Free Markets, Free People


IBD Stands By Story About Private Health Insurance

Last week Investors Business Daily ran an editorial claiming that the new 1018 page House health care reform bill had a provision (on page 16) that outlawed private insurance.

Well they caught some flak for that, with detractors claiming that they didn’t read far enough and had they done so they’d have found that wasn’t the case. IBD did the right thing and did indeed go back an revisit their claim.

Conclusion – they stand by their story. Here’s why:

Our impression was further confirmed Monday when Rep. Dave Camp, the ranking member on Ways and Means, told us that “any existing plan will not be able to enroll members.” There will be “a prohibition,” the Michigan Republican said, “on enrolling individuals in private health plans” after the bill becomes law in 2013.

It was also confirmed by Ways and Means staff director Cybele Bjorklund, who, in response to questions from Republican Rep. Paul Ryan of Wisconsin during a committee markup session, admitted last week that insurance providers “cannot create new policies outside of that window outside of the exchange.”

Many of those who have said we are wrong pointed to this health care exchange mentioned by Bjorklund as evidence.

But the exchange will not be a private market. It will be a program in which Americans can buy individual plans from private companies in competition with the “public option” provision of the bill that will provide taxpayer-subsidized coverage.

So in essence you’ll be limited to an insurer on the exchange, with all the regulation and mandates applied which is turn competing with a “public option” plan. You can’t just call up a private insurer and gin up your own brand and level of coverage.

Instead, you’re limited to the slim pickin’s the “exchage” will offer:

The exchange will be a highly regulated clearinghouse of providers that meet the government’s standards. Only those providers that follow Washington’s stringent guidelines will be allowed to join this exclusive club.

The government, through an unelected health choices commissioner, will set premiums, dictate benefits, determine deductibles and establish coverage. Exchange participants will be required to insure anyone who asks to be covered and to accept all renewals. Ryan believes the weight of the mandates will mean only five or six providers will be able to survive and sell coverage in the exchange.

Yes friends, as we’ve seen so often from this administration already, this is government picking winners and losers. From 1300 competing insurance providers today to “five or six”. That’s the government’s idea of “competition?”

And again, to reinforce the point, that is the only place you’ll be able to get your insurance should, for instance, you change a job. Or, as anticipated, your employer opts to quit providing it and essentially points you toward the exchange.

Even Henry Waxman admits this even while trying to convince reporters that IBD had it wrong in their first editorial:

In trying to prove the exchange will be a private market, the bill’s own supporters actually prove our point. Rep. Henry Waxman, D-Calif., complains in a letter that last week’s editorial is “factually incorrect and highly misleading” yet admits three paragraphs later that outside the exchange, providers “can’t continue to market” existing “policies to new customers.”

Restraint of trade by regulation. Insurers are limited to the “exchange” and if not on the exchange, they’re essentially not in the health insurance business other than servicing existing policies. Obviously as their pool shrinks, their prices will go up, causing their pool to shrink further. That’s competition? That’s a “market”?

As John Stossel said the other day:

Like the politicians, most people are oblivious to F.A. Hayek’s insight that the critical information needed to run an economy — or even 15 percent of one — doesn’t exist in any one place where it is accessible to central planners. Instead, it is scattered piecemeal among millions of people. All those people put together are far wiser and better informed than Congress could ever be. Only markets — private property, free exchange and the price system — can put this knowledge at the disposal of entrepreneurs and consumers, ensuring the system will serve the people and not just the political class.

Yet here again we have the central planners deciding what will be a “market” and of what it will consist. I hate to break it to them, but that’s not at all a market. It’s an artifice created by legislators to give the veneer of competition to a “market” that is decidedly not one.

Instead:

Anything that is primarily steered by the hand of the government rather than the price signals that free markets so efficiently process on a daily basis would be an agency of the state.

The artificially legislated bars to entry will make this a captive process of the state.

And lastly:

Perhaps most damning to the argument of those who say we are wrong about the House bill outlawing new individual private coverage is the creation of the exchange itself.

