One of the sharpest and most compelling arguments of the left is how easily an economy based on democracy can devolve into crony capitalism. Once companies becomes rich enough to lobby, court, and seduce lawmakers into bending the law in their direction, look out. It soon becomes difficult or impossible to tell when companies ends and government begins.
The media, composed mostly of soft left material, does a valuable service—and I say this without sarcasm—by exposing the sleazy private-public connections that would otherwise grow like toxic mold. Of course, this kind of reporting by the media has become an unthinking habit, so that they routinely attack any company of size (that they don’t consider sexy).
A political example: first thing the left did when Rick Perry joined the race for Republican nomination was to charge “Crony!” See Mother Jones.
Funny, then, how the left embraced a key tenet of the Pelosi-Reid-Obama health care law. Which was that every citizen shall pay, from the moment they make their entrance to the second the keel over for the last time, a private company a certain amount of money each month. If the citizen did not want to pay the company, they were to pay a “penalty” directly to the government. This was called the “individual mandate.”
The private company would be one selected by the government itself. Crony capitalism at its most pure, and Congressionally mandated at that. And notice the use of mandate, a rare instance of non-euphemistic bureaucratic language. They were that serious about it. The Democrats (not a single Republican voted for the Act) wanted that money flowing in and, by gum, they were going to get it.
Evidently, the left weighed cronyism versus the unprecedented control over our lives awarded the government by the health care act and chose control.
But one week ago, the US Court of Appeals, 11th Circuit rejected the crony capitalism mandate of so-called Obama-I-Really-Do-Care. In a majority, but alas not unanimous, opinion, the court said
[T]the individual mandate exceeds Congress’s enumerated commerce power and is unconstitutional. This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them re-purchase that insurance product every month for their entire lives. We have not found any generally applicable, judicially enforceable limiting principle that would permit us to uphold the mandate without obliterating the boundaries inherent in the system of enumerated congressional powers. “Uniqueness” is not a constitutional principle in any antecedent Supreme Court decision. The individual mandate also finds no refuge in the aggregation doctrine, for decisions to abstain from the purchase of a product or service, whatever their cumulative effect, lack a sufficient nexus to commerce. [pp. 205-206]
The court also rejected, in fatherly words, the thin Obama government’s argument that the mandate was a novel form of tax. “We add the truism that Congress knows full well how to enact a tax when it chooses to do so. And the Act contains several provisions that are unmistakably taxes.” Further,
The plain language of the individual mandate is clear that the individual mandate is not a tax, but rather, as the statute itself repeatedly states, a “penalty” imposed on an individual for failing to maintain a minimum level of health insurance coverage in any month beginning in 2014.
Judge Stanley Marcus, if his rambling, and at times sputtering, eighty-four-page dissenting opinion is any guide, was beside himself. He liked the individual mandate and he liked it bad.
The judge said the mandate was necessary to take money from those that have it and give it to the government so that the government could in turn use a portion1 of the money to award health insurance to those without it, particularly “those with pre-existing conditions and lengthy medical histories.”
Judge Marcus is not alone in misunderstanding what health insurance is. It is a bet with a company that you hope you do not win. You bet that you will get sick, the company bets you won’t. If you win, the company pays for you doctor’s bill. If you lose, the company keeps your money.
If a company took those with “pre-existing” conditions they would be making bets they have already lost. Where’s the fun in that?
Again, insurance is not health. People want health, not insurance. Merely possessing insurance does not guarantee health. And who says that I should pay for you to restore your health? If I do, does that mean that I can have a vote in how your live your life? (The government would say yes.)
All theses are simple arguments, easily understood. The majority of the 11th Circuit Court did understand them. It remains to be seen whether the Supreme Court does, too.
————————————————————————–
1The rest it would keep for itself.
What about the Chinese method –
You/the state/whatever pay your doctor/the medical system a monthly retainer until you become ill.
At which point you cease paying until you have been restored to health and are well again.
Incentives matter.
Health is a personal condition, not a commodity or service you can buy so you can’t insure for it. That being the case, the only person that can actually care for your health is you. The state and the doctor can’t care for your health. Insurance is to protect you from an unpredictable catastrophic economic loss. Insurance does not pay routine, predictable expenses. Your automobile insurance does not pay for oil changes and tune ups. If you could actually buy health insurance and health care, Teddy Kennedy and Michael Jackson would still be alive because they could afford lots of that.
I fully agree. All this monstruosity should end and america should be given a full blown public health service, period. This is just combining the worst of a system with the worst of the other.
