There is No Hope - This Country is DONE!
Real Estate Investor · OH · Member since 2008 · 4k+ posts · 1k+ votes
I've sadly come to the conclusion that our country is done, over, kaput! I finally came to this conclusion over the weekend as we were circulating petitions to put a Constitutional Amendment on the November ballot in Ohio to stop Obamacare. As you know, I live in Ohio and in a somewhat rural area. This should be prime territory for conservatives. I was SHOCKED at the number of people that wanted Obamacare and many of these people should have known better. I heard comments like "now my son will have free insurance". It was absolutely apparent that these people think that Obamacare is free and comes from Obama's magical stash. They are too STUPID to understand that someone must pay for this stuff and there are a LOT of these people.
Therefore, I'm sorry to report that the USA as we've know it is OVER!
While I am not a fan of government subsidies, I do need to point out that pre-existing conditions are not analagous to getting car insurance after an accident.
Insurance is designed to transfer the risk of uncertainty in return for a fee - the premium. Once you have a car accident, there is little uncertainty over its costs (unless it is one of those rare accidents that results in a large lawsuit). It is therefore not insurable in the economic sense of the word.
Pre-existing conditions are different in a couple of ways. First, everyone is going to have some health condition at some point in their lives that would become "pre-existing" from that point onwards and therefore is not like an avoidable accident. Second, even after you have a health condition, there is a wide range of expenses that you can incur related to it. (For example, you could have hypertension and die of something else with no unusual expense related to your hypertension.) Therefore, pre-existing conditions do make sense for insurance coverage.
The reason why insurance companies have traditionally avoided covering pre-existing conditions is not related to their inappropriateness for coverage but to something called "adverse selection." This refers to the risk of the first insurance company that covers a particular risk ending up with all the people who have that condition, thus driving up its costs and premiums, and then losing all its healthy patients due to the high premiums, consequently necessitating it to raise premiums again, etc. This vicious cycle can continue until the insurance company goes out of business.
That's why insurance companies try to have a "healthier" patient base than their competitors and this also, unfortunately, creates a cycle of each company trying to have a healthier base than its competitors, thereby making insurance harder and harder to get for everyone. That's the situation we were in and a simple solution to eliminate the race to the bottom AND the problem of adverse selection is to pass a law preventing insurance companies from denying someone based on a prre-existing condition.
Insurance companies are actually quite happy with the rule that does not allow them to deny patients based on pre-existing conditions because it increases their revenues and profits. It makes perfect actuarial sense to them. The problem that I have with Obama's health care plan is that it does not do much to address the primary health care problem in this country, which is that costs have gone out of control due to a variety of market distortions.
I think the problem with health care is that it has not been a normal free market until now and as a result we pay about 1/6th of our earnings for health care and get about the same result as other countries do at half the cost. Therefore, the system did need change.
The ideal change, of course, would have been to fix the impediments to a free market instead of making it more regulated. But I have noticed throughout the world that voters don't actually vote in favor of free markets so democracies seem doomed to move in a socialist direction, as is happening here now.
Interestingly, I was recently looking at per capita GDP data for Europe and found that the more socialist Northern European countries are actually richer than the better-known countries of Europe. Even if we were to exclude Norway due to its large oil revenues, the rest of Scandinavia is wealthier than Germany, France, the U.K., etc. So maybe socialism isn't as bad for an economy as one would think, although it is unpleasant from the perspective of individual economic freedoms. (The Northern European countries do have an excellent record when it comes to social freedoms, though.)
From what I understand, the Obama plan doesn't socialize or nationalize health care--the private companies still exist, but they won't be able to deny coverage to people with pre-existing conditions. What his plan does is provide subsidies to people who earn less than a certain amount each year, so that they can buy health insurance.
MikeOH and others- If you didn't listen to this a couple days ago. If you think the people youtalked to were misguided, you have to listen to the 2 and 1/2 minutes. These people can vote, yet have no clue!!! Rich
http://www.youtube.com/watch?v=Jg0pDPK56Ys
Mike - does this mean you're going to sell off all your rentals and move to a different country?
Why is it that people complain about socialized health care but not about socialized education?
From a political perspective, what's the difference?
Socialized education, from a political and economic perspective, is much worse than socialized health care because you end up with lower quality voters and therefore lower quality laws on pretty much every subject.
A democracy is only as good as the average voter and right now that average seems pretty low.
The US has had programs like food stamps and public housing for decades now. I don't see why subsidizing health care is radically different from from those other programs.
This isn't POVERTY POCKETS, this is BIGGER POCKETS! Wealth, gain, money, success, choice, options - that's what we're about here! Get your heads out of your bleeding hearts and start listening to yourselves for crying out loud!