If getting coverage from the exchange is the same as buying insurance in the private market, then why do we need it? The authors of the bill could have kept the private option by doing nothing.

In fact, if they really wanted a “market” and “competition” they should remove mandates and allow consumers to buy health insurance products across state lines. Allow the consumer to decide the type of coverage he wants and the amount he’s willing to pay. Review that with Stossel’s point about markets and you’ll begin to understand the power such a market would have in lowering insurance costs without the government having to do much of anything.

What Adam Smith said about the economic planner applies here, too: The politician who tries to design the medical marketplace would “assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.”

They don’t want competition, folks – they want control. And history tells us where that leads.

~McQ

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17 Responses to IBD Stands By Story About Private Health Insurance

  • This makes a good point, i guess on a purely factual level it doesnt outlaw private insurance companies per say, as some have been lead to believe, but when reading it myself i saw that its truly no better, its basically saying
    “Everyone is on the government plan, but we could care less who you buy it from because were taking it from your taxes anyway. Your choice to pay twice.”

  • {Sigh} Time for another reminder on the post-modern aspects of today’s left.

    I hate to reinterate comments I made about this time last year, but I see very few allies on the right who truly appreciate the psychology of the left.

    Waxman is not lying, at least not consciously. What he’s doing internally is redefining the terms to suit his argument, just as Harry Reid did a bit more obviously in the video linked above.

    In his mind, the fact that any insurance companies continue to exist in any form refutes what IBD is trying to say. The fact that they can’t sign up new customers except under the government’s terms is beside the point to him. The fact that this will eventually cause many of them to go out of existence does not matter. After all, companies go out of business all the time. After you factor in the good intentions of Waxman and his buddies, they are completely convinced in their own minds that they are doing the right and good thing, and if you can’t see that you’re just an ignorant free-market partisan.

    This is why, as I mentioned in the earlier thread, that it’s just about pointless to take these people on in direct debate. They demand that we accept the terms they way they define them. No fair complaining that those terms are incorrect or at odds with historical interpretation! That’s the only playing field on which they are willing to debate, and they’ve rigged it so they have trump cards that always win.

    Facts don’t matter, and logic doesn’t matter. To a post-modern leftist, facts are socially constructed, malleable things that they can reject via intuition if their argument requires it. Logic is another socially constructed entity that completely varies by experience, capable of many forms so that, for example, wise Latinas can have a different and superior form to while males. And leftist politicians have the highest form of all, because they just care so darn much about the rest of us.

    I know many of you think Obama is a bald-faced liar in much of what he says, because it’s false to fact. But he doesn’t see it that way! He thinks he’s telling a higher truth, and he is unencumbered by the necessity for what he says to resemble reality as we subscribers to the Enlightenment see it. As I said on the previous thread:

    …in the end they accept the same principles about rhetoric that both Communists and fundamentalist Muslims do: that it is acceptable to use deception, confusion, or any other rhetorical trick (up to and including what an Enlightenment thinker would call outright dishonesty) to gain [their] objectives. And they can do it while simultaneously believing that they are more moral then the people they are lying to.

    • Billy Hollis – “… [lefties] accept the same principles about rhetoric that both Communists and fundamentalist Muslims do: that it is acceptable to use deception, confusion, or any other rhetorical trick (up to and including what an Enlightenment thinker would call outright dishonesty) to gain [their] objectives. And they can do it while simultaneously believing that they are more moral then the people they are lying to.”

      I couldn’t agree more. The lack of consistency in their arguments and interpretation of facts (indeed, what they even agree is “fact”) is the principle reason that I think of lefties as quite literally brain damaged. How is it possible, for example, to honestly believe that George Bush “lied” about Iraq? Or to believe in global warming? Or that TAO is some sort of genius? Answer: one must be either a liar or else fundamentally incapable of understanding reality on a consistent basis. Or both.

      `I don’t know what you mean by “glory”,’ Alice said.

