Free Markets, Free People


Initial Reactions to Obama’s Speech

More than anything else I couldn’t help but think that Pres. Obama doubled down tonight and went for broke. He’s going to have a health care insurance plan that includes (i) a public option, (ii) doesn’t add to the deficit, (iii) doesn’t cover illegal immigrants, (iv) covers everybody (whether they want to or not), (v) an independent panel of experts to decide whether doctors are providing the correct treatments or not, (vi) no cuts to Medicare or Medicaid, (vii) finally (FINALLY!) ending waste, fraud and abuse in the health care already provided by government, (viii) an independent panel (same? different?) that controls costs, and (ix) something undefined to address defensive medicine. Essentially, he’s promised HR 3200 plus a bunch of other stuff. In a nutshell, provided that he sticks to these promises (mmhmm) I think Obama just made sure that no health care insurance plan will ever be passed during his administration. Go Obama!

A couple of other quick thoughts:

(A) Regarding the public option, Obama claimed:

Despite all this, the insurance companies and their allies don’t like this idea. They argue that these private companies can’t fairly compete with the government. And they’d be right if taxpayers were subsidizing this public insurance option. But they won’t be. I have insisted that like any private insurance company, the public insurance option would have to be self-sufficient and rely on the premiums it collects. But by avoiding some of the overhead that gets eaten up at private companies by profits, excessive administrative costs and executive salaries, it could provide a good deal for consumers.

This was his counter to the “myth” that government would not be taking over health care, and that you would be able to keep your plan if you like it. However, assuming the president is correct, if the public option does not have the same “overhead” going towards “profits, excessive administrative costs and executive salaries” then won’t it be passing those saving on to consumers? And if so, won’t that price the private plans out of the market? After all, why would anyone choose to pay more for coverage if they don’t have to?

(B) Also regarding the public option, Obama claimed that its purpose is to introduce competition into the market place for insurance. He even compared it to the way that public schools compete with private ones:

It would also keep pressure on private insurers to keep their policies affordable and treat their customers better, the same way public colleges and universities provide additional choice and competition to students without in any way inhibiting a vibrant system of private colleges and universities.

Of course, no one is required to go to college, and these are state-run organizations that are heavily subsidized. Yet, just two breaths earlier, Obama claimed that the public option would not be subsidized by the government (albeit while also claiming that people who could not afford it would be given tax credits to cover it, but one lie at a time please). In addition, don’t we hear more and more complaints every year about how quickly the costs of college are rising? In short, how is this in any way an apt comparison, or if it is, how does it support Obama’s case that a public option is a good thing?

(C) Obama also made this strange claim:

Finally, our health care system is placing an unsustainable burden on taxpayers. When health care costs grow at the rate they have, it puts greater pressure on programs like Medicare and Medicaid. If we do nothing to slow these skyrocketing costs, we will eventually be spending more on Medicare and Medicaid than every other government program combined. Put simply, our health care problem is our deficit problem. Nothing else even comes close.

Doctors and hospitals routinely state that because they are not fully compensated by Medicare/Medicaid for the work they do, they are forced to raise prices on patients who pay through private insurance. Now Obama is trying to claim that it’s private insurance causing Medicare/Medicaid to go bankrupt?

Anyway, those are just my initial reactions. I’m really wondering if anyone else sees the same thing I do with respect to Obama’s demanding a bill that includes absolutely everything essentially killing any chance of health care reform being enacted. If the progressives won’t accept anything less than a public option, and the Blue Dogs won’t vote for a public option, and Obama vetoes any bill that adds to the deficit, how the heck is Congress going to pass anything at all?

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20 Responses to Initial Reactions to Obama’s Speech

  • And if so, won’t that price the private plans out of the market? After all, why would anyone choose to pay more for coverage if they don’t have to?

    Not if private insurers are able to offer better performance than government standard healthcare. The existance of Hyundai has not yet meant the demise of Ferrari.

    • That’s because the government is telling Ferrari what it must and must not include in its cars in order to be an “approved” car.

      Also, do we really want a public plan priced at Hyundai levels and private plans priced at Ferrari levels which are anywhere from 5 to 10 times the cost?

  • President Obama said, “But by avoiding some of the overhead that gets eaten up at private companies by profits, excessive administrative costs and executive salaries, it could provide a good deal for consumers.”

    To probe this statement, try this thought experiment. Say that the US State Department is building a 200-car parking lot in the suburbs in Virginia. Say also that WalMart is building a 200-car parking lot to the same specifications right next door. Which entity can build their parking lot cheaper?

    The answer, of course, is WalMart. The reason is that “value” actually means something to private entities. Value means very little to public entities (especially the federal government) because public entity actors are not risking their own money. They don’t give a royal fork whether they meet budget objectives or not.

