creators.com opinion web
Liberal Opinion Conservative Opinion
John Stossel
John Stossel
15 Oct 2014
Crumbling Constitution

Does the Constitution still matter? When it was written, Ben Franklin said the Founders gave us a republic, "… Read More.

8 Oct 2014
Poverty

Fifty years ago, President Lyndon Johnson declared "War on Poverty." It sounded great to me. I was taught at Princeton,… Read More.

1 Oct 2014
It's Better Now

Americans now face beheadings, gang warfare, Ebola, ISIS and a new war in Syria. It's natural to assume that … Read More.

Congress Can't Repeal Economics

Comment

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debated, we free-market advocates insisted that no matter what the president promised, the laws of economics cannot be repealed.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 (http://tinyurl.com/2c8fnqr). "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 to85 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."

John Stossel is host of "Stossel" on the Fox Business Network. He's the author of "Give Me a Break" and of "Myth, Lies, and Downright Stupidity." To find out more about John Stossel, visit his site at <a href="http://www.johnstossel.com" <http://www.johnstossel.com>>johnstossel.com</a>. To read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.

COPYRIGHT 2010 BY JFS PRODUCTIONS, INC.

DISTRIBUTED BY CREATORS.COM



Comments

14 Comments | Post Comment
i suspect that the Obamacare people want the insurance companies to disappear. The next step is to claim that "private insurance companies simply cannot do what needs to be done" and the government needs to step into their place.
Comment: #1
Posted by: LINDEN MALKI
Tue Oct 5, 2010 7:03 PM
When something doesn't make logical sense, it is because there is another reason - my guess, this is all just their way of getting to a "single payer" system - they can't directly pass "single payer" legislation - so they create an enviornment that makes it impossible for the private insurance companies to be an option - if there is no private insurance to pick from, then we have to go to the governments system.
Comment: #2
Posted by: Eric Zyk
Wed Oct 6, 2010 7:34 AM
Re: LINDEN MALKI
Yes, this one is a case of INTENDED CONSEQUENCES. And this also explains why Kucinich sold out after his ride on Air Force One. Obama must have told him that Plan B (universal single payer) would have a higher chance after Plan A "failed".
Comment: #3
Posted by: C. Rakish Spagaletto
Wed Oct 6, 2010 8:29 AM
All part of the plan.
Comment: #4
Posted by: AlanR
Wed Oct 6, 2010 9:25 AM
I usually agree with John, but what do parent with sick kids do? There are many new stories about parents that have a child that has benn denied insurance even though other children in the family are covered. I challenge John to find one of those families, and get the kid insurance the family can afford.
Comment: #5
Posted by: Janice
Thu Oct 7, 2010 6:54 AM
If we are going to win this battle of ideas, then we need to change the hearts and minds of people who don't agree with us. Referring to the healthcare bill as "Obamacare" automatically raises the defenses of people who have been sucked in by the "cult of personality".

If we are going to win the hearts and minds of President Obama's supporters, I suggest we will stand a better chance if we refer to the president by his proper title - "President Obama" - not merely "Obama" - and if we refer to this gawdawful bill by any other term than "Obamacare"
Comment: #6
Posted by: Scott Hussey
Thu Oct 7, 2010 7:06 AM
"I challenge John to find one of those families, and get the kid insurance the family can afford."

It's not an issue of affordable insurance. As is stated ad nauseam, the purpose of insurance is to cover an incidence of the unexpected. If someone's already sick, you're not buying insurance, which *insures* you against a particular unexpected loss. Instead, it becomes a care plan for which someone else picks up the tab, which is really an abuse of the very idea of insurance. This is a chief cause of the rising cost of health insurance.

The issue, though, isn't affordable insurance. The issue is affordable *care*. A family with a sick kid doesn't need affordable insurance. They need affordable medical care that won't break the bank. The current system, however, masks the costs of healthcare and consumers spend willy-nilly under the guise of insurance. Consumers overuse healthcare because they don't respect the costs of the care, and prices overall go up. If prices aren't allowed to adjust, the only remaining fallback is rationing.

