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Commentary

What are the consequences of insuring customers with pre-existing conditions?

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Walter Williams

Investors Business Daily

What would happen if Obama succeeds in passing a law to force insurance companies to accept customers with pre-existing conditions at the same price as everyone else who doesn’t have pre-existing conditions?

Read this IBD editorial by George Mason University economist Walter Williams. (my second favorite economist)

Excerpt:

Sen. John Rockefeller, D-W.Va., chairman of the Senate Finance Subcommittee on Health Care, and Rep. Joe Courtney, D-Conn., a member of the House Education and Labor Committee, have introduced the Pre-existing Condition Patient Protection Act, which would eliminate pre-existing condition exclusions in all insurance markets. That’s an Obama administration priority.

I wonder whether President Obama and his congressional supporters would go a step further and protect not just patients, but everyone against pre-existing condition exclusions by insurance companies. Let’s look at the benefits of such a law.

A person might save quite a bit of money on fire insurance. He could wait until his home is ablaze and then walk into Nationwide and say, “Sell me a fire insurance policy so I can have my house repaired.” The Nationwide salesman says, “That’s lunacy!” But the person replies, “Congress says you cannot deny me insurance because of a pre-existing condition.”

This mandate against insurance company discrimination would not only apply to home insurance, but auto insurance and life insurance as well. Instead of a wife wasting money on costly life insurance premiums, she could spend that money on jewelry, cosmetics and massages and then wait until her husband kicked the bucket to buy life insurance on him.

Insurance companies don’t stay in business and prosper by being stupid. If Congress were to enact a law eliminating pre-existing condition exclusions, what might be expected?

Yeah, that’s why Walter Williams is awesome. And you must read the rest to see how it would apply to medical insurance. Everything sounds good to those who do not ask the most important question in economics: “and then what happens?” And that question cannot be answered with “then I feel good about myself and people like me because I care about the poor”. That question needs to be asked for the forgotten man. The nameless man who is hog-tied into supplying the wealth that gets redistributed by demagogues desperately seeking adulation from the covetous masses.

The problem is that people don’t understand how insurance works. If you have to pay guaranteed claims from people with pre-existing conditions, then the premiums of all those people who don’t have pre-existing conditions will be increased to pay for those claims. Think. Beyond. Stage. One.

The Cato Institute

Consider this podcast from the libertarian Cato Institute, which explains a little more from the point of view of the medical insurance company.

The MP3 file is here.

Here a summary of what happens after stage one, to the forgotten man. Medical care costs money to produce. Forcing medical insurance companies to sell care for a pre-existing condition far below the actual cost of providing it will force insurers to drop coverage for those pre-existing conditions. (Or they may drop the doctors who treat those conditions from their network). That is worse for the people with pre-existing conditions. And this is how economic ignorance hurts the very people that the secular leftist do-gooders are trying to help.

Believe me when I tell you that this happens all the time with leftist economic policies. It’s the law of unintended consequences. They think they are helping their preferred victims, they feel better about themselves, but they actually hurt the very people they are trying to help. And by “help” I mean they steal someone else’s money/product/liberty and transfer it to their preferred victims in order to buy votes.

National Review

Now, take a look at this article that ECM sent me from National Review, which talks about Obama’s promise that you will be able to keep the medical coverage you have. Is Obama telling the truth? Can pigs really fly just by sheer belief and pixie dust?

Excerpt:

Obamacare would forbid insurers from basing rates on the individual health of their customers in any community. It also would force issuers to cover people who refuse to buy insurance until they get sick. These and Obamacare’s other complexities and contradictions would make insurance pricier, as would a $149.1 billion, 40 percent excise tax on high-value “Cadillac plans.” Thus, some employers would save money by paying fines after de-insuring employees. Workers who cherish their health plans then would find themselves dumped into the government-run Health Insurance Exchange.

“Some smaller employers would be inclined to terminate their existing coverage,” explained a December 10 memorandum by Medicare’s chief actuary, Richard S. Foster. He added: “The per-worker penalties assessed on non-participating employers are very low compared to prevailing health insurance costs. As a result, the penalties would not be a significant deterrent to dropping or foregoing coverage. We estimate such actions would collectively reduce the number of people with employer-sponsored health coverage by about 17 million.”

Even more ominously, Obamacare would require employers to provide federally approved coverage. Obama considers “meaningful” plans those at least as generous as the Federal Employees Health Benefits Program.

“Obama’s definition of ‘meaningful’ coverage could eliminate the health plans that now cover as many as half of the 159 million Americans with employer-sponsored insurance, plus more than half of the roughly 18 million Americans in the individual market,” says Cato Institute policy analyst Michael Cannon. “This could compel close to 90 million Americans to switch to more comprehensive health plans with higher premiums, whether they value the added coverage or not.”

It’s not just elective abortions that we’re going to be paying for whether we want them or not. In some countries with socialized health care you can pay for breast enlargements (UK), sex changes (Canada), in vitro fertilization (Canada), etc. And these elective surgeries take up money from the other vital services. Obama can make it such that every plan has to offer those coverages.

So, those who don’t use such elective services end up encouraging them, even if they have moral objections to those services. When the government subsidizes something, more people choose it. Won’t Planned Parenthood be pleased with all that new revenue? I’m sure they’ll think of something to do with all that money. Maybe a nice political donation?

News

Jennifer Roback Morse explains the California lawsuit against Prop 8

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Great post by the admirable Dr. Jennifer Roback Morse on MercatorNet. (H/T RuthBlog)

Excerpt:

California’s high-profile federal lawsuit against Proposition 8, which begins in court on January 11, appears to be about creating a federal case for same sex marriage. But in fact, much more is at stake. Lurking in the shadows of this case is a breathtaking expansion of judicial interference with perfectly valid elections. Whatever your views about Proposition 8, we surely should be able to agree that special interest groups can’t go into court to overturn elections they don’t like.

