bush was in Office

You probably don’t remember any of this either.  And for good reason.  It never happened.  Because the Democrats are like petulant children whenever they don’t get their way.  President Obama insulted the Supreme Court Justices during a State of the Union address following the Citizens United decision.  Which was unprecedented.  And childish.  They attack this decision to this day.  And vow to overturn it.  For it’s okay for them to disagree with the Supreme Court.  But not the Republicans.

They have attacked George W. Bush with a vengeance.  Called his presidency illegitimate following the 2000 election.  Yet when he won reelection in 2004 they didn’t stop being extreme ideologues.  They didn’t shut their pie holes.  They didn’t start supporting the War on Terror.  They didn’t stop trying to defund the Iraq War.  In fact, they stepped up their attacks on him.  Even though his reelection proved he was legitimate.  They called him an idiot.  A liar.  An embarrassment.  A crazy cowboy.  Late night television belittled him.  And the mainstream media played along.  The Democrats had no interest in being bipartisan when George W. Bush was in office.

The Democrats are petulant children.  When they don’t get their way it’s no holds barred.  As they do everything in their power to derail the opposition’s policies.  But when the Republicans stand firm with the American people in their opposition to Obamacare they are terrorists, anarchists, fanatics, extremists, etc.  For you see, there are two sets of rules.  One for the Democrats.  And one for the Republicans.  It’s a little like that saying about customers.  Rule number 1: The customer is always right.  Rule number 2: When the customer is wrong see rule number one.  Only with the Democrats it’s like this.  Rule number one: The Democrats should be in power and should be allowed to do whatever they want to do.  Rule number 2: When the Republicans are in power see rule number 1.

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Cost-Benefit Analysis and Health Insurance

Posted by PITHOCRATES - August 19th, 2013

Economics 101

We do a Cost-Benefit Analysis before making a Buying Decision

We make decisions everyday comparing costs to benefits.  Any time we go to a store.  Any time we make a buying decision.  We ask ourselves how much are we willing to pay to enjoy the benefit of the thing we’re thinking about buying.

For example, people love boats.  For there is nothing like being on a boat on a beautiful summer’s day.  Especially if you’re a guy.  Because bikini-clad women love sunning themselves on boats.  You could even say that a boat is a magnet for beautiful, bikini-clad women.  But how much are you willing to spend to enjoy that benefit?  Being around beautiful, bikini-clad women?  For owning a boat is very costly.  Especially if you live in a northern clime with a short boating season.

First of all, buying a boat is very costly.  It could determine the size of your house or where you live if you’re making a boat payment.  Then there’s insurance.  Fuel costs.  Transportation costs.  And inconvenience.  Of the time, effort and wear & tear on your vehicle to haul your boat to and from the water.  Or you can spend even more money to dock your boat at a marina.  And dry-store it over the winter.

Young, Healthy People do not buy Health Insurance because it has no Immediate Benefit for the High Cost

It takes a pretty healthy income to enjoy the benefit of boat ownership.  Something business owners can afford.  Because they earn a decent income.  But they earn that income because they put in a lot of hours.  So many that their boat may sit in their yard for most of the summer.  Or in storage.  So while a boat owner continues to pay the costs for the benefits of boat ownership he or she rarely enjoys those benefits.  Especially if they get married.  And the spouse gets seasick.

In an honest cost-benefit analysis few would buy a boat other than a business that needs a boat to do their business.  Like a fishing boat.  Or a harbor tug.  For these people there is a financial benefit that comes from boat ownership.  Income.  Unlike earning enough money to be able to afford a boat these people use their boat to provide an income.  Making the cost-benefit analysis completely different.  Instead of rationalizing the value of having fun they look at the revenue their boat will be able to provide.  And if it’s greater than the costs of owning that boat they will go ahead and buy that boat.

Sometimes we make these decisions based on impulse or desire instead of objective analysis.  Buying a more costly car when a less costly one would do.  But there are times when some go too far in the other direction.  Deciding not to buy something because they can’t see or enjoy the benefit.  Such as car insurance.  Or health insurance.  Things that have no benefit unless something bad happens.  And a lot of those going happily through life see no reason to spend a lot of money for something that brings them nothing good now.

