Congress Can't Repeal Economics

Townhall.com ^ | October 6, 2010 | John Stossel

[Kaslin]

It's raining! I don't like it! Why hasn't Congress passed the Good Weather Act and the Everybody Happy Act?

Sound dumb?

Why is it any dumber than a law called the Patient Protection and Affordable Care Act, which promised to cover more for less money?

When Obamacare was debated, we free-market advocates insisted that no matter what the president promised, the laws of economics cannot be repealed. Our opponents in effect answered, "Yes, we can."

Well, Obamacare has barely started taking effect, and the evidence is already rolling in. I hate to say we told them so, but ... we told them so. The laws of economics have struck back.

Health insurers Wellpoint, Cigna, Aetna, Humana and CoventryOne will stop writing policies for all children. Why? Because Obamacare requires that they insure already sick children for the same price as well children.

That sounds compassionate, but -- in case Obamacare fanatics haven't noticed -- sick children need more medical care. Insurance is about risk, and already sick children are 100 percent certain to be sick when their coverage begins. So if the government mandates that insurance companies cover sick children at the lower well-children price, insurers will quit the market rather than sandbag their shareholders. This is not callousness -- it's fiduciary responsibility. Insurance companies are not charities. So, thanks to the compassionate Congress and president, parents of sick children will be saved from expensive insurance -- by being unable to obtain any insurance! That's how government compassion works.

In 2014, the same rule will kick in for adults. You now know what to expect.

This is just the beginning of reality's backlash. President Obama promised that under his scheme no one will have to change medical plans, but some 840,000 Americans are already left without coverage because their insurer, the Principal Financial Group, decided to leave the market.

"(T)he company's decision reflected its assessment of its ability to compete in the environment created by the new law," The New York Times reports. "Principal's decision closely tracks moves by other insurers that have indicated in recent weeks that they plan to drop out of certain segments of the market ... ."

Last week's bombshell was that McDonald's may drop coverage for its 30,000 workers unless the Obama administration waives some rules. The central planners of the Obama administration decided in their infinite wisdom that all insurers should spend at least 80 percent to 85 percent of their revenues on patient care, a mandate aimed at minimizing administrative costs. It's natural to assume that higher patient-care ratios are better for consumers, but there's no proof of that. Health economist James C. Robinson explained years ago that "medical loss ratios" are just an accounting tool and were "never intended to measure quality or efficiency. ... More direct measures of quality are available."

The Wall Street Journal reports: "Insurers say dozens of other employers could find themselves in the same situation as McDonald's. Aetna Inc. ... provides (similar) plans to Home Depot Inc., Disney Worldwide Services, CVS Caremark Corp., Staples Inc. and Blockbuster Inc., among others, according to an Aetna client list."

McDonald's may get a waiver, but I like the Cato Institute's Michael Cannon's take on that: "Sorry, but I don't find it comforting that Obamacare gives HHS the power to waive these regulations on a case-by-case basis. Power corrupts. We've already seen HHS Secretary Kathleen Sebelius use other powers granted her by Obamacare to threaten insurers who contradict the party line."

In a letter to the trade group America's Health Insurance Plans, Sebelius wrote there would be "zero tolerance" for companies that attribute "unjustified rate increases" to Obamacare. "Simply stated," she wrote, "we will not stand idly by as insurers blame their premium hikes and increased profits on the requirement that they provide consumers with basic protections."

In other words: "We have repealed the basic laws of economics. Insurance companies must now give people more but not charge them for it. If you do charge more, you must not tell your customers why. Shut up, obey, and don't complain. We are your rulers."

[mountainlion]

I took economics in the 70’s and my economics book said we were in “post Keynesian” economics. Talk about trying to resurrect a dead horse.

[colorado tanker]

My prediction is the regime will adopt regulations that will force the insurance industry to commit economic suicide. It won't matter if they comply or not, they are dead. That will leave the field open for the only alternative, government run, single payer care. Which was the plan from the beginning.

And the idiots who run the insurance industry gave us this.

[ClearCase_guy]

There is an old chestnut about some state legislature which tried to simplify Pi by having officially declared to be "3".

We laugh, but what Obama is doing today is perilously close. It's just dumb -- and it's remarkable that politicians think it's a smart solution to a pressing problem.

[The Raven]

That's not what it says here:

[vikingd00d]

>>”(T)he company’s decision reflected its assessment of its ability to compete in the environment created by the new law,” The New York Times reports. “Principal’s decision closely tracks moves by other insurers that have indicated in recent weeks that they plan to drop out of certain segments of the market ... .”

This was Obama’s intent all along. Drive the private insurance companies out of business and leave no alternative to ‘single-payer’ socialized medicine. It’s pure evil.

[sickoflibs]

RE :”Well, Obamacare has barely started taking effect, and the evidence is already rolling in. I hate to say we told them so, but ... we told them so. The laws of economics have struck back. Health insurers Wellpoint, Cigna, Aetna, Humana and CoventryOne will stop writing policies for all children. Why? Because Obamacare requires that they insure already sick children for the same price as well children.
That sounds compassionate, but — in case Obamacare fanatics haven't noticed — sick children need more medical care. Insurance is about risk, and already sick children are 100 percent certain to be sick when their coverage begins. So if the government mandates that insurance companies cover sick children at the lower well-children price, insurers will quit the market rather than sandbag their shareholders. This is not callousness — it's fiduciary responsibility. Insurance companies are not charities. So, thanks to the compassionate Congress and president, parents of sick children will be saved from expensive insurance — by being unable to obtain any insurance! That's how government compassion works”

See, now this is a ‘teachable moment’. Very well put!

Next, let's repeal the laws of physics with Cap-and-Trade.

Ever see Republicans (congressional) talk like this?

[moodyskeptic]

Stossel has emerged as an important voice for common sense conservatism, and his history in Big Media makes him dangerous to the (newly fascist) Left.
And he speaks simply, like a true pro. Bravo!

We need ALL of our current voices: Newt for the brainy, Sarah for the moms, Rush for the truly informed, Huckabee for the TV viewers, Senise for the vets, Hannity for the moderates, Coulter for the fed-up, Steyn for the funny, Gutfeld for the gay, Beck for the libertarians.... all these folks, and many more, contribute greatly to the struggle to take our nation back from the lib socialist fools now running the country. The effort starts Nov. 2 and continues for a decade.

Stossel has the attention of many fence-sitters. He is an important communicator.

[mojitojoe]

If that happens, it’s time to get out.

[colorado tanker]

The problem is even if Congress goes Republican the regime has two more years to write all the Obamacare regulations. Repeal can't happen until 2012 because of Obama’s veto power. How can we get out of this vice?

[greeneyes]

If Pubbies win by wide enough margin in November, they can pull the teeth of this stuff by cutting the funding.

[rockinqsranch]

“.....Shut up, obey, and don’t complain. We are your rulers.”

Pretty much sums up the Obama Administration.

Let’s make it a short one.

[Cheerio]

Congress Can't Repeal Economics

They sure as heck try though.

[Cheerio]

If that happens, it’s time to get out.

Of the country? To where?

Quote: "If we lose freedom here, there is no place to escape to. This is the last stand on Earth."
Description: Ronald Reagan gives a speech in support of the Presidential campaign of Barry Goldwater. This helped Reagan start his career as a politician.

[colorado tanker]

If they’ve got the balls . . . .

[greeneyes]

LOL. Yep that is a big IF.

[SunkenCiv]

Thanks Kaslin.