Free Markets, Free People

Daily Archives: February 22, 2010

The Coming “Health Care Summit” Ambush

Maybe I’m just  being a bit paranoid about this upcoming televised “health care summit” that President Obama has decided is suddenly so necessary.  Maybe it’s that I see politics in every move this guy makes.  This summit just isn’t what it seems and, at least to me, that seems apparent.  What it is however is the perfect opportunity for Obama to play at statesman, provide himself an opportunity to keep a campaign promise and finally make – for once and for all – the GOP the bad guys in all of this.

Here’s the scenario I envision:

Fresh off his televised performance at the GOP retreat in Baltimore a few weeks ago, which received rave reviews from the usual media suspects, the administration hit upon an idea. TV is and always has been the prefect medium for Barack Obama. And the format at the retreat was perfect for him – it allowed him to lecture, cajole and demonize without any real opposition. Why not do that again on an even bigger scale and for some big stakes? Why not do it on health care?

What has been a problem for the Democrats? The public doesn’t like their health care bill. And their continued attempts to pass it have only cause the public to like it even less. But Democrats know that this is the only window of opportunity they’re likely to have and it is closing rapidly. So how do they get the public on their side and get this bill passed? The easiest way is a distraction and a bit of blame shifting. Good TV. The fact that Obama has made it clear that he has no intention of seeing the present and pending Senate bill scrapped should be sounding warning bells among the GOP. This isn’t about compromise. This isn’t about “bi-partisanship”. This is about a justification for passing health care via reconcilliation by showing the Republicans as the “party of ‘no'”.

Think about it. Who controls the format and tone of the the “summit”? Certainly not the GOP (and when they did they still came off looking pretty lame). So let’s say Obama says to the Democrats “what is it you want?” And they claim the “public option” (or whatever). Obama says it’s probably not going to happen. They act disappointed (but don’t forget they have 2200 pages of health care legislation already to be passed). Obama then asks the Republicans, “what do you want”. And they lay it all out – tort reform, drop the mandates, insurance across state lines, etc. And he say, “OK, we will put all that in the bill. Now will you support it?”

Heh … it’s the perfect question, because like any good lawyer, he already knows the answer. The answer is “no”. They’ve already made it clear they can’t support the Senate version of the bill – that’s the bill to be passed. And if they say yes, they may as well resign from office because the backlash will be such that they’d wish they had.

Obama gets his moment recorded by the TV cameras no less. And mournfully he pronounces the Republicans as obstructionists who refused to negotiate in good faith as the great and wonderful Democrats have offered to do. And because of that, it is with a heavy heart and reluctantly he is forced to agree with the Senate Majority Leader Harry Reid that reconciliation is the only route left open to them to do “what is right” for the American people.

Just hide and watch – I’m giving 3 to 1 odds I’m right. Don’t believe it? Read this and tell me it doesn’t indicate the scenario I’ve suggested.



The Dangers Of Reactive Populism

Not necessarily the danger to the politician – they’re seizing upon something which stirs up the public and trying to cash in on it politically.  But such “cashing in” usually leads to bad law.  And bad law leads to unintended consequences and usually more government intrusion.

President Obama will propose on Monday giving the federal government new power to block excessive rate increases by health insurance companies, as he rolls out comprehensive legislation to revamp the nation’s health care system, White House officials said Sunday.

This “new power” to “block” (i.e control) “excessive” (who gets to define “excessive”?) rate increases is a perfect example of the point.

By focusing on the effort to tighten regulation of insurance costs, a new element not included in either the House or Senate bills, Mr. Obama is seizing on outrage over recent premium increases of up to 39 percent announced by Anthem Blue Cross of California and moving to portray the Democrats’ health overhaul as a way to protect Americans from profiteering insurers.

In reaction to a single insurer in a single state raising the premium because of the loss of subscribers and revenue due to the recession, Obama has seized upon that as a populist reason to call for more government control. The subscribers Anthem needs to balance out those they’re paying for are gone. California has been very hard hit by the recession and Anthem is attempting to survive to continue to pay for those subscribers whose treatments it now covers.

Of course that’s seen as “profiteering” by a government which has managed to run up trillions of dollars in future deficits in the medical care program it runs.

Instead of trotting out a suggestion for more control – in this case cost controls (and we all know how well those work – see Venezuela. See Zimbabwe) – the answer should be competition. Clearly if consumers had a choice they’d leave Anthem and hook up with another insurer less likely to raise their fees.  That possibility would limit most insurers from proposing hikes which would run off those they need to support the pool.  And, if Anthem had the opportunity to broaden its base of subscribers by selling across state lines, it most likely wouldn’t have to raise fees or, at least, not 39%.

Consumers don’t have that choice. Insurers are restricted from selling across state lines. Why? Because bad law says so. This is a situation which can pretty easily be remedied and it can be done with less government. Repeal the laws keeping subscribers from buying from whomever they’d like in the US. We do it with every other type of insurance product you can imagine, health insurance should be no different (consider we do it now with Medigap insurance through vendors such as AARP).

Instead we’re likely to see the opposite happen. And, as usual, we’ll suffer the unintended consequences – less coverage, dropping people at the first sign of a disease which carries substantial cost and, of course, insurance companies which aren’t as financially sound as others going out of business.

The bottom line is Obama still doesn’t understand the unrest and dissatisfaction with the direction of this country (as represented by the Tea Parties) has to do with the size, scope and cost of government. The solution here is simple and something which has been proposed by the GOP for quite some time. The administration’s answer, however, is to do precisely the opposite. Obama’s answer to everything is more government, more control, more spending.

And that’s the wrong answer.