Stone Pigs

Posted By Alan Partis on January 3, 2010

Much has been written and much has been said about Obamacare … some of it has even been cogent.  I’m going to try to put some of these arguments to bed once and for all (oh, were that even possible).

Let’s start with the basic premise that the current system of health/medical care delivery and payment is not working with peak efficiency.  I think it is safe to say that a vast majority of Americans agree with that thought, so I’m going to work from that premise.  When asked, I will also stipulate that most people will cite the cost of their insurance premiums as the most evident thing that is ‘wrong’ with our health care system.  So let’s take a quick look at that first.

The cost of medical insurance premiums is actually higher than many people think, since those people get their insurance as part of a group benefit through their employer.  People don’t see how much their employer is paying.

The reasons for the high price are two-fold: the misuse of insurance and the cost of medical/health services.

Many people expect to have their health insurance provider pay for every visit to a doctor and every medication they purchase.  This would be like expecting to have your auto insurance cover the cost of every oil change.  I think everyone realizes that doing so would make auto insurance much more expensive.  Health insurance products are designed to be used as a backstop against financial ruin in the face of some sickness, etc.  If it is going to be used simply as a payment plan covering every little expense along the way, then it loses its ability to spread the risk among a larger pool and rapidly increases in expense.

The solution is to encourage people to buy their own insurance when they’re young and healthy, have high deductibles, and a tax-advantaged HSA.

Pre-existing conditions

Some people have made arguments about pre-existing conditions, and the practice by insurance companies to deny coverage to new customers based on their pre-existing health conditions.  Here’s one such argument that has been presented to me:

The problem in health care is pre-existing conditions.  I believe in free markets as the most efficient way to deliver goods and services.  I just cannot see how a free market can work with pre-existing conditions.

This argument implies that only regulated markets are capable of delivering medical services most efficiently and fairly.

Pre-existing conditions is a symptom of the problem, not the problem itself.  The problem, is that many folks now get their insurance through their employer.  When they change jobs they have to change insurance companies and the new company is rightly reticent to take on these large liabilities without equally large premiums.

Again, the solution is to get the employer out of the picture.

Virtually none of us have pre-existing conditions right out of the womb.  For those that do, I am more than willing to share the fruits of my labors if I am ASKED to do so — I prefer not to be forced.

With the employer out of the picture, there is little reason to be concerned with losing your insurance and thus with pre-existing conditions.

The uninsured.

Some will argue that there are a great many uninsured people that, for one reason or another, must be provided with health insurance coverage.

This is a straw man argument.  Yes, I will stipulate that there exists some group of people who truly want to buy health insurance, but simply cannot afford to do so at current prices.  They are therefore powerless to provide for themselves and are at risk of being a burden on their fellow man, though they would wish not to be.  I maintain that the number of people that fit this condition is far lower than the various numbers we hear tossed about in debate in Washington.  I don’t pretend to know what the real number is, but let’s examine some of the groups that might compose this segment of our population.

Some portion of the uninsured population are not United States citizens.  For the purposes of this debate, these people are of no consequence.  We’re talking about a US government program being offered to citizens.  If non-citizens want to purchase insurance from a private insurance company, they are more than welcome to do so.  More power to ’em.

Some portion of the uninsured can afford to purchase insurance at today’s prices and simply choose not to.  Their reasons are their own and these people do not concern me.  They are free to choose their own path in life … just make sure that these people do pay for whatever medical services they choose to buy and don’t leave me with the tab.

Some portion of the uninsured are lower middle class and don’t think they can afford to buy their own insurance.  Come back and talk to me later when you have sold your big screen TV and gaming console.  Life is full of choices that all of us must make every day … and we must live with the consequences of those choices.

Some portion of the uninsured are truly poor, aren’t employed by a company who buys their insurance for them, but work hard and is a positive influence on US GDP.  These people I’d like to help.  There are probably a dozen different ways to reach the goal of getting an adequate level of health insurance for these people.  One suggestion, and certainly not even the best one, is to simply pay their premiums for them out of State or Federal tax revenue.  This group of people accounts for as little as 1% of our population and perhaps as much as 5%.  Assuming a $5,000/year premium, the total cost would be between $15 billion and $75 billion annually.  Over 10 years we’re still talking about something far less expensive, and invasive, than what is being debated in the halls of Congress right now.

