Sunday, November 16, 2014

The Idiots We May Yet Prove to Be

Do you understand how you were duped?

Do you understand why it was convenient to get you to think that we could give everyone that didn't have health insurance that health insurance they didn't have, and that we could give you more extensive coverage than you had, without TAXING you?

You do see, don't you, that this is precisely what happened with the enactment of ReidPelosiObamacare?

They told you 40 million American were going without health insurance.  They talked about insurance issues at the margins. By this, I mean, the issues of pre-existing conditions exclusions and life-time caps on coverage. 

They omitted emphasizing to you that the 40 million included millions that CHOSE other approaches to health care than to have a health insurance policy. 

They omitted reminding you that many instances of "pre-existing conditions exclusions" were not LIFETIME DENIALS of coverage, but were, instead, limited periods of 90 days or 6 months, at the beginning of an insurance policy's coverage, for existing, diagnosed medical conditions. 

Instead, they relied on your willingness to believe the most horrible things about INSURANCE companies ... something you are willing to do because, GOD CURSE THOSE COMPANIES, they are for-profit companies, designed and intended to provide a return on investment to their shareholders.  And, as you might be willing to admit, you don't like the idea that someone creates a business, builds it up, sustains it, even in the face of close, scrupulous regulation (insurance companies are among the most closely regulated business), and make a profit from that business.  Why should they profit off of the misery of others? You may have even asked yourself that question.

So, when the idea of increased cost got hidden behind the idea of imposing additional layers of taxation of insurance companies, and further regulation of those companies, you kept quiet.  After all, you didn't have skin in the game.  You had Boyking's promise, "If you like your coverage, you can keep your coverage.  If you like your doctor, you can keep your doctor."  Obviously, with promises like that, you were smugly satisfied to know that the evil insurance companies were being brought to heel, reigned in, and forced, essentially to disgorge profits they were unjustly creating by their scheme of pre-exclusionary denials and lifetime coverage caps.

Of course, it was a scam. 

No provision of ReidPelosiObama compels PRICE CONTROL on insurance companies.  The laws of economics in a free economy authorize a producer of a product to include in the retail price of the product it sells the costs of producing the product.  For example, media coverage suggests that the McDonalds Corporation maintains a pricing structure that produces a profit margin of 15 %.  To clarify what that means, think about that dollar menu.  If you buy a McDouble, and it if is priced to support a 15 % profit margin, McDonalds all-in cost for the McDouble is about $ 0.85.  Selling the burger for a dollar would produce a $ 0.15 profit.

Now, imagine a bovine disease killing 1/10th of America's cattle herds.  The price of beef will increase due to reduced availability and unreduced demand.  Or, imagine a spike in fuel costs, fuel being necessary for transporting cattle to slaughterhouses and beef to market.  As a consequence, do you see how the all-in cost to produce a McDouble could easily increase to $ 0.95?  What will McDonalds do?  It can absorb the cost, of course, and businesses often make a business judgment that it is necessary to reduce their margin of profit.  In the long run, however, if McDonalds Corporation's earning expectations are going to be met, if its shareholders are going to be rewarded for investing their nickels and dimes, then the price of the McDouble will have to come up.  In fact, to maintain McDonald's profit margin, it will have to rise to $ 1.10.

Set aside the supposed MORAL question of whether health insurance companies should be in the business of making profits.  I know some of you will say that the obvious answer is that they should not, and I'm not writing this post to challenge that decidedly unbiblical notion.  This post simply reaffirms what, in the absence of driving notions of greed and jealousy, you would have seen as obvious when this whole debacle of ReidPelosiObamacare was pushed through the legislative process.

For now, we have an economic system that has not converted fully to a statist, command control mode.  To be sure, we are far closer to socialist control of the market than we are to free market principles; likewise, to be sure the teaching value of ReidPelosiObamacare -- for the Statist -- is that you have agreed with their wisdom, risen from your stupidity, and begun to accept as a certain truth a principle that just isn't so:  namely that producers of a product can be forced to absorb additional costs of production of a product or provision of a service, while not increasing the PRICE YOU PAY. 

Of course, to the dismay of Democrat Party faithful, like Senator Mary Landrieu, who supported ReidPelosiObamacare and soon to be former Senator Kay Hagan, the Making Health Care Unaffordable Act actually began to take effect.  When it did so, it operations immediately began to deform the market from the shape it had taken when operating on principles closer to free markets. 