The trick is, as John has pointed out, ObamaCare isn't causing prices to fall or care to become more easily procured. In fact, it's only making the current system worse. And the current system is the system that has produced unaffordable *care*.

So you may accuse John of being cold, but he's not suggesting that we leave the poor or needy out in the cold. None of us are. His point, and ours, is that the current system will not satisfy the needs of consumers, period, to say nothing of the more needy. Instead, it will leave them out in the cold as insurers either raise their prices out of necessity or else simply drop whole portions of the market. In short, we all lose.
Comment: #7
Posted by: Kevin
Thu Oct 7, 2010 7:54 AM
If you want to see a story about a woman who is already being denied care under Obamacare, and the federal 'evidence based guidelines take a read of her story here : http://lotustom.blogspot.com/2010/09/sob-story-for-montini.html
Comment: #8
Posted by: Thomas Purcell
Thu Oct 7, 2010 10:23 AM
If you want to see a story about a woman who is already being denied care under Obamacare, and the federal 'evidence based guidelines take a read of her story here : http://lotustom.blogspot.com/2010/09/sob-story-for-montini.html
Comment: #9
Posted by: Thomas Purcell
Thu Oct 7, 2010 10:24 AM
"Shut up, obey, and don't complain. We are your rulers." - Stossel's paraphrase is so very right on! Rulers are exactly what government is no matter what euphemism politicians like to use - "servants of the people", humbug!
And being ruled by others in order that there be orderly interactions between individuals is *not* an automatic conclusion stemming from the nature of human beings. Society, just like any other natural system can be naturally self-regulating by means of interactions between its members, if only humans seek to discover and are allowed to implement the methods by which such self-regulation can be effective, rather than continuing to embrace social systems that need to be constantly held in an unnatural (and very unoptimal) state of balance by the operations of their rulers and other influencers. Individual self-order without rule by others is the social system whose members are fully adult (particularly meaning self-responsible) humans. Just as people can become physical adults, so can they become psychological and social adults - if only they are allowed (and even required in the sense that they will not achieve their desires unless they do) to socially mature sufficiently.
The basis and methodology: "Social Meta-Needs: A New Basis for Optimal Interaction" - http://selfsip.org/fundamentals/socialmetaneeds.html
Comment: #10
Posted by: Kitty Antonik Wakfer
Fri Oct 8, 2010 6:45 PM
airlines , oil companys industrys like pepsico merge not just so they can be more profitable but also so they can have a more broader & larger customer base. lots of companys build multi million dollar buildings fill them with more multi million dollar equipment to produce low price products such as items u find in dollar stores. people dont buy health care because its just to expinsive its starting to get so not even the middle class cant afford it pretty soon no one who makes less than 2 million a year will be able to afford it i dont see it not getting there. kevins right we need to stop calling it insurance & start calling it healthcare & it needs to be 500% more inclusive hospitals clinics & healthcare ins. companys need to merge & start to be more inclusive instead of collecting alot of money from a few people collect a little money from every single individuale who holds a job starting from age 16 . For example in the houston area there are 5.8 million people if there was an average of 4 people per house hold thats 1.45 million families most famillies have both parents working even if one held a part time minimum wage job & some families have children who hold part time minimum wage jobs while there in school & in college but lets go with 1.45 million families with only 1 family member working if that person pays out $15.00 & the employee payed out another $15.00 thats $30.00 times 1.45 million thats $43,500,000.00 a week thats 174,000,000.00 a month thats 2,088,000,000.00 a year. thats just based on one family member not every body goes to the doctor every day & yes theres a lot of ill men women & children but there are more healthy people than ill people do the math if every body pitched in everybody can get 100% healthcare including meds . everybody paticipated the bourden wouldnt be so hard on the few. way lower premiums means everybody can participate all companys can participate independent truckers contracters construction workers medicade & medicare would be a thing of the past . its time we start thinking outside the box this is not only the greatest country in the world but also inthe history of the world my opinion lets quit the smearing campaigns the bickering back & forth & work together to resolve this countrys issues . we do a great disservice to all the men & women past & present who served for what we have to have this kind of failure .
Comment: #11
Posted by: jm
Fri Oct 8, 2010 9:23 PM
Re: jm: The problem is, who is going to compel every wage-earner to contribute to a single health-care fund or insurance company? Many people will see $15/week as too much to justify. To compel those people to pay, you'd need laws, which is exactly what we don't need more of: government intrusion. Read many of John's other articles to find out exactly why putting the government in control of money is a bad thing (one recent story that comes to mind is "stimulus" money used for road repair that averaged out to about $6000 per traffic light bulb replaced, and the creation of something like 1 new job after a couple million dollars spent, that's government efficiency for you).