      Humpty Dumpty smiled contemptuously. `Of course you don’t — till I tell you. I meant “there’s a nice knock-down argument for you!”‘

      `But “glory” doesn’t mean “a nice knock-down argument”,’ Alice objected.

      `When I use a word,’ Humpty Dumpty said, in rather a scornful tone, `it means just what I choose it to mean — neither more nor less.’

      `The question is,’ said Alice, `whether you can make words mean so many different things.’

      `The question is,’ said Humpty Dumpty, `which is to be master — that’s all.’

      Lewis Carroll
      “Through the Looking Glass”

  • If this provision were the scariest part of this massive boondoggle, it would be bad enough. But it isn’t. There will be a “Council on Minority Health” that will give monetary preferences to “underrepresented minorities” – as well, it gives the Secretary of Health and Human Services to power to dole out money only to colleges and universities that give minorities special treatment to become physicians, including – but not limited to – punishing those institutions that do not reach a certain number of minority physicians.

    Those are called QUOTAS. Those are called SET-ASIDES. And they are patently ILLEGAL.

    Of course, when you have a gang of fools running this gubmint now, what stops them from doing illegal sh!t?

    This “reform” needs to die. It needs to die a painful death. And I want to see it as bad as I want The Clown™ out of office yesterday.

  • One of the thingts I don’t like about this is that we will never know who actually put all these things in the reform bill. There is, and will be, no accountability to the voters.

  • timactual… we will never know who actually put all these things in the reform bill. There is, and will be, no accountability to the voters.

    Excellent point.  Did some staffer write this?  Probably so.  Was it done with the full knowledge of the member he works for?  Possibly not.  No matter what the truth, you’re right: there will be no accountability.

  • I guess Oliver missed this post?   I mean, shouldn’t he be here to tell us it’s a made up clause?

    • I was thinking the same.  I replied to his comment that time, explaining that IBD’s title was misleading, but the description of the problem was not.  This explanation is in line with what I said– that the health care bill doesn’t explicitly make it illegal to get private health insurance, but it builds a system where private insurance carriers will be bled to death until the only option is government care.  Leftists latched on to the inaccurate title in order to ignore or dismiss the information that is not convenient for them to discuss.

  • Amazing.  And it reminds me of something that helped derail Newt Gingrich’s career as speaker, just a couple of years after I turned old enough to vote, and started paying attention to such things.
    Flashback — 1995, Newt Gingrich addressed a Blue Cross/Blue Shield conference.  Regarding Medicare, he stated:

    We don’t get rid of it [Medicare] in round one because we don’t think that would be politically smart and we don’t think that’s the right way to go through a transition. But we believe it’s going to wither on the vine because we think people are going to voluntarily leave it – voluntarily.

    The point being that if Medicare had to compete with private alternatives — truly compete — those on Medicare would take their nickel someplace else and the need for a government held monopoly would disappear. 

    Today, the Dems are proposing the exact same thing in reverse.  Regulate the heck out of private health insurance, and let it wither on the vine as we all “choose” the government option.  Only in this case, it’s not a voluntary choice because it’s not based on a free-market alternative.  It’s based on the passive-aggressive coercion of government through regulation.

  • LEAD, FOLLOW, OR GET OUT OF THE WAY. (Thomas Paine)

    We have the 37th worst quality of healthcare in the developed world. Conservative estimates are that over 120,000 of you dies each year in America from treatable illness that people in other developed countries don’t die from. Rich, middle class, and poor a like. Insured and uninsured. Men, women, children, and babies. This is what being 37th in quality of healthcare means.

    I know that many of you are angry and frustrated that REPUBLICANS! In congress are dragging their feet and trying to block TRUE healthcare reform. What republicans want is just a taxpayer bailout of the DISGRACEFUL GREED DRIVEN PRIVATE FOR PROFIT health insurance industry, and the DISGRACEFUL GREED DRIVEN PRIVATE FOR PROFIT healthcare industry. An insurance bailout is all you really get without a robust government-run public option available on day one.