Individual choices on health care funding were immediately restricted.  This reduction in liberty was accomplished by reducing your ability to reduce personal income tax liabilities by shifting some earnings from your paycheck to medical expense accounts.  In a previous job, I was able to set aside $ 7,000.00 a year for unplanned but predictable medical expenses.  Yes, you see, even with existing health coverage a family of ten will incur predictable but uncovered costs, including co-pays on office visits, prescriptions, and specialty diagnostic services such as MRIs.  By deferring that income into such an account, I did not pay income tax on it.  Of course, I also did not have access to that money to buy McDoubles, or to purchase a new car, or the like.  But I could meet the regular, dependable additional costs of health care that we faced as we raised our family. 

Why would there be a scheme that allowed you to earn money, not receive it in your paycheck, and spend it only on medical related expenses?  Well, obviously, it was a system that rewarded careful thought, consideration, and forward planning.  We knew, for example, with our brood, that broken arms, cavities, eyeglasses, sniffles and sneezes, would be a recurring part of life. We also knew that only an all encompassing and impossibly expensive health care insurance plan could meet every eventuality of life. The tax avoidance scheme didn't reward us with a Cadillac Escalade (or with the health insurance version of one).  It didn't reward us with a week vacation to Disney World.  Instead, it "rewarded" us with the ability to meet some of those marginal expenses of health care that insurance -- if it was to be priced reasonably -- simply could not cover.

But ReidPelosiObamacare ended that program.  Well, it reduced it so that the amount an individual could defer from taxation into such accounts was reduced to about $2000.00 a year.

What is the net effect of doing that?

The net effect of that is to reincorporate any amount exceeding $2000.00, amounts previously excluded from income back into one's income.  Do you follow?  In other words, it INCREASED THE TAXABLE INCOME of persons that had, previously, avoided taxation by directing some income into forward-thinking, sensible approaches to provide for health care uncertainties.  As a result, additional REVENUES were generated to the government.  By the way, doing this, FORCING EARNINGS back under taxation, did not reduce contingent medical expenses for us or for anyone else.  Eyeglasses still cost money ... until the next Boyking or Girlking takes the throne and tells optometrists and opticians that they have to give eyeglasses away.  MRIs still carry costs and co-pays.  So, to fund other activities of the federal government, ReidPelosiObamacare ended that program.

Marginal plans were identified as not meeting minimum requirements of ReidPelosiObamacare; those providing them were required to make changes.  A hard-working young man of my long acquaintance, my son, James Henderson, lost his health insurance coverage previously available to him through his employer.  In fact, millions did, and that is even before the "employer mandate" takes effect.  Companies like Home Depot, Walgreens and Trader Joes, that had provided health insurance coverage for its less-than-fulltime staff had to come to grips with the new Statist reality and dumped their employees out onto the market.

The reality immediately smacked Democrats in the face. THEY FOISTED THIS STATIST IGNORANCE on the Nation, and had already taken a beating in the 2010 Congressional elections, where Republicans were swept into control of the House.  The boyking immediately began a self-preservation program of changes, deferrals, delays, exclusions and limitations to the LEGAL REQUIREMENTS of ReidPelosiObamacare.  These actions were not taken because the Boyking realized the error of his way.  They were done only in a failing effort to "preserve future political viability" for himself and for no other reason whatever.

And all this happened because, in fact, Americans often do not closely tend the garden of our society.  In fact, over time, Americans have oddly begun to treat the vegetable plants in the garden -- businesses that produce goods and services -- as weeds, and the weeds in the garden -- government regulation that stifles growth and opportunity -- as prized petunias.  The "weeds" of government talk about how selfish the tomato plants are, and you begin pinching off the plant, thinking that somehow it will continue to grow the fruit you love -- blue ray players, low profile tires, hot and ready low calorie entrees, or the like.  And you manure the weeds of government, tolerating their encroachments in the garden, their noxious capacity to steal life from other plants, their demand, always increasing, for growing room.

The cure exists. 

It isn't easy, to be sure.  But the weeds have to go.  Government intrusions have to stop.  They have to be torn up out of the garden, root to tip.

For this reason, you have to rise from your slumbers.  You have to educate yourself to the present danger.  And you have to hold Republicans, now coming into command of the entire Congress, accountable.  They must undo ReidPelosiObamacare.  Not by dribs and drabs.  To do a piecemeal repair of the travesty is to admit the inadmissible, that such encroachments are wise or warranted.  They are not.  This is a ground upon which we can stand.  This is a ground on which the Congress can stand.  This is a ground on which we can judge our own collective wisdom in giving them this great responsibility.

Or we can prove Mr. Gruber correct and proceed like the idiots he thinks we are.