A Careful Look at Issues

When it comes to saving health care costs, nothing beats dying young. Obamacare requires insurance carriers to ignore pre-existing conditions and health risks, with one exception. Being a meth addict or terminally ill will have no effect on an individual’s premiums, nor will a passion for base jumping or tightrope walking. But the line is drawn at smoking. Insurers, subject to state regulations, may tack on up to 50% of the unsubsidized premium on to an insured person’s insurance bill. Since the subsidy may be 90% or more, the effect is to increase the bottom line by up to a factor of ten in the worst case. The oddest part is that smoking actually decreases life time health care costs.

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Obamacare is now unraveling. Over five million people have lost their health insurance, and if they manage to log on to the government website, many are finding policies with twice the monthly premiums and twice the deductibles. Young people are being encouraged to sign up for expensive policies. They are told it would be foolish to be uninsured, so never mind the price. The question is then: At what price is health insurance not worthwhile? As President Obama says, it’s complicated. But for some, going without insurance is a better bet than it might seem.

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“Money should not go to Planned Parenthood because money is fungible and can be redirected to support abortion.” No, sorry, money is not fungible and government accounting rules see to that. “If Planned Parenthood is not funded, women will die because there is no other way to get health services.” No, sorry, there are many health service providers. The arguments echo the controversy over faith-based initiatives, in which Liberals argued that money given to churches for any purpose amounted to supporting religion.

Democrats are fond of reminding us that Obama made no secret of his radical leftist agenda when he ran for President. Conservatives are fond of replying that they saw it coming. What this exchange misses is the role that promises of transparency and bipartisanship played in the election. Independent voters did not react to the leftist agenda because Obama promised that whatever he did would be tempered by a process that exposed all of the political dealings and by the need to get Republicans to agree. He might or might not want to nationalize everything in sight, it was no matter because he would have to get many Republicans to agree. The claims of transparency and bipartisanship effectively moved Obama from the left to near the center of American politics.

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In the health care debate, liberals are fond of citing polls that show, they say, that people like individual aspects of Obamacare, but do not like the package as a whole. They conclude that voters are behaving irrationally, because if all the parts are good than obviously the whole must be good. From this line of reasoning, they deduce that if Congress passes Obamacare, then people will realize they really liked it all along. Alas, the logical premise is false. There are valid reasons why one might like the parts, but not like the whole.

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Advocates of increased government involvement in health care frequently cite the profits of private health care providers as a major part of the costs of health care. The numbers, however, show that health insurance and managed care industry profits are 0.36% of the national bill for health care. If the compensation of industry executives is added as part of the alleged problem, then the industry accounts for 0.37% of total costs. The notion that industry profits are responsible for rising health care costs is a fraud.

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I think it is possible for government to compete fairly with private enterprise, although I cannot think of an instance where it has happened. When the question is posed, what first comes to mind are subsidies by taxpayers to the government operation. That’s true, but there are also issues of access to and the cost of capital, costs of building market share, equatable rules of competition, and the risk of failure. All of these factors must be taken into account when considering if there is level playing field. I’m here to help.

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