We told you so!

From The Pirate’s Cove:

Prepare For The ObamaCare Sticker Shock

By William Teach | January 23, 2013 – 8:02 am

We haven’t discussed the idiocy of ObamaCare lately, legislation which the majority of Americans still despise. But, it’s still out there and ready to cause havoc

(Forbes) A California insurance broker, who sells health plans to individuals and small businesses, told me that she’s prepping her clients for a sticker shock. Her local carriers are hinting to her that premiums may triple this fall, when the plans unveil how they’ll billet the full brunt of Obamacare’s new regulations and mandates.

California is hardly alone. Around the country, insurers are fixing to raise rates by double digits. They’re privately briefing politicians in Washington on what’s in store. Those briefings are leaving a lot of folks up and down Pennsylvania Avenue jumpy.

What’s gives? President Obama, after all, said he’d prevent these sorts of prices. His new health law gave state regulators the power to block premium increases. It even created a federal agency to oversee insurance rates. But these bureaucrats are spectators to the price hikes. They’re mere wallflowers. Even in the bluest of states.

Their silence is the best evidence of who is culpable for the increases. It’s the policymakers. It’s Obamacare. The President is accepting the premium hikes as an allowable consequence of his healthcare policies.

President Obama’s top economic advisers attend a formal dinner at the White House. From left to right: Gene Sperling, Alan Krueger and Jacob Lew. Mr Lew has been nominated to become the next Secretary of the Treasury.

More at the link.

We were assured by the President and his top economic advisers that the Patient Protection and Affordable Care Act was going to reduce the growth in health care costs, and make our health care system more efficient and manageable. We were going to be able to cover an additional thirty or forty or fifty million people who did not previously have health insurance — primarily because they couldn’t afford it — through the private health insurance system, we’d require private health insurance companies to cover things which they previously would not, and everything would be great.

The reasoning was simple: since the previously uninsured would no longer get their medical care through visits to hospital emergency rooms, visits for which hospitals frequently went unpaid, and almost everybody would have health insurance, costs would decrease. That adding tens of millions of people who could not previously afford private health insurance to private health insurance rolls would somehow have more than a minor additional cost was simply the overly-excessive, and probably politically-motivated, worrying by conservatives.

We noted previously the increases in taxes Governor Jan Brewer (R-AZ) is contemplating to finance just the increase in Medicaid caused by the PP&ACA, and predicted that we would see more news reports along those lines, from other states, in the future. As much as your Editor would like to claim some great prescience, this was as difficult as predicting that the sun would rise in the southeast this morning.

And now, Mr Teach tells us that, unexpectedly enough, private insurance companies are going to have to raise their premiums. The President and his economic team assured us that the addition of tens of millions of new customers to the private insurance market would yield more premium savings, as the insurance companies had to compete for these new customers. Your Editor, who lacks the curriculum vitae of Jacob Lew, current White House Chief of Staff and the President’s nominee for Secretary of the Treasury, a graduate of Harvard University and Georgetown University Law Center, was somehow able to understand that the PP&ACA meant that the insurance companies would not have to compete for customers, and that such would not lower individual insurance premiums.

In businesses where you have a choice to not buy at all, the competitors must not only compete in price with each other, but keep their prices low enough so that there will be enough people who want their products more than they want the number of dollars it will cost them. With health insurance mandatory, that part has been removed from the equation: the health insurance companies know that virtually everyone has to buy, so they can raise prices. They don’t need to collude on this: one company taking the initiative will be followed by the next, and the next, and so forth, and that is perfectly legal.

It’s simple enough to see in practice: just ask yourself whether automobile insurance is reasonably priced. The insurers know that you have to buy, so the market is established. There is a bare-bones market for the (economically) poorest drivers, something which will keep drivers just barely legal, but such a bare-bones alternative is not allowable under the PP&ACA. There is a comprehensive auto insurance market, which new car buyers must use, because lenders will not allow drivers to borrow money to buy a new car if an accident destroys the collateral for the loan. And there’s a liability market, which is middle-range coverage, for people who would rather risk having to replace their own car if it gets destroyed, but want reasonable coverage for their other liabilities, should an accident occur. Without the mandatory automobile insurance laws, the bare-bones market would disappear.