I have to agree with others. Obamacare is designed to fail. They restrict the free market, then they'll come back and say "oops, looks like the free market failed, we better take over". The only saving grace is that 2 years from now Obama and his cronies will be out, and hopefully whoever takes over is smart enough to know to repeal Obamacare, rather than take it even further as seems to be the current plan.
Comment: #12
Posted by: Nathan H.
Tue Oct 12, 2010 12:00 PM
Re: Kevin

Exactly! I've been saying the same thing but you said it better. Health Insurance and health Care are not the same thing.
Comment: #13
Posted by: Kim
Thu Oct 14, 2010 7:52 PM
Re: Kevin
The issue is not even 'affordable care." That is an entirely separate subject that is not in any way covered by any insurer or even the Obamacare nightmare.

Medical insurance has only one purpose -- and it has nothing to do with medicine. Medical insurance (and all insurance, for that matter) is to insure the financial stability of the insured. In other words, we each have insurance to avoid (or at least reduce) the chance of bankruptcy in the event of a medical problem.

What is needed -- if there is any NEED for the government to get involved at all -- is an optional 'catastrophe' insurance. Something along the lines of covering all medical bills after you spend 15% of your annual salary on medical care. (notice the benefits: the cost is progressive, as people earning more will pay more before the protection begins -- which will make the libs happy -- regular insurance becomes instantly affordable because regular companies will no longer have a high risk -- they will know exactly the potential outlay for any insured family (bringing the cost of ordinary health insurance way way down). Plus,if coupled with a retunr of ordinary medical insurance to the old fashioned 20/80 ploicies of 40 years ago, there would be individual incentive to restrict costs and unnecessary expense. No person would ever have to worry about financial disaster as a result of a medical issue. And I suspect the cost of the catastrophe insurance would be relatively low, as most of the population would not make a claim in any given year. Best of all, it could be voluntary -- but just about everyone would sign up because it would make your ordinary insurance cost drop so low. Even pre-existing conditions could be covered with a reasonable certainty. Simple, and requires minimal governemtn involvement. The entrie program could be written in about 10 - 20 pages of simple text -- not thousands of pages of leagalese.

But it won't happen -- to logical, simple, easy. Nothing for a politician to grandstand about.
Comment: #14
Posted by: Curt
Thu Oct 28, 2010 2:00 PM
Already have an account? Log in.
New Account  
Your Name:
Your E-mail:
Your Password:
Confirm Your Password:

Please allow a few minutes for your comment to be posted.

Enter the numbers to the right:  
Creators.com comments policy
More
John Stossel
Oct. `14
Su Mo Tu We Th Fr Sa
28 29 30 1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31 1
About the author About the author
Write the author Write the author
Printer friendly format Printer friendly format
Email to friend Email to friend
View by Month
Walter Williams
Walter E. WilliamsUpdated 22 Oct 2014
Froma Harrop
Froma HarropUpdated 21 Oct 2014
Thomas Sowell
Thomas SowellUpdated 21 Oct 2014

10 Jun 2009 Competition Would Save Medicine, Too

9 Apr 2008 Bullies

30 Jun 2010 Entrepreneurship Helps Make America Great