And another portion of the uninsured are uninsurable due to …

Pre-existing conditions part II

A lot of people, 70% of the uninsured, are where they are through no fault of their own.  It’s not fair that greedy insurance companies deny them coverage just because they got sick.

70%?  I doubt it, but that still implies that at least 30% of people with pre-existing conditions are people suffering from essentially self-inflicted wounds.

I think we’re just “haggling over price” again here.

Certainly there is SOME percentage of people whose health problems are the result of their own decisions.  Any doctor or nurse can tell you that a lot of what ails us is rooted in our weight and a direct result of our own diet and lifestyle choices.

Even if the number is just 10% of the uninsured, should I have the fruits of my labors taken from me under the threat of violence (if I refuse to pay taxes, the IRS will have armed men come to my house and carry me off to prison — that is the very definition of the threat of violence) so they can be given to someone whose problems are self-inflicted and has chosen not to use the fruits of their own labors to buy the insurance I’m going to be forced to give them?  That would just not be right.

That said, the argument about pre-existing conditions is still a bit of a straw man argument because it’s not axiomatic that people with pre-existing conditions are absolutely frozen out of the free market for medical care.  I know from personal first hand experience that most insurance companies will still accept such new customers, but will either exclude coverage for that condition, or charge a higher rate to cover it.  This then puts the discussion back into the realm of affordability as previously discussed.

Greedy insurance companies

As has been previously mentioned, there is a belief among some that big insurance companies are just greedy and only looking out for themselves and their shareholders, and not for the health and well-being of their paying customers.

Let’s dispense with the obvious absurdity of that: by law, corporations that sell stock to the public have a primary fiduciary responsibility to the financial health of their stock holders.  Additionally, all corporations, whether public or private, must obviously look out for the best interests of their customers or else they will have no customers and therefore will cease to exist.  Being greedy, to the exclusion of their customers’ benefit, would then be a very self-limiting course of action.

However, what IS at the root of this complaint, and is really misunderstood by those who pose it, is that BIG insurance companies are subject to massive amounts of government regulations and are very willing to use their size and power to work with regulators and manipulate markets to their own advantage.  This leads to limits on our choices as consumers and degrades the quality of those limited choices.

But this is actually an argument against corporate SIZE, not GREED.  Greed will cause insurance companies to provide products that more and more people in the marketplace want.  Size causes insurance companies to care less about individual customers and more about competitors.

BIG insurance companies are happy to have their marketplaces very much protected by huge amounts of government regulation.  They know consumers actually have little choice in who their insurer is if they are getting insurance through their employer.  They are happy to keep competitors out to the extent possible.

I believe the solution to this problem is not to bring the behemoth federal government into the picture, but, again, to take the employer OUT of it AND to limit the size of these insurance companies.  Smaller insurance companies tend to be much more customer responsive and are no less capable of handling the things that insurance should actually do — they have bigger re-insurers behind them for fall-back positions.  Let’s not compound one problem that we have today by adding more government bureaucracy to it.  We have plenty of evidence that such bureaucracies do not make anything better.

Compassion

What about this argument for compassion as presented by a doctor:

Human beings take care of each other, that’s what separates us from the animals.

Yes, but humans who are forced to do so by government order are called slaves.

Dare to learn a little bit about yourself and answer these questions honestly:

1. Do you believe that it is moral and just for one person to be forcibly used to serve the purposes of another?
2. If that person does not peaceably submit to being so used, do you believe that there should be the initiation of some kind of force against him?

Do these questions not define slavery i.e. through the threat of violence, forcing one individual to work for the benefit of another?  I believe that is morally wrong.

People should have the freedom to do as they see fit (within the bounds of not infringing the rights of others to their life, liberty, and property).  In that scenario, many people will still freely choose to help others (as history shows) … and that is a wonderful thing.

Health care is a right

Hogwash.  It’s not a right if your exercise thereof necessarily requires the labors of another of your fellow citizens.  You certainly have the right to be your own doctor and take good care of yourself though.