The PP&ACA doesn’t allow the bare-bones version, the way the states allow the poorest drivers to manage to stay legal for less. The PP&ACA has not only decided that everyone should have good coverage, but the Department of Health and Human Services, as it has written the various regulations to flesh out the law, has insisted on adding many things that a lot of people wouldn’t normally choose to buy. HHS has, in effect, not only prohibited the bare-bones version, but has laden so many things onto the law that the middle-of-the-road insurance plans are moving closer in coverage and costs to the high-end insurance. In their zeal to Do Good, the bureaucrats at HHS have given us a narrow range of legal insurance, which has to come at a higher cost, and there is really no reason for insurers to compete.

Some might quibble with your Editor’s assessment of that, but he will be proved right, or wrong, not by debate, but by the costs of health insurance going forward. If the costs decline, or simply hold steady, then your Editor will have been proved wrong. But if the premiums charged by health insurance companies continues to rise at a rate greater than inflation, then I will have been proved right. I am perfectly willing to have my judgement measured on that scale.

19 Comments

  1. That assumes Obamacare was ever about sound economics in the first place. It wasn’t. It was about POWER. The left wingers wanted to control our health care, and now they have. They get to dictate what kind of insurance we have, and pretty soon they’ll be telling us what doctors we can see and what treatments we can or can’t get.

    The only place where economics comes in is that their plans will eventually lead to rationing. That’s the only way they’ll be able to contain costs. And if Granny needs her hip replaced, or Grandpa needs a heart transplant, well, too bad. We can’t afford it, so suck it up and go without.

  2. There is nothing that can be said of the occupant of the house @ 1,600 pa ave. dc that would surprise me.

    Right, but what does that mean? How does that help us beat the left wingers?

    The left wingers win because they claim to be morally superior to us. We can argue economics all we like, but that still doesn’t win the battle. We have to defeat these left wingers on moral terms.

    Now, how do we do that?

  3. No, we don’t have to defeat the Left Wingers. We have to defeat the Quisling statist Republicans. Without the Quislings (like John McCain, Lindsey Graham, et al) propping up the Socialists, the Socialists will fall from their own weight and dilapidated foundation.

  4. No, we don’t have to defeat the Left Wingers. We have to defeat the Quisling statist Republicans. Without the Quislings (like John McCain, Lindsey Graham, et al) propping up the Socialists, the Socialists will fall from their own weight and dilapidated foundation.

    No, we have to defeat the scum, first. Engaging in a circlar firing squad against Republicans will not work. They may not be on our side entirely, but they are a lot more on our side than the scum.

    We need to defeat the pigs. That means enlisting every Republican we can, not alienating Republicans just because they are not ideologically perfect.

  5. You and I will have to agree to disagree, because I’ve seen what “pragmatism” gets us. It gets us John McCain. It gets us Mitt Romney. It gets us Bob Dole. It gets us US Senators who vote to approve anti-constitutional Supreme Court Justices.

    No, you and I will have to agree to disagree else I blow up…

  6. John, we will never have an ideologically perfect GOP. Reagan understood this. I just don’t like the idea of engaging in “Purges” because, 1) It uses up a lot of energy that we could be using to fight the scum, 2) It is more priductive to try to persuade the “Moderates” than to attack them, and 3) Infighting just weakens us, and strengthens the scum.

    Remember, McCain has a pretty good conservative record overall. He is 100% Pro-Life, for example. He only went wobbly on a few issues, like immigration and campaign finance reform. Granted, he could have made a better presidentrial candidate, but I’m not sure we could have won in 2008 given the conditions on the ground. He is still a pretty good senator, and has shown his willingness to get tough with both Susan Rice and Hillary Clinton. At any rate, it is much better to have him in the Senate than a liberal or (God forbid!) a left winger.