The purpose of forcing all US Citizens to purchase health care insurance is/was to prevent adverse selection – people staying out of the plan unless they are sick or expect to be sick. In the world of real insurance, this is avoided by rating or underwriting each insured or providing an exclusion period for some or all benefits.
Rating/Underwriting. An insurer determines whether or not to insure an individual and what premium to charge based on one or more factors. For example, a person with a history of tobacco use pays higher life insurance premiums and should probably pay more for medical care insurance.
Exclusion Period. Life insurance won’t pay in the event of suicide for a period of time after the policy is in place in order to prevent … well, you get the picture. Similarly a health care policy may not pay for physical therapy for a year for someone who had knee surgery a week before applying for an insurance policy.
Of course, we’re not talking about the real world here. It’s politics and Other People’s Money.
Luis Dias … The US has a full blown Public Health Service.
Health insurance drives up the cost of medical care. It’s amazing how far the price drops if you state you have no medical insurance (almost 67% off). The same is true with auto collision insurance, BTW. It’s amazing how an industry that provides no product can generate need.
The state I live in will pay for emergency medical care for those without money. It’s amazing how many emergency head colds spring up.
@Chuckles: A case of reverse incentives, then: the doctor must then control how you live your life so that he doesn’t spend all of his time (and make no money) trying to fix problems that are the result of indulgences, incompetence, neglect and outright stupidity. That means control over how you live. Works in China, but at what a cost!
@DAV: part of the problem with health insurance is negotiated payment levels for sets of services, with doctors reluctant to handle insurance cases because of the paperwork involved. Pay cash, there is no paperwork. However, this is the result of government mandating of documentation of treatment (aka due diligence for liability purposes, including marginally needed and unneeded testing). If you want cheaper insurance and cheaper medical care, change the liability laws for doctors so that they don’t have to carry very expensive insurance. Of course, that means that you lose the ability to force doctors who do make mistakes to pay for them. Can’t have everything…but try telling that to any ObamaCare advocate or a politician…
And to the original post: bingo. ObamaCare is one of the greatest scams of the collusion between government and a government-regulated sector, the insurance industry. When I heard that most insurance companies were in favor of ObamaCare, that’s when I wrote it off as crony capitalism at its finest…
Problem: Health Care is too expensive. Large numbers of US Citizens can’t afford it.
Solution: Econ 101 says that increasing supply reduces prices. Issue Green Cards to anyone with a medical degree, anyone with a pharmacy degree, and any RN, PA or dentist who wants one. Increase the level of care that an RN or PA can provide without direct physician supervision.
There would be lots of noise from the AMA. Tough.
@John F. Opie,
You are of course correct that those reverse incentives could apply, but only if we take as a given the assertions of the public healthism, lifestyle health, evidence based medicine etc. etc., despite a lack of any compelling evidence that they achieve any worthwhile purpose whatsoever.
I prefer the older approaches of people like Petr Skrabanek and Michael Fitzpatrick, which would probably work quite well in most societies, just as it has done in the past. To quote Peter Mash, quoting Michael Fitzpatrick, quoting Renee Dubos 🙂
“In the words of a wise physician, it is part of the doctor’s function to make it possible for his patients to go on doing the pleasant things that are bad for them – smoking too much, eating and drinking too much – without killing themselves any sooner than is necessary.”
Strikes me as a much more sensible approach, and one perfectly compatible with the Chinese viepoint.
http://www.sirc.org/publik/bad_habits.shtml
or Skrabanek,
http://bradtaylor.files.wordpress.com/2009/06/death-of-humane-medicine.pdf
Judge Marcus represents the majority of the American people: Obama voters. They do not wish limited government, restrictions on governmental power, restrictions on their desires to take and to give, liberty, freedom, or Constitutional government. They desire only power to do as they will. To them Law is the means by which the state justifies its depredations on its subjects. The fascists, socialists, and communists have won the mindshare war: their ideas form the basis for how a government should act in philosophies of most Americans. And that is why America no longer exists.
ErisGuy said,
“They do not wish limited government, restrictions on governmental power [or] restrictions on … liberty, freedom … ”
Is there a logical fallacy here? Or am I mis-reading what you wrote?
Speed,
Yes, you missed “restrictions on their desires to take and to give liberty,…” ErisGuy’s statement is consistent, whether we agree with him or not.
With the possible exception of the giving part; I see no evidence of modern US government desiring to give liberty to the citizens. But perhaps I’ve missed something in the last 20 or so years.