Obamacare and the Individual Mandate make Generational Theft Law

This is why health insurance is so expensive.  Because FDR broke the health care system.  At least, the money-side of it.  When the FDR administration put in wage caps General Motors started offering a health insurance benefit.  This got around FDR’s wage cap and allowed them to offer more to the best workers to get them to come and work at General Motors.  And ever since we looked at health insurance as an employer benefit now instead of another cost in our everyday life.  Like food and housing.

After this our employment decisions changed.  People chose a job not based on what they would enjoy doing in life but by the size of their health care benefit.  The owner-provided health insurance.  At first the sky was the limit.  Because the U.S. automotive industry could charge whatever they wanted for a car.  And the price of cars began to climb to cover those very generous benefit packages.  Undoing what Henry Ford had done.  As the benefits pushed the cost of a car higher and higher it soon was not available to the average working man.  As they could only be afforded by the upper middle class and above.  Until competition entered and provided a lower-cost car that the less wealthy could afford.  As the U.S. automotive industry lost market share their sales declined.  So a smaller revenue had to pay for a growing number of pension and health care expenses of retired GM workers agreed to during the glory years.  Who were living longer into retirement than originally assumed.  And consuming a lot of medical services in those later years.  All paid for by the health insurance companies.  Causing health insurance costs to soar.

Young people are healthy people.  They rarely go to the doctor.  So when it comes to buying very expensive health insurance (to pay for the older generation consuming the bulk of health care services) they choose not to.  Because of an objective cost-benefit analysis.  Young, healthy people, today, are getting little benefit from paying an enormous amount of money for a health insurance policy.  Their parent’s generation (or their grandparent’s) is getting the benefit.  So they make a rational decision and NOT buy health insurance.  Which raises the cost of health insurance for those who do.  For today health insurance is not insurance.  It’s generational theft.  Stealing from the young to pay for the old because of FDR’s decision that made health care an employee benefit.  And an aging population makes it worse.  Enter Obamacare and the individual mandate.  Which made this generational theft law.  Forcing the young to pay for the old against their will.  Leaving little for them on their meager incomes to support or start a family of their own.  Preventing them from buying a new car.  While the thought of owning a boat is now a distant dream.

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Obamacare will Bring the IRS into our Lives like Never Before

Posted by PITHOCRATES - July 14th, 2012

Week in Review

You wanted free health care?  You think you got free health care?  Think again (see Constitutionality of Healthcare Law Is Still in Question by Nina Owcharenko posted 7/10/2012 on U.S. News and World Report).

Not only is the IRS expected to enforce the employer mandate, it must also make a complex tax calculation including household incomes for each employee, and collect the individual mandate tax (based on each month a person is uninsured or otherwise fails to satisfy the HHS guidelines for coverage). At a time when lawmakers on both sides are advocating for making the tax code simpler, these provisions only make the code more complicated.

Health care isn’t free.  Obamacare just changes who pays for it.  Either by forcing people to buy health insurance policies.  Using the IRS to delve deep into the personal lives of everyone living in your household to see if you have health care.  If you or the other people in your household can afford your health care.  And if you or someone else in your household can afford it but didn’t buy it for you look out.  You will be paying the penalty.  If you can’t afford it then the government will force someone else to pay for it.  Really little different than the way things are now when you go to the emergency room without insurance.  The only difference being the IRS colonoscopy.  And that part about the federal government forcing you to buy something.

So what’s the incentive here?  To show you and everyone living in your household cannot afford to buy a health insurance policy.  That way you get around the federal government forcing you to buy something.  And all you have to endure is the IRS colonoscopy.  Which shouldn’t be too painful if you don’t work and only live on the kindness of government benefits.