Certainly, health care could be defined as a benefit of US citizenship, and that IS what this debate is all about, but it is wrong to suggest that health care is a right.  Those who feel they must stoop to making this argument simply to support their otherwise untenable position, serve only to weaken their arguments.

Single payer

Some people favor a single payer system where all medical bills are paid by one payer, usually a government.  Some people don’t.  I believe there is a great body of evidence to suggest that a single payer system is not an optimal way to effectively deliver medical services.  It’s not sustainable.  It will ultimately bring more misery to a vast majority of people than it does anything else.  There is no long term economic basis for such a model to succeed and plenty of evidence that it would be a failure (one must look no further than the US Medicare program for an example).

I will freely admit that I am strongly opposed to virtually any health insurance reform proposal from Obama or the Democratic Party.  Yes, I will also freely admit that both House and Senate bills as they stood when they were passed, DO NOT IMPLEMENT SINGLE PAYER GOVERNMENT RUN HEALTH CARE.  The problem is that I CANNOT TRUST the progressives to stop.

This past summer I heard a congressman during a broadcast of a town hall meeting in Portland, Oregon that was moderated by Ed Shultz on his radio show.  Ed Shultz complained to the congressman that the House bill didn’t implement single payer and the congressman agreed, but also added that it was just the first step in eventually getting single payer installed.  President Obama and many other prominent congressional Democrats, such as Barney Frank, have said as much as well.

So, while this legislation itself may not implement a single payer system, it must be viewed and debated as though it does because those who support these bills wish it did, and will do everything they can to get it closer and closer to that objective.

The government has no Constitutional authority to be involved in the insurance or medical business in the first place.  A single payer system run by the government will absolutely bankrupt the country and result in degraded care for everyone.

I have even been presented with this argument:

You obviously do not know anyone on Medicaid.  Many doctors refuse to participate in Medicaid so that option is out for some patients.  Limits are applied to prescriptions so that you can only get so many filled a month.  Some patients have to pick and choose what to get filled.  The clinics that do accept Medicaid are like cattle calls.  Patients sit for hours and hours and see a doctor for less than 10 minutes.  But don’t dare complain or you will be told you are getting this for “free” so you can’t complain.

This argument is just laughable.  I don’t mean to be sarcastic, but this person just laid out perfectly why I don’t think I’d like to be pushed into another government run health care or insurance program.  Given government’s existing track record running Medicare and Medicaid, public schools, and the DMV (for examples), there is no sane justification for letting them run even more, especially a program that would even further regulate one sixth of the entire US economy.

Obamacare is unconstitutional

Some argue that Obamacare IS constitutional:

Funny how that little phrase “provide for the general welfare” gets left out of conservatives discussion of the Constitution.

I would like to refer readers to Federalist Paper VI where this clause of the Constitution is discussed by the very people who originally authored it.  I submit that many people, especially those who support massive health care reform, are misinterpreting it.  Its authors did not intend the meaning that many attach to it today, therefore the above snide remark about conservatives is empty and pointless.

The so-called welfare clause of the Constitution does not mean that it is the role of the United States Government to feed and clothe you and wipe your runny nose as some would seem to suggest.  If it did, then what need would there be for any of us to work and be productive other than to do so entirely at the command of government?  And how would that actually be providing for our welfare?

I’ll say it again, the United States federal government has no Constitutional authority to be involved in the insurance or medical business in the first place.  Yes, that also means that I think a great many of the federal entitlement programs are unconstitutional.  These are not among the enumerated powers granted to the federal government and are therefore reserved to the several states or the people themselves.  See the 10th Amendment to the Constitution for more clarity.

I have yet to hear or read any sound arguments that advocate for the passage of “Obamacare” that aren’t patently political and full of empty, emotional, political correctness designed to control free and serious debate.  If you know of one, please feel free to post it here.

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Further reading:

Why the Health-Care Bills Are Unconstitutional, Orrin Hatch, J. Kenneth Blackwell, and Kenneth A. Klukowski, January 2, 2010, Wall Street Journal

Category: Health Care
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