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With the Sen. Ted Kennedy’s passing, there is a renewed vigor on the part of Obamacare (henceforth referred to as Kennedycare) proponents to get something done for the sake of getting something done. We have heard that we need to get this done to honor the memory of the “Liberal Lion of the Senate.” But this is an attempt to divert attention away from the real issue at hand: Health care reform is not about Ted Kennedy or honoring his memory, health care reform is about passing legislation that will lead to the biggest boondoggle in our nation’s history.  Government run health care was a bad two weeks ago, it was a bad idea the day before Kennedy passed on and it is still a bad idea today! If we are really intent on honoring the memory of a long-serving elected official like Kennedy, then perhaps we should start with an honest assessment of what he has done with health care so we can correct the real problems in the system and correct rather than compound his mistakes.

In the 1970’s, it was Kennedy himself who offered the nation health care reform to solve all the problems of the day. He supported, fought for and helped pass legislation that created Health Maintenance Organizations (HMOs), which would end the health care woes people faced. Fast forward to the 1990’s, and already things were coming apart at the seams. There was the failed push for Hillarycare, to address the problems that largely arose from those very HMOs that were going to save health care in America. Hillarycare was going to be the fix for the fix, but the people realized that government would “fix” things all right, and rejected it. We are seeing history repeat itself as the majority of Americans are now opposed to Obamacare.

We do not need another government fix to solve problems caused by the last government fix. Using history as a guidepost, we already know what happens when the government moves in to “fix” something. Health care is only one example, and we can see a similar track with campaign finance reform, which has required legislation to fix the damage caused by the last fix. And now, some are starting the clarion call again for more campaign finance reform, another government fix to address problems caused by the last fix for a fix. Focusing back on health care, what will happen if this current bill is passed?

To start, the government will seize control of the entirety of the health insurance industry. This will happen because the legislation requires all citizens to purchase a government approved plan under the threat of excessive penalty. So, every private insurer will be forced to offer a plan meeting with whatever standards the government sets, removing the insurer’s ability to set coverage based on factors like demand, feasibility and profitability. Additionally, the bill requires insurers to charge the same premiums to every person, regardless of their health background. This would be like forcing auto insurers to charge the same premium to a person who has 15 accidents over the last five years as a person with zero accidents in that timeframe; it is not financially feasible.  Another provision in the bill, which has been completely overlooked so far by most, authorizes the Health Choices Commissioner to set the medical loss ratio for insurance providers. This ratio is the amount of money taken from premiums and applied directly to medical care expenses. Most companies run a ratio in the 70-75% range, with the remaining money representing profits and paying for administrative functions such as employee compensation. In effect, the government will have the final say over how much “private” companies can allocate for compensation and how much they are allowed to take in as profit.

In tandem with the two provisions above, the government will create a public option or cooperative or whatever other term is used to disguise it, to “compete” with the private insurers and to provide insurance for those who cannot otherwise afford it. Does any of this sound remotely familiar to anyone? A government sponsored entity that will offer a service to people who otherwise could not afford it? Haven’t we seen this movie before when it starred Freddie Mac, Fannie Mae and the entire financial industry? And what reason have we to expect a better outcome this time?

What will happen with the government option/coop is that it will steal business from its private competitors. A government option will be run based on political, not financial considerations, and will have the advantage of unlimited funding. While the government option will be able to run a loss and stay in business (after all, the more money a government program loses, the more funding it inevitably receives), the private competitors will still have to deal with the bottom-line. Private companies will find it hard to offer the same services as the government option at a similar cost – the government will be able to undercut them every time. Add in the fact that the government will be calling the shots and determining the coverage and premiums that these “private” companies must offer and the picture is even bleaker. Then add in that the government will determine how much the “private” insurers can allocate for administrative costs and how much profit they are allowed, and these companies face an impossible battle. They are going to be in direct competition with the same body that is writing the rules they must play by while not necessarily being bound by those rules.

As these companies are unable to compete with the government option, they will begin to suffer financially and many will face bankruptcy. It is at this point that these companies will begin to cry out for federal aid. They will rally behind the “we’re too big to fail” war cry. They will point to the bailouts for the financial and auto industries and say they deserve the same. Private health care companies will be faced with the choice of complete bankruptcy or government “assistance.” The government, of course, will happily oblige, all the while blaming the free market for failing again. Companies that need assistance will receive it, and those that do not will probably be strong-armed into taking it as several banks were forced to accept TARP funds. Once the bail outs are in place, the government will exercise the same power they have wielded in the financial sector and the auto industry. The government takeover of health care will be complete in name as well as in fact.

This is the point at which we will begin the move towards the single-payer system that Obama, Kennedy, Barney Frank and other Democrats have publically stated their support for in the past. This is the same kind of system that, in Great Britain, decides who will get what treatment based on the overall cost and how productive a person is expected to be moving forward. Under the British system, there is a panel that determines the value of a person’s life – roughly $45,000 per year at this point – and that is the basis for deciding who lives and who dies. As it relates to the U.S., the government will have demonstrated that “the free market has failed” once again and that only government can run health care for the country. This is the same pattern we have seen recently with the financial sector and the auto industry; the government over-regulates an industry to the point it cannot function in the free market, blames the free market for the failure, and then comes up with a fix that relies on even MORE government regulation.

We know that our health care system is broken and needs to be fixed; no one is arguing that point. Nor is anyone arguing, as Obama and his allies claim, that we should do nothing. We do need to take action, but it needs to be limited in scope and targeted to specific problems in the system. Injecting government control into the industry and further removing it from the free market principles it needs to follow to succeed is not going to solve any of the problems we face. This legislation will only compound the problems, as the last fix did, and will lead to a system that no one will want in the end. Sadly, by the time proponents of Kennedycare realize that we were right; it will be too late to change it.

Well it is up to real Americans to get the truth out about Ted Kennedy and what a low-life he really was. This glorifying this man who was a drunk, took a young woman's life, tried to undermine President Reagan and many other misdeeds needs to be made public for all to see. To hell with that man's memory.

>> jackjr60

Wednesday, September 2, 2009, 4:50 pm