Of course this may be the calculated plan all along.  When you factor in a lot of small business planning to drop their health insurance and pay the fine instead because it’s less costly you have a noticeable trend.  A decline in people buying private health insurance policies.  While the private health insurers have to pay more benefits (such as covering preexisting conditions for someone who never owned a health insurance policy before).  While they collect fewer premium dollars to pay for those benefits.  So what must they do?  Raise their premiums on the few people remaining who are still buying their policies.  Thus encouraging more people to drop their insurance coverage.  Because the penalty will be less costly.

Of course this can lead to but one end.  The end of private health insurance.  Forcing the government to do what they wanted to do all along with Obamacare.  Transform it into a full-blown, tax-funded national health care service.  Including the high taxes, the long wait-times and the rationing of services common to all national health care systems.  And the death panels.  Where some government bureaucrat decides whether a person is worth spending health care resources on.  And having that bureaucrat telling you “no” will be a rather unpleasant experience.  Even worse than that IRS colonoscopy.

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New Poll shows the Majority of Americans still want Obamacare Repealed

Posted by PITHOCRATES - June 24th, 2012

Week in Review

Americans are giving mixed signals.  First they say they want Obamacare repealed.  And then they say they like parts of Obamacare.  What could possibly explain this (see Most Americans oppose health law but like provisions by Patricia Zengerle posted 6/25/2012 on Reuters UK)?

Fifty-six percent of people are against the healthcare overhaul and 44 percent favor it, according to the online poll conducted from Tuesday through Saturday…

Strong majorities favor most of what is in the law.

A glaring exception to the popular provisions is the “individual mandate,” which requires most U.S. residents to own health insurance.

Sixty-one percent of Americans are against the mandate, the issue at the center of the Republicans’ contention that the law is unconstitutional, while 39 percent favor it…

Support for the provisions of the healthcare law was strong, with a full 82 percent of survey respondents, for example, favoring banning insurance companies from denying coverage to people with pre-existing conditions.

Sixty-one percent are in favor of allowing children to stay on their parents’ insurance until age 26 and 72 percent back requiring companies with more than 50 employees to provide insurance for their employees.

Americans are strongly divided along partisan lines. Among Republicans, 86 percent oppose and 14 percent favor the law and Democrats back it by a 3-to-1 margin, 75 percent to 25 percent, the Reuters/Ipsos poll showed.

But in what could be a key indicator for the presidential contest, people who describe themselves as political independents oppose the law by 73 percent to 27 percent.

Oh, that.  They want all the benefits.  They just don’t want to pay for them.  Some things never change.

You could have guessed the responsible adults, the Republicans, who are always ready to rain on someone’s parade, would be against the law because of its cost and that part about violating the U.S. Constitution.  But what is amazing in this poll is that 73% of independents oppose it as well.  For the independents (and moderates) are more middle-of-the-road people.  So one would expect a split closer to 50-50 than such a large percentage against it.  Then again a lot of these people call themselves fiscally conservative but socially liberal.  So clearly the cost of Obamacare is more important to them than providing free birth control and access to abortion.

It will be interesting to see what the Supreme Court will rule this week.  No doubt they will elate some people.  And devastate others.

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Health Insurers to lose $1 Trillion in Revenue if Supreme Court Says the People can’t become $1 Trillion Poorer

Posted by PITHOCRATES - May 19th, 2012

Week in Review

Oh no.  The health insurance companies will lose money if the Supreme Court rules that Obamacare is unconstitutional.  Those poor health insurance companies.  Here the government is trying to help the people they hate more than anyone else and the Supreme Court has to rain on their parade (see Obamacare repeal would cost insurers $1 trillion by Sarah Kliff posted 5/15/2012 on The Washington Post).

Next month, America’s health insurance plans may lose $1 trillion in revenue…

The figure comes from Bloomberg Government, where number crunchers have taken a look at what happens if the Supreme Court strikes down the Affordable Care Act and its expected expansion of health care coverage to 32 million Americans. They find that, should the Affordable Care Act be found unconstititional [sic], insurance companies will lose $1 trillion in revenue between 2013 and 2020…

The majority of that loss – $880 billion – would be from the 16 million Americans expected to purchase coverage on the individual market…

The Bloomberg Government study estimates that, of the $1 trillion in revenue, health plans would keep $174 billion.