    These industries have been slaughtering you and your loved ones like cattle for decades for profit. Including members of congress and their families. These REPUBLICANS are FOOLS!

    Republicans and their traitorous allies have been trying to make it look like it’s President Obama’s fault for the delays, and foot dragging. But I think you all know better than that. President Obama inherited one of the worst government catastrophes in American history from these REPUBLICANS! And President Obama has done a brilliant job of turning things around, and working his heart out for all of us.

    But Republicans think you are just a bunch of stupid, idiot, cash cows with short memories. Just like they did under the Bush administration when they helped Bush and Cheney rape America and the rest of the World.

    But you don’t have to put up with that. And this is what you can do. The Republicans below will be up for reelection on November 2, 2010. Just a little over 13 months from now. And many of you will be able to vote early. So pick some names and tell their voters that their representatives (by name) are obstructing TRUE healthcare reform. And are sellouts to the insurance and medical lobbyist.

    Ask them to contact their representatives and tell them that they are going to work to throw them out of office on November 2, 2010, if not before by impeachment, or recall elections. Doing this will give you something more to do to make things better in America. And it will help you feel better too.

    There are many resources on the internet that can help you find people to call and contact. For example, many social networking sites can be searched by state, city, or University. Be inventive and creative. I can think of many ways to do this. But be nice. These are your neighbors. And most will want to help.

    I know there are a few democrats that have been trying to obstruct TRUE healthcare reform too. But the main problem is the Bush Republicans. Removing them is the best thing tactically to do. On the other hand. If you can easily replace a democrat obstructionist with a supportive democrat, DO IT!

    You have been AMAZING!!! my people. Don’t loose heart. You knew it wasn’t going to be easy saving the World. :-)

    God Bless You

    jacksmith — Working Class       

    Republican Senators up for re-election in 2010.

    * Richard Shelby of Alabama
    * Lisa Murkowski of Alaska
    * John McCain of Arizona
    * Mel Martinez of Florida
    * Johnny Isakson of Georgia
    * Mike Crapo of Idaho
    * Chuck Grassley of Iowa
    * Sam Brownback of Kansas
    * Jim Bunning of Kentucky
    * David Vitter of Louisiana
    * Kit Bond of Missouri
    * Judd Gregg of New Hampshire
    * Richard Burr of North Carolina
    * George Voinovich of Ohio
    * Tom Coburn of Oklahoma
    * Jim DeMint of South Carolina
    * John Thune of South Dakota
    * Kay Bailey Hutchison of Texas
    * Bob Bennett of Utah

    • File this one under “unclear on the concept”.

    • Anytime you see someone describe themselves as “working Class” It means the exact opposite. It means they have nothing but contempt for working middle class people and want to control them and take away all their options.

    • Uh just to ask a question about a single observation by jack of the working class…

      Republicans and their traitorous allies have been trying to make it look like it’s President Obama’s fault for the delays, and foot dragging. But I think you all know better than that. President Obama inherited one of the worst government catastrophes in American history from these REPUBLICANS! And President Obama has done a brilliant job of turning things around, and working his heart out for all of us.

      Jackie, tell us, who took control of Congress and the Senate in 2006? Not to intrude on your delusion of reality or anything, but do you think you can answer that question? To paraphrase Ghostbusters – “who ya gonna blame!”

    • I know there are a few democrats that have been trying to obstruct TRUE healthcare reform too.

      Obama and Biden head that particular list.

  • Lefties seem to be totally ignorant of the concept of economic competition.  It’s as though part of their brains are missing.  You never see them discussing economics outside the context of government intervention.  Scour the intertubes in search of a Leftie who can explain how this “insurance exchange” constitutes a market, and you’ll turn up empty — to the contrary you’ll find them squealing with glee over the prospect of killing those “evil” insurance companies once and for all.

  • And it should come as little surprise that the self-appointed fact-checker of record, Pulitzer Prize-winning Politifact.com can’t understand this and labels the IBD editorial “Pants on Fire” false.

    You can’t trust them.

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