Ted Olsen and David Boies want to convince the court that the alleged anti-gay bias of Proposition 8 supporters should invalidate the election. But first, they have to find some such bias. This is why Olsen and Boies sought the trial court’s permission to demand confidential campaign documents. They want free reign to rummage around through the Prop 8 campaign’s computers and filing cabinets, looking for evidence of this supposed meanness. The trial judge had ruled that Prop 8 proponents had no First Amendment privilege, and therefore had to hand over all communications among members of the campaign and their contractors.

[…]The motives of the seven million Californians who voted Yes on 8 are irrelevant. The election was about adding 14 words to the California Constitution. The entire state of California knew perfectly well what those words were. The point of the campaign was to discuss the likely impact of those words. Olsen and Boies don’t like what the voters decided. Sorry. Self-government is about abiding by the results of lawful elections, whether you like the outcome or not.

And here is an op-ed by former Attorney General Ed Meese III in the New York Times. (H/T The Corner)

Excerpt:

Most troubling, Judge Walker has also ruled that the trial will investigate the Proposition 8 sponsors’ personal beliefs regarding marriage and sexuality. No doubt, the plaintiffs will aggressively exploit this opportunity to assert that the sponsors exhibited bigotry toward homosexuals, or that religious views motivated the adoption of Proposition 8. They’ll argue that prohibiting gay marriage is akin to racial discrimination.

To top it all off, Judge Walker has determined that this case will be the first in the Ninth Circuit to allow cameras in the courtroom, with the proceedings posted on YouTube. This will expose supporters of Proposition 8 who appear in the courtroom to the type of vandalism, harassment and bullying attacks already used by some of those who oppose the proposition.

The tolerance of the secular left. I hope some of my readers who believe in marriage are going to law school – and I want straight As on your transcripts, but keep a low profile! I recommend writing under a pseudonym, because the other side will go after anything you write to discredit you. Think about it.

My previous post about the threats and violence against Prop 8 supporters. And another post explains why prop 8 supporters favor traditional marriage.

By the way, comments on this post will be strictly moderated in order to respect Obama’s hate crimes law.

News

Unemployment rate among men aged 25-54 is 19.4%

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Check out this post over at Dinocrat. (H/T ECM)

Excerpt:

According to an analysis done by TIME Magazine’s Justin Fox, almost 20% of 25-54 year old men are unemployed today, a receord since the Bureau of Labor Statistics started keeping track of the data just after World War II. An unemployment rate of 20% among men in their prime is shocking. Absent the substantial government transfer payments today and the large labor force participation by women, the 20% male unemployment figure would be regarded as a national emergency.

Rome is burning. And yet Congress and the administration fiddle with crooked healthcare deals, tomfoolery such as AGW, perverse nonsense like cap and trade, imaginary “green” jobs, the treating of enemy combatants as mere crooks, etc. — and their policies towards hostile powers are even more ill-informed and provocatively weak. It’s hard to imagine a government more out of step with the people.

Here’s the graph from the Bureau of Labor Statistics showing the decline since 1948. (H/T Time Magazine)

This is actually important to me, and something I am thinking a lot about. I have come to realize that marriage is really an incubator for passing on values to children that are often different from those of the state. Scholars like Stephen Baskerville and Jennifer Roback Morse have argued that the family is a buffer against the power and influence of the state. This is especially true for Christian men and women whose values are definitely not those of the secular leftist state. But where do families come from? How do they start?

In order to have a family, a man marries a woman who agrees with his worldview and values, and then they have children. It’s the man’s role to lead the family by protecting and providing for his wife and children. But that man needs a job so that he can have confidence that he can fulfill those responsibilities. The earning of money is what gives a man the respect and authority in the home so that he can lead his wife and children. Any challenge to the man’s role as protector and provider diminishes his authority to lead.

Already, I am concerned about how the massive tax burden placed on working men causes them to have their authority whittled down, since the state confiscates much of a man’s money and then provides services that he really should be providing himself. Often the services provided (abortion, etc.) are not compatible with Christianity at all! But this new statistic about 19.4% of men in their prime being unemployed is even worse, because now men are earning no money at all! How can they start a family with no income?

There really isn’t much thought going on today about the problem of how to get men to marry and stay married. Instead, people are more focused on dealing with a variety of of grievances from victim groups. I’ve blogged before about the problems that men are having in the schools today, largely due to the application of feminist theory to education. No one seems to be concerned about whether men are doing well in school, and whether they are being raised in families with actual fathers, instead being raised by government subsidies.

I think that young people really need to stop and think about what they want out of life. There seems to be a tendency today among young people to think that relationships are about fun, and that it isn’t necessary to be careful about your choice of mate because the government will always be there to take care of you if you get into trouble, (e.g. – unplanned pregnancy, abusive spouse, etc.). This must stop. We need to stop looking at the government as a substitute for making solid, long-term choices about sex and marriage.

At some point we are going to have to ask ourselves whether we are ready to abandon the family entirely and just substitute sperm donations and government checks for men. If the state is the source of money in a child-producing unit, then the state is the one who calls the tune about what the children will believe. And make no mistake – academics on the secular left are salivating at the thought of pushing their values onto the next generation of children. That is why they are hostile to voucher programs and private schools.

Related stories

Some stories from last year about just a few the problems men are facing.

There are actually many other problems that men are facing that I could have brought up, but my focus today is on education and jobs. These are serious problems and they have serious consequences.