Cost insurers are NOT going to lose $1 trillion in revenue if the Supreme Court rules Obamacare unconstitutional.  This is 2012.  The $1 trillion in revenue is projected between 2013 and 2020.  This revenue doesn’t exist.  And, therefore, can’t be lost.

This projected revenue will be from the individual mandate forcing people to buy health insurance.  So the insurance companies will be $1 trillion richer.  And the American people will be $1 trillion poorer.  This is perhaps the first time someone has felt sorry for the poor health insurance companies suffering at the hands of greedy consumers who are unwilling to buy their products.  So they applaud the poor health insurance companies projected sales as the government forces the American people to enrich the insurance companies.  And feel sad when the mean old Supreme Court says the government can’t force the American people to become poorer so the insurance companies can become richer.

Of course the insurance companies aren’t going to become richer under Obamacare.  They’ll never see that $174 billion in profits.  For insurance companies will be going out of business left and right.  Because Obamacare forces them to pay for preexisting conditions.  An ingenious plan to put the health insurance companies out of business. 

Currently the fine for not buying health insurance is pretty low.  Less than the cost of an insurance policy that covers everything but the kitchen sink.  As mandated by Obamacare.  From birth control to abortion to every kind of preventative screening there is.  Making these policies very, very expensive.  So people will choose to pay the less costly fine.  Until they get very, very sick.  Then they will buy health insurance.  And the insurer will have to pay for every bill that comes in for that preexisting condition.  Because Obamacare forces them to.  Forcing them to raise their premiums.

Of course when they do others will choose to pay the less costly fine instead of the more costly insurance policy.  They will drop their coverage.  Until they become very, very sick.  Meanwhile, the insurance companies will have to raise their premiums because fewer people are paying premiums.  And on and on this vicious cycle goes.  Until the insurance companies have only sick people with policies.  So they’ll spend more on health care bills than they will ever collect in premiums.  Until they go bankrupt.  As designed.  So they can expand Obamacare into a full-blown national health care system like they wanted all along. 

Like I said, ingenious.  As well as devious.

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Obamacare – Lies and Politics to transform One-Sixth of the U.S. Economy into a Welfare Program

Posted by PITHOCRATES - March 11th, 2012

Week in Review

Here’s the skinny on Obamacare.  And it isn’t good.  For it transfers health insurance into a massive welfare program.  That ultimately will be paid for by the state.  Which means we the taxpayers will pay for it with massive new taxes.  After Obamacare shuts down the private health insurance industry.  Which it appears to be designed to do (see Obama’s health care law: A trek, not a sprint by RICARDO ALONSO-ZALDIVAR, Associated Press, posted 3/11/2012 on Yahoo! News).

The Affordable Care Act gradually reorganizes one-sixth of the U.S. economy to cover most of the nation’s 50 million uninsured, while simultaneously trying to restrain costs and prevent disruptions to the majority already with coverage.

If the government takes over one-sixth of the U.S. economy this won’t be the same USA anymore.  It won’t be free market capitalism here.  But a European social democracy.  Like the European nations suffering from the European sovereign debt crisis.  Caused by excessive government spending.  And excessive government borrowing to pay for that spending.  Which will happen under Obamacare.  Because you can’t provide more for less.  More health care will cost more.  And when the private health insurance industry fails when they can’t provide more for less that leaves government as the sole provider in the health care market.  The ultimate plan for Obamacare.  As it has to be.  Because you can’t provide more for less.

“We really haven’t seen the main game,” said Drew Altman, president of the California-based Kaiser Family Foundation, a nonprofit information clearinghouse on the health care system. “The major provisions that will affect the most people and cost the most money don’t go into effect until 2014 or later.”

The timing of Obamacare is further proof that it will be a disaster for health insurers and for those buying health insurance.  If it was good they would have implemented it before the 2012 election.  So Obama could campaign on its successes.  But knowing it was a failure they pushed back implementation until after the 2012 election.  So that failure wouldn’t dash all hopes for an Obama second term.

