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    ObamaCare: Far worse than economically ignorant

    06/24/2009

    In a news conference yesterday, Barack Obama demonstrated a remarkable ignorance of and antipathy for free markets and free enterprise when speaking about the possibility of a “public option” as part of “health care reform.”

    It’s not easy for Obama to surprise me but the vacuousness of his statements combined with their casual disregard for the power of government when “competing” with private companies was truly shocking.

    According to an AP article about the news conference, Obama said that “A government-run health insurance option is needed ‘to discipline insurance companies.’” Let’s get this straight: 1300 insurance companies aren’t enough to have competition? We need 1301 to suddenly make it all OK?

    Obama complains that insurance companies care about profits…implying that a government-run program won’t. And that raises at least two huge problems: First, if the government plan won’t care about operating efficiently, then Obama’s clearly lying when he says that private health insurance companies “should be able to compete.” And second, if the government plan won’t care about a profit, that means it will run at a loss and become a permanent leech, sucking taxpayer dollars year after year, adding to the collection of such leeches on a body politic that President Obama believes is a never-ending supply for his essentially fascist economic plans (though to be clear, his vision for health care is more socialist than fascist.).

    The following paragraph from the AP article emphasizes Obama’s economic idiocy:

    “Why would it drive private insurance out of business?” he said of the proposed public option. If private insurers “tell us that they’re offering a good deal, then why is it that the government, which they say can’t run anything, suddenly is going to drive them out of business? That’s not logical.”

    Does President Obama really think that a government-run plan will in any sense be on an equal footing with private plans? Does he not thing that people will rationally switch from private plans to a “free lunch” even if it’s not the tastiest lunch, just as is already happening in states