That's exactly the problem. People should not and DO NOT have a RIGHT to healthcare or any other product. If they don't work and can't afford it - they shouldn't get healthcare! If they don't work and can't afford it - they shouldn't get food! If they don't work and can't afford it - they shouldn't get a place to live! If they don't work and can't afford it - they shouldn't get a free cellphone!!! What we need in this country is the FREEDOM to choose to be lazy and then suffer the consequences!!!
"Subsidized" - I love that word. It's what the socialists say when they TAKE from my family and give to some lazy deadbeat scumbag!
The answer is YES, Tim will eventually be forced to join the public healthcare plan, as will everyone else. The Socialist in Chief will use healthcare to destroy private insurance (through regulation that will make private insurance unprofitable and through competition with the public option that can lose money indefinitely).
While I am not a fan of government subsidies, I do need to point out that pre-existing conditions are not analagous to getting car insurance after an accident.
Insurance is designed to transfer the risk of uncertainty in return for a fee - the premium. Once you have a car accident, there is little uncertainty over its costs (unless it is one of those rare accidents that results in a large lawsuit). It is therefore not insurable in the economic sense of the word.
Pre-existing conditions are different in a couple of ways. First, everyone is going to have some health condition at some point in their lives that would become "pre-existing" from that point onwards and therefore is not like an avoidable accident. Second, even after you have a health condition, there is a wide range of expenses that you can incur related to it. (For example, you could have hypertension and die of something else with no unusual expense related to your hypertension.) Therefore, pre-existing conditions do make sense for insurance coverage.
The reason why insurance companies have traditionally avoided covering pre-existing conditions is not related to their inappropriateness for coverage but to something called "adverse selection." This refers to the risk of the first insurance company that covers a particular risk ending up with all the people who have that condition, thus driving up its costs and premiums, and then losing all its healthy patients due to the high premiums, consequently necessitating it to raise premiums again, etc. This vicious cycle can continue until the insurance company goes out of business.
That's why insurance companies try to have a "healthier" patient base than their competitors and this also, unfortunately, creates a cycle of each company trying to have a healthier base than its competitors, thereby making insurance harder and harder to get for everyone. That's the situation we were in and a simple solution to eliminate the race to the bottom AND the problem of adverse selection is to pass a law preventing insurance companies from denying someone based on a prre-existing condition.
Insurance companies are actually quite happy with the rule that does not allow them to deny patients based on pre-existing conditions because it increases their revenues and profits. It makes perfect actuarial sense to them. The problem that I have with Obama's health care plan is that it does not do much to address the primary health care problem in this country, which is that costs have gone out of control due to a variety of market distortions.
It seems to me that it may be the case that health insurance just won't work in a for-profit or free market model. In the free market, aren't companies supposed to compete with each other to provide better services and/or lower prices for the customer? Health insurance in the US seems to do the exact opposite.
Even in states (Florida) where health insurance isn't regulated heavily, the choices you're offered for individual plans are all crap.
They've had their chance in the last 20 or 30 years since HMOs, etc. started popping up to try it this way. It hasn't worked. It doesn't seem like a viable business model if they have to screw the customer over with practices like recission in order to make a profit.
I agree Vikram that the problem with the Obama plan is that it doesn't do anything to control costs over the long run. It's a bandaid solution.
"Thank you for clarifying. So I guess you believe that we should do away with public education in this country (just like we shouldn't have public health insurance)?"
American education - absolutely. Going back to the original post - it's clear from Mike's example that it's a failed system. It's a relic of the industrial age socialism that trains people to be lifetime workers and debtors which is de facto slavery. It's a failed system. Give people back the money the government is stealing to subsidize failing performance and let the free market determine the pay of the best teachers. People that care will pay for the good teachers. You'll get good teachers again this way.
"Assuming that's your belief, do you think childhood education should be legally mandatory or should it be optional?"
It is optional. You can opt out of the system.
"Rich/Mike - Should I assume you agree with Tim on this?"
They can speak for themselves if they care, though this topic has nothing to do with the thread at hand.
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Insurance companies are actually quite happy with the rule that does not allow them to deny patients based on pre-existing conditions because it increases their revenues and profits. It makes perfect actuarial sense to them.
Great post, Vikram!
Do you want to argue that drug companies aren't profitable? Do you want to argue that this regulation is going to drive all the drug companies out of business?
If not, what evidence do you have to support that statement you made above about regulation driving all the health care companies out of business?
OK, if you want to play that game. Would you like to first show evidence to support that private companies would make more profits if they had to insure anyone that applied for coverage regardless of their medical history? This is the theory that you have supported through Vikram, correct? Does this have a basis in reality? Let's see the data on that.
You are correct that free markets don't cease to exist just because of government regulation. However, as a result of goverment regulation, a private sector could be put completely or almost completely out of business. A prime example of that would be the student loan industry.
Your example with the drug companies is a poor one, however I will humor you by saying if the the government produced its own drugs to compete with the private sector, it would drive private drug companies out of business because the government could afford to sell drugs at a loss and still continue to operate. Unless our government has started making and selling drugs, this is impossible.