Millions of people are getting preventive care that now must be provided at no additional cost to patients. Birth control for women soon will be on that list. Insurance premium increases are getting more scrutiny.

You can’t provide more for less.  Forcing health insurers to provide free birth control without charging more in premiums to pay for this will put the private insurers out of business.  Unless they allow insurers to increase premiums.  Then everyone will pay more so women can use birth control without paying for it.  A product that shuts down a natural biological function of the human body.  Which isn’t insurance on more than one level.  First of all, it’s not financial protection against an unexpected catastrophic health care expense.  For there is nothing unknown about this expense.  Second, getting pregnant is the proper thing for female body to do after sex.  Stopping this process is not a health issue.  It’s a lifestyle choice.  And therefore shouldn’t be paid for by the same thing we use to pay for cancer treatments.  An unexpected catastrophic expense.

A highly promoted program that provides a lifeline to people denied coverage because they already had medical problems has probably saved lives. But enrollment in the Pre-Existing Condition Insurance Plan has been disappointing, with only about 50,000 people nationwide.

Glenn Nishimura, a consultant from Little Rock, Ark., checked it out and found his premiums would come to about $6,300 a year.

“It’s out of my price range,” said Nishimura. It makes more financial sense to take care of his high blood pressure and high blood sugars by paying out-of-pocket and gambling that his health will hold up, he reasons. In three years he’ll be eligible for better coverage under Medicare.

This individual mandate, the main target for the law’s critics, also takes effect in 2014. Without it, many experts fear that the new exchanges, the state-based markets for private insurance, won’t work. Healthy people would be tempted to postpone signing up until they get sick, raising costs for everybody.

You can’t provide more for less.  And there’s nothing that costs more in the health insurance industry than paying for preexisting conditions.  Because if you’re covering a preexisting condition it means that the preexisting medical condition wasn’t covered before it existed.  Meaning the person did not buy health insurance when they were younger and healthier.  And paid nothing into the health insurance pools to help offset the costs of those who fall ill with an unexpected and catastrophic illness.  Only now that they are sick and facing large medical bills do they want health insurance coverage to pay these bills.  Which isn’t insurance.  It’s welfare. 

The individual mandate addresses this.  But it’s unconstitutional.  For the government doesn’t have the right to make people buy anything.  And, no, it’s not the same as car insurance.  Because if you don’t drive a car you don’t have to buy car insurance.  And if the Supreme Court upholds this unconstitutional individual mandate it will have the same effect as a massive tax increase.  And kill economic activity.  At a time the nation is still reeling under the Great Recession.  Massive new government expenditures and a fall in economic activity, and therefore a fall in tax revenue, will put the U.S. ever closer to those European social democracies wallowing in the European sovereign debt crisis.  And in case you’re wondering what that would mean it would be a bad thing.  A very, very bad thing.  Unless you like riots in the streets.  As they had them in Greece, France, and the UK.  And elsewhere wherever they tried to cut back some great government welfare program.

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FT104: “Driving is more of a right than health care because it doesn’t cost others when someone drives.” -Old Pithy

Posted by PITHOCRATES - February 10th, 2012

Fundamental Truth

Although it doesn’t Cost Others when Someone Drives it’s Still not a Right because Driving Recklessly can Cost Others

Freedom of religion is a right.  It doesn’t cost me anything (money, time, inconvenience, etc.) for my neighbor to go to church or to practice their religion.  Freedom of speech is a right because it doesn’t cost me anything when someone writes a letter to a newspaper editor.  The right to bear arms is a right because it doesn’t cost me anything when a neighbor owns a gun.  Rights are free in the sense that others don’t have to incur any costs whenever someone exercises a right.  And because they are free no one can grant them.  Or take them away.  Hence they are God-given.  And only God can take them away.  Even an atheist will favor this definition.  For these God-given rights prevent any man from taking away his or her right to publically protest the existence of God.

