Last week’s health-care summit at the Blair House was very instructive as to the current mindset of the Obama administration and the Democratic party. It also demonstrated that the Republicans have very good ideas — ideas that have not been paid much attention, because instead of addressing them, the mainstream media has chosen to talk generically about the public’s disillusionment with the Democrats’ health-care plan, and to imply that Americans are just too ignorant to realize how good Obamacare is.
Because of the way they see America’s health-care industry, the Democrats want to punish insurance companies instead of reforming them. West Virginia senator Jay Rockefeller said it’s a good idea to “clip their wings in every way you can,” because it is “a rapacious industry that does what it wants.” If only the insurance companies could be brought to heel, it would all be so much better.
Indeed, health-care companies are for-profit businesses. As there is legitimate concern that the health-insurance industry will pocket monthly insurance premiums and not pay out a sufficient proportion of claims, state governments have legislated minimum benefit packages and set minimum proportions of premium collections that must be spent on claims (usually 70 percent or higher).
But health-insurance companies are not awash in cash; profits barely exceeded 2 percent of revenues in the latest annual measure. The credit ratings of some of the largest insurers have been downgraded to negative from stable heading into this year. (This is due to concern about Obamacare’s intrusion into the insurance market.)
And what would the Democrats replace this system with? The Congressional Budget Office estimates that under their plan, premiums in the individual market would jump by 10 to 13 percent in 2016 because of the government’s mandating that consumers buy richer benefits than they otherwise would. Obama claims the higher premiums will mean better service: “Yes, I am paying 10 to 13 percent more because instead of buying an apple, I’m getting an orange.”
What if I do not want an orange, as I am happy with my apple? Tough luck. Obama is saying that Americans cannot hope to understand medical treatments and decipher what services they should or should not pay for. They are better off under a government system laid out over the course of 2,000 pages of legislation — one that does not pay for its annual cost (to manipulate the Congressional Budget Office into scoring the legislation they way they wanted, legislators had to pair ten years of tax collections with six years of benefits) and that features $37 trillion in unfunded government liabilities.
Fortunately, there is another side to this debate. Congressman Paul Ryan of Wisconsin stated yesterday:
By federalizing the regulation of insurance and by mandating exactly how it will work, you make it more expensive, and you reduce the competition among insurers for people’s business. . . .We want to decentralize the system, give more power to small businesses, more power to individuals, and make insurers compete more. But if you federalize it and standardize it and mandate it, you do not achieve that. . . . Should people in Washington decide exactly how this works and what you can and cannot buy? . . . And so what we’re simply saying is, look, lots of us have offered lots of different ideas. We’ve got dozens of Republican ideas offered in the House in bills, in the Senate, and many of us look at the point of the fact that the states — you know, do we distrust our governors? do we distrust our state legislatures?
Democrats are pretending that their ideas are similar to the Republicans’. They said it over and over last week. This provides the political cover they need to ram this legislation through via reconciliation. But the Democrats have no idea the sleeping giant they will awaken if they do this: the giant that is the American people.
– Erik Dahl is an MBA and physician.