    So, despite the fact that private entities have profits, administrative costs and executive salaries, they produce goods and services more efficiently than public entities.

    If it were NOT so, then the private sector would be “outsourcing” jobs to the federal bureaucracy. But that doesn’t happen.

    The so-called “public” health insurance company will be less efficient than private sector health insurance providers…but it won’t matter. The public insurance company will be able to draw on the Federal Treasury to mask its inefficiencies. In the course of constructing and maintaining this charade, they will kill the private sector.

    —Tom Nally, New Orleans

  • Here’s my question: If he really thinks he can cut $900 billion(!) in “waste and inefficiency” from Medicare and Medicaid, shouldn’t he be doing that now?

    Is that money being held hostage to his plan? “Do as I say, or I’m going to spite you by wasting the better part of a trillion dollars.” Talk about cynical and irresponsible politicians …

  • What is clear is that the fate of the “public option” seems painfully unclear.

  • I have insisted that like any private insurance company, the public insurance option would have to be self-sufficient and rely on the premiums it collects .. sort of like the way Fannie Mae and Freddie Mac operate.

    • ditto on that one…

      And who are the insured going to sue if some treatment isn’t covered under the public plan??

  • The only way they can guarantee they will put competitive pressure on other insurers is if they are willing subsidize it to make it that way. How else can they ensure that?

    The great bureaucratic efficiency of the public sector vs. the private sector?
    Denying pre-existing conditions and all the other bad things that private companies get them portrayed as evil?
    Putting an end to lawsuits and lawsuit inspired over-testing?

    or…

    throwing money at it?

    Let me see, what is the last issue congress attempted to address by means other than throwing money at it? Its been a while.

  • What got me is the utter bold faced lies he told. No illegal immigrants? The house bill says with no uncertain terms that you cannot ask about immigrant status. So that is a lie.

    Not only immigrants but hell, anyone with a visa could fly into the USA, join Obama care (you cant ask remember), get some expensive procedure done at our expense, and then fly home. Anything that their own socialist system doesn’t cover.

    The SOP to conservatives about tort reform is a red hearing, there is nothing at all about that in any of the various senate or house bills. I suppose that is merely a promise for the future, Uh Huh.

  • The democratic party will drown in its dogmas.

  • People WANT to believe the president (any president).

    MiniTru will pull out all the stops to convince them to believe TAO.

    Will it work???

  • I wonder if they “focus group” tested that almost angry, stern face that Obama used or he just “winged it” ?

  • Doctors and hospitals routinely state that because they are not fully compensated by Medicare/Medicaid for the work they do, they are forced to raise prices on patients who pay through private insurance. Now Obama is trying to claim that it’s private insurance causing Medicare/Medicaid to go bankrupt?

    This is one of those “Is he lying or is he clueless?” moments for me, which are not uncommon when I listen to leftist politicians.

    I generally lean towards clueless. Leftists generally don’t think much about market mechanisms, profit-and-loss, cash flow, and other things the average businessman must know to survive. They’ve never had to. In their cosseted leftist bubble, in which money springs from the fountain of government, it’s not necessary.

    So I believe that Obama can say this with a straight face because he’s literally never thought about the cross-subsidation going on for Medicare and Medicaid. Couple this with an inborn need to say anything necessary to gain power, and it’s easy for him to assert blatant nonsense.

  • “So I believe that Obama can say this with a straight face because he’s literally never thought about the cross-subsidation going on for Medicare and Medicaid.”

    It is his responsibility to know this. He just doesn’t care to, since he’s a pomo cod-Marxist (which cashes out to practical fascism) who hates freedom, capitalism and the notion of universal human dignity and essence.

  • What happened to President Obama’s line by line cuts? I remember this was what he campigned on and more than likely why he was voted president. Instead we see, companies, corporations, and small business going bankrupt, American people losing their jobs and NOW… he wants to fix everything by government run healthcare it sounds like to me he plans on spending even more money. I didn’t trust him in the begining, and I damn sure don’t trust him now. Wake up America before it is too late.

  • I can’t get over the canard about how we need government to reform health care in order to make it more efficient, unlike say Medicare or Medicaid. This is more of that “of course government can compete, just look at the Post Office” line of reasoning. Why are we being asked to entrust health care to the people who run the postal service, DMV, Social Security, and Medicare? Especially when those people are apparently oblivious to how catastrophically bad those programs and departments are at efficiency?

  • For those old enough to recall – this is like watching a national episode of Green Acres.

    Obama is Mr. Haney (Or Joe Isuzu…but that’s another story…)
    Nancy Pelosi and Harry Reid are the Munroe “brothers” in charge of repairing the nation.
    Job Biden as Hank Kimball.
    The Left Wing support base, personality cultists, are the collective thought processes of Lisa Douglas.
    The Republican party is Eb.

    It might be funny if it weren’t for real.

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