We live in a time when politicians refuse to even understand the basic difference between the X and Y chromosomes. It is therefore not hard to understand why up is down and in is out when it comes to health care economics in the eyes of the esteemed Congressional Budget Office.
According to the CBO, the more Congress pays ransom to the insurance cartel, the lower prices will be, and then government will actually save money. Earlier this week, it issued its crystal ball projection on the Murray-Alexander bailout (the “Bipartisan Health Care Stabilization Act of 2017”) and said it would decrease the deficit by $3.8 billion. Less is more and more is less.
Of course, the insurance cartel would never use the morphine that numbs the pain from the price increases to raise prices even more … and demand even more bailouts next year. Bailing out the most failed and expensive national project of all time is now profitable, according to the smart people in D.C.
Anything done to promote Obamacare, CBO says will bring down costs; anything done to repeal it and offer alternatives will drive up prices. This is, in part, what has been fueling the reluctance of some Republicans to repeal Obamacare.
Evidently, the tripling of premiums, colossal loss of jobs and wages, and skyrocketing of the cost of health care itself as a result of the administrative nightmare has been lost on them. It must have been the Cookie Monster who raised the price of my insurance.
According to CBO, if you burn down someone’s house, lock them in another burning house, but have government supply the arsonist with more fuel while also supplying the victim with more oxygen tanks and fire suits, it will be sustainable — enjoyable, even — for the victim.
Thus, those at CBO believe by continuing to bar all non-regulated alternatives, force people to purchase cartel insurance, and subsidize the price increase for some, it won’t incentivize members of the cartel to use their government-given monopoly to raise prices even more. That has been the case for the first four years of Obamacare, but somehow if we pay just one more ransom, they will lower prices.
Another dishonest way proponents of the bailout are using CBO to suggest their proposals save money is by counting a new unfunded liability on the states.
Given that insurers in most states already increased premiums, even with the understanding they would not be getting cost-sharing subsidies, the Murray-Alexander bailout bill requires states to issue rebates to consumers and to the federal government. Thus, state spending will go up, while the feds will get an estimated $3.1 billion from states — the accounting is a bait-and-switch.
The past is the best predictor of the future
I don’t fault CBO for missing projections for the future; it’s that they close their eyes to the reality of the past and present.
From Day 1, CBO predicted that Obamacare premiums would only rise 10-13 percent in the individual market. To this day, they only predict 20 percent premium increases at most. Yet, in just a matter of four years, my premiums went up 300 percent and the value of the plans decreased.
A new analysis shows that premiums next year, on average, will increase 34 percent, already overshooting CBO’s doomsday forecast. Therefore, by definition, the subsidies for the premiums will have to be much higher than anything CBO has forecast.
By already doing things the way CBO has wanted, premiums have skyrocketed beyond what they ever predicted. But somehow, by not paying the ransom, suddenly premiums will go up more than they predicted … but still less than what they actually had gone up with the subsidies!
Again, we need only learn from the facts of the past, not phantom speculation about the future. In February 2014, CBO predicted that the original bailout, the “risk corridor” program, would be so profitable for insurers that it would reduce costs and save the feds $8 billion over three years. Well, in 2016, there was an $8.3 billion deficit.
I have a novel supposition: Maybe endless subsidizing of a monopoly, market distortions, and creating an endless unnatural pot of money for insurers to fleece actually drives up prices, and in return, costs the government more in subsidies?
We don’t need to be prophets with a crystal ball for markets in the year 2028; we need only open our eyes to what has happened since government got involved in using the boot of statutes, regulations, subsidies, and bailouts to empower the insurance cartel to control our health care.
You see, when government “regulates” insurance in a way that is actuarily insolvent, believe it or not, prices skyrocket and monopolies are created for the already big guy. Then when government makes such large sums of subsidies available — for insurer, state, or consumer — there is now magically a massive pot of money for crony insurers to purloin.
You can’t charge what people can’t pay because nobody will buy your product. But if you are forced to buy the product AND government subsidizes it for many people, the monopoly will create a vicious cycle of ransom demands and price inflation.
Why has U.S. health care spending grown 2,300 percent since 1970? Precisely because we’ve supplanted health care with the worst mix of government-insurance cartel third-party control, which has boxed out competition and innovation.
All of that money goes to health care administrators … so they can manage the third-party payer, so they can inflate prices … to hire even more administrators … And so on.
The tragedy of this subsidy/bailout debate is that the money won’t even go to MDs — it will go to MBAs. Why is it that one could get carpal tunnel surgery at Dr. Kevin Tadych’s Northern Wisconsin Bone & Joint Center for $1,900 while the standard rate is closer to $13,000? Dr. Tadych cuts out the government-insurance cartel and offers consumer-driven direct payments.
The more our government and the all-powerful CBO is stocked with those who think like the government-relations teams of Aetna and United Health rather than Dr. Tadych and Dr. Keith Smith of the Oklahoma Surgery Center, the more American taxpayers will continue getting fleeced and going into debt to fuel the fire that has burnt down America.
We don’t need a government agency telling us that a man is a woman and a woman is a man, and we don’t need CBO telling us that crowning six insurance companies the kings of American health care will reduce costs.
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Author: Daniel Horowitz
Daniel Horowitz is a senior editor of Conservative Review. Follow him on Twitter @RMConservative.