Housing, food, education, etc., are not rights.  Because these things are expensive.  Someone has to pay for them.  And if you don’t pay for them they will take them away from you.  Or you can lose them if you don’t follow the rules.  A principal can expel a student for causing trouble in high school.  A landlord can evict an unruly tenant in an apartment building.  And if you don’t pay your mortgage the bank can foreclose on your house and take it back.  So these aren’t rights because someone has to pay for them.  You.  Or other people.  And there is a process to go through where someone grants us access to these.  Typically paying for these things.  And following certain rules.

Interestingly, when someone drives a car it doesn’t cost me anything.  Yet driving a car is not a right.  It’s a privilege.  And the thing that makes it a privilege and not a right is similar to housing, food and education.  There are certain rules to follow.  And if a driver doesn’t follow these rules it can then cost others when they drive.  Such as if a driver ignores traffic signals, drives under the influence of alcohol, ignores the posted speed limits, drives recklessly, etc.  Such a person can involve other people who follow the rules into accidents.  Costing them dearly.  It’s because of this that driving is a privilege and not a right.

Unlike Obamacare you can Choose not to Buy Car Insurance by Choosing not to Drive

A car or truck is very heavy.  And as it moves it creates a lot of kinetic energy.  The faster it goes the greater the kinetic energy.  And the greater amount of damage it can cause in an accident.  Causing great damage to other cars.  And their occupants.  Those who were not at fault will incur great costs from these accidents.  The at-fault person, though, may not be wealthy enough to pay these costs.  That’s why we make ALL drivers buy insurance.  So the few that have accidents can have their insurance pay these great costs.  This is a classic example of the use of insurance to spread risk.  Everyone pays a small fee to create a large pool of money to pay for the few who incur these great costs.  By making drivers buy insurance we make them responsible for the consequences of their driving.

Health care is very similar to driving a car.  Only many say health care is a right.  Unlike driving a car.  But health care isn’t a right.  Far from it.  For health care is very expensive.  And someone has to pay for it.  The patient.  Or others.  Just like housing, food and education.  Also, much of our health problems are self-inflicted.  Health problems plague obese people as they age.  Smokers tend to suffer from cardiovascular disease and lung cancer.  Heavy drinkers and drug users suffer a variety of ailments.  People get hurt doing risky things (take dangerous risks while drunk, extreme sports, etc.) and incur great medical costs.  But unlike the driver of a car we don’t make these people responsible for the consequences of their actions.  Instead, we treat them and have other people pay for the consequences of their actions.

Some like to point to the individual mandate in Obamacare as addressing this very problem.  By forcing people to buy health insurance.  So they are responsible for the consequences of their actions.  They say making people buy health insurance is no different from making people buy car insurance.  But it’s not.  Because buying car insurance is not mandatory.  You can choose not to buy it simply by choosing not to drive.  Obamacare offers no such choice.  Unless you call choosing not to live an option.

Health Care is Expensive because Unlike a Driver those who don’t follow the Rules of a Healthy Lifestyle never lose their Living Privilege

Health insurance is nothing like car insurance.  Car insurance protects a person from losing all their savings from an unexpected and unfortunate accident.  By spreading the risk over a great number of people who pay a small premium.  Whereas health care has become welfare.  It has nothing to do with spreading risk.  For people today expect a complete free ride.  For everything.  Whatever the cost.  They don’t want to pay a dime.  Not even for their prescriptions.  They want someone else to pay all of their costs.

And what really makes this welfare is that it will become a pure transfer cost under Obamacare.  The vast majority of people consuming health care are senior citizens.  While the young and healthy consume the least amount of health care.  Obamacare will transfer the costs of those who consume health care to those who don’t.  By forcing the young and healthy to buy health insurance.  That they currently do not buy because they rarely see their doctors.  Instead they use the savings from not buying health insurance to afford something they do use.  Like to pay for a house to live in to start their families.  But once Obamacare forces them to buy health insurance they’ll have to find another cost to cut.  Perhaps selling their car and using public transportation.  Saving on both a car payment.  And the car insurance payment.  Because they have that choice.  Unlike under Obamacare.