  7. Remember, McCain has a pretty good conservative record overall.

    Remember, John McCain is Left Of Center and “California Conservative” is to “Conservative” as “politically correct” is to “correct”.

    I am a nominal Republican. I am Conservative first and foremost. I am only Republican because there is no viable Conservative Party at present. I have no loyalty to the Quisling Republican Party. None, whatsoever.

  8. Like I said, I really don’t want to get into it with you (possibly too late) because I don’t want to blow up on you. When it comes to politics, the Constitution, the country, Conservatism, I’m a pit bull. I’m no politician or bureaucrat or paper pusher. It’s not in me to be that way. I lay the smack down, and take matters very seriously.

  9. Remember, John McCain is Left Of Center and “California Conservative” is to “Conservative” as “politically correct” is to “correct”.

    McCain is from Arizona, not California. And what about his record OVERALL is “Left of center”? Please be specific.

  10. I lay the smack down, and take matters very seriously.

    So do I. You may have read some of my pieces here to that effect, such as “Is the Left evil (in which I answer in the affirmative and give lots of examples why) or the letter I wrote to Dennis Prager in which I refuted the notion that the Left is “naive” and pointed out their true agenda.

    But to win, we got to win smart. And calling guys like John McCain “Quislings”, I’m afraid to say, isn’t smart. Do you want to be “Right”, or do you want to win? I’m afraid that your approach might lead us to having maybe 20 Senators with perfect ideological purity and no one else. And probably never winning the presidency again.

    Reagan and Gingrich were our two best leaders in recent times. Neither was ideologically perfect, but they both got a hell of a lot done. Reagan defeated Communism and Gingrich balanced the budget and reformed welfare. Those are the kind of guys we need in the future, guys who not only believed in conservatism, but who, more importantly, accomplished it.

  11. Equating John McCain, a Left of Center DIABLO whom I already knew was from Arizona (and didn’t tie California Conservative to), with Reagan and Gingrich is just plain nuts. The Quisling Republican Party and the Quisling John McCain aren’t fit to tie those two Conservatives’ shoes. And giving moral support to Quislings will never provide the necessary impetus to bring forth new Conservatives.

    Now, tell me, since you refuse to let it go, who did I call a California Conservative? Someone I knew hails from Arizona? Or someone I know hails from California?

    AND LET IT GO ALREADY, CALIFORNIAN.

  12. i would also add that I am much more put out by the likes of Colin Powell than I am by John McCain. Powell was given two very prestigious jobs by two Republican presidents (both named Bush) and he repays that loyalty by what? Endorsing Obama twice? Going on left wing shows like MSNBC and trashing other Republicans?

    What I don’t get is why does Powell even claim to be a Republican at all? Even if he insists on being called a “Moderate”, what is even remotely Republican about Obama’s tax policy? His spending policy? His deficit policy? He’s not just endorsing a Democrat, but the most left wing Democrat in history!

    If anyone deserves to be called a “Quisling”, it’s Powell, not McCain.

  13. Equating John McCain, a Left of Center DIABLO

    But WHY is he “Left of center”? You haven’t been able to offer any facts to back up this charge.

  14. My refusal to offer facts does not, in any honest book, equate to an inability to do so. But you went there.

    Since you’re incapable of letting it go, even after my repeated requests to do so, I’ll be the better man and let it go. If you comment again after this, you’ll get the last word in.

  15. Right, but you can’t make a provocative statement and then say “I don’t want to talk about it.”

    Fact is, if conservatives want to win in the future, we have to have these conversations. If you’re going to accuse John McCain of being a “Quisling” (a VERY serious charge, since “Quisling” basically means “traitor”), then you have to defend it.

    Point is, I don’t want to be on this blog 20 years from now ranting about how nothing ever seems to get done. And, I suppose, neither do you. I’m serious about WINNING, and winning requires teamwork, cooperation. If conservatives can’t work together, if instead we lock ourselves up in ideological fortresses and self-satisfyingly say “I’m right, and everyone else is wrong”, then we lose. And the left wingers win.

    I don’t want that.

Comments are closed.