Friday, September 04, 2009

Parsing Lincoln on Health Reform

She has consistently promised to support health insurance reform that is deficit neutral, requires insurance companies to cover pre-existing conditions, and that lowers health care costs to consumers. When she states that a totally-government funded public option cannot accomplish all of these goals, she is staying true to her word.” From Senator Blanche Lincoln's press release today.

There is no way government can both force insurance companies to cover prexisting conditions and lower health care costs to consumers- unless they shift health care costs onto non-consumers. That's you, healthy people. Government cannot reduce any costs. It is very good however, at shifting and concealing costs. That's how it instigates over-consumption of its services. It convinces people that someone else is paying for the service that they will use.

Covering pre-existing conditions is not really insurance anyway. Insurance has to do with spreading risks. If the condition already exists, that is not a risk. It is a sure thing. There is more the state can and should do as far as a person who is insured getting their coverage dropped when they change jobs. But that is for people who are not sick when they start paying on a plan and get sick later. They should be covered rather than dropped on a pretext because protection against risk was what they paid for.

Covering pre-existing conditions is shifting costs, not sharing risk. It is sick people using the government to force healthy people to pay their bills for them. To help a virtuous poor person who got cancer, we might not mind. For a guy who had illicit sex with 200 other guys and got AIDS, some of us might. For an elderly grandmother who needs cataract surgery, we might not object to being sent the bill. For an alcoholic who destroyed their liver, we might object. But it won't be our choice anymore.

The cost of private coverage will go through the roof if this happens, and that may be what they WANT to happen so that people will cry out for a public option.

She states that "a totally-government funded public option cannot accomplish all of these goals". Specifically, it would not be "deficit neutral". Remember she prefaced that claim by saying she is against not a public option, but a TOTALLY-GOVERNMENT FUNDED pubic option. I assure you she is for an option that she desperately wants to call something else besides a public option even though that is what it will be. It will be as subsidized as much as she thinks she can get away with by public funds. It will not be a TOTALLY government funded option, just as Medicare Part D is not totally government funded. About 25% of it comes from premiums. It is helping to bankrupt us just the same.

Do not be fooled by this talk of health co-ops or "non-profit corporations" given start-up funds by the government. That sounds just like Fannie Mae and Freddie Mac. They were private corporations started by the government to provide affordable housing. Whatever they call this monstrosity will be started to provide affordable health care. We just bailed out Freddie Mac and Fannie Mae to the tune of 1.5 trillion, that is trillion with a "T" as in $15,000 for every man woman and child in this country.

My concern is that Lincoln is going to claim this plan is deficit neutral because it pays for itself by 1) slashing Medicare 2) forcing young healthy people to purchase coverage at a higher rate than they could previously get it because they will be subsidizing everyone else and 3) making completely unrealistic assumptions, contradicted by all historical evidence of government budgeting, about what this "Fannie Mae for Health Care" non-profit corporation can do with X amount of start-up dollars.

The ultimate issue is trust. For good reason, the average voter does not trust this Congress or Senate. Congress has run into the ground about everything it has tried. Taking on a major new task is not a credible position. We don't trust you to make it better, and there is no reason we should at this point.


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