Driving a car is more like a right than health care.  It doesn’t cost anyone else as long as they follow the rules of the road.  But we still make them buy car insurance in case they have an accident.  Whereas health care is unlike a right in every way.  There is always a cost whether you follow the rules or not.  And unlike a driver those who don’t follow the ‘rules of a healthy lifestyle’ never lose their ‘living privilege’.  (At least, not yet.  And let’s hope it remains that way.)  They just pass their higher health care costs to others.  Especially the young and healthy who consume very little, if any, health care.  Making it a pure welfare transfer cost.  Of course, in this case, unlike other forms of welfare, this cost will be transferred to those least able to afford it.  The young.  Most of who are not rich.

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FT102: “Unlike welfare benefits health care costs are transferred to the young, not the rich.” -Old Pithy

Posted by PITHOCRATES - January 27th, 2012

Fundamental Truth

An Undereducated and Inexperienced Electorate benefits Democrats

Tax and spend liberals tax the rich to help the poor.  Something the rich don’t completely object to.  For many rich people are in favor of a safety net for those falling on hard economic times.  The rich just object to the growing welfare state.  Where the governments take ever larger sums of money out of the private economy to spend for political purposes.  To buy votes.

A lot of these feel-good welfare programs appeal to the young.  Who don’t understand policy.  Economics.  Or the effect of high taxes on the economy.  They don’t know.  Because no one taught them.  Their public school education has, instead, taught them about the perils of global warming.  And the evils of capitalism.  Which makes them staunch Democrat voters.  Until they start earning a living.  And begin raising a family.  When a lot of them become Republicans.  Which is why Democrats characterize the Republican Party as nothing but a bunch of old rich people who hate poor people.  Which they’re not.  They’ve just grown up.  And now understand things economic.

That’s why the Democrats need this youth vote.  And even floated the idea of lowering the voting age to 16.  Interesting considering the legal drinking age is 21 in most states.  Which begs the question if they are too irresponsible to drink until they reach the age of 21 why would anyone think they’re responsible enough to vote at 18 let alone 16?  But clearly an undereducated and inexperienced electorate benefits Democrats.  Who will vote for them without any idea of the consequence of their policies.

Obamacare will Require the 97% of Young People who don’t Consume Health Care Benefits to Pay for those who Do

The young support Obamacare.  And national health care.  Because they don’t understand health care.  Or the fact that more than 40% of all patients in the health care system are age 65 or older.  While they, those age 18-29, make up just 3% of all patients.

This is different from all other welfare programs.  Where we tax the rich to help the poor.  Many of the rich also happen to be age 65 or more.  So we’re basically taxing rich old people to help the poor.  Now note the difference with health care.  We’re not ‘taxing’ rich old people to help sick people.  We’re ‘taxing’ young healthy people to pay for sick old people.  And the vast majority of the young are not rich.  They are just at the beginning of their careers.  But they are healthy.  Which brings us to a very critical point in the health care debate.  Healthy people don’t see the doctor.  Because they don’t need to.  Which makes many of these young people choose not to buy health insurance.  Because they don’t need to.  Not when only 3% of them are consuming health care services.  Which is why health insurance is so expensive.  The only people who want to buy it are the biggest consumers of health care services.  That would be like people buying auto insurance only after their car was stolen.  Which doesn’t spread the risk over many policies for a small fee.  It doesn’t spread the risk at all.  And the cost of one insurance policy must approach the cost to replace a stolen car.  Which is not insurance in any sense of the word.

Obamacare includes an individual mandate to purchase health insurance.  Which means the 97% of young people who don’t consume any health care benefits will pay for those who do.  Including the more than 40% age 65 and older.  Which makes it the only government program to transfer costs to those who can least afford them.  Those just starting their careers.  Those age 18-29.

The Youth will Understand Obamacare Forcing them to Buy an Expensive Insurance Policy

The Democrats usually can count on the youth vote.  Because they are undereducated and inexperienced.  And vote for their policies without understanding the consequences of these policies.  But they will understand Obamacare forcing them to buy an expensive insurance policy.  Especially if they have to give up using their smartphone to pay for it.  Which will educate and experience them fast.  Making them responsible grownups.  And Republicans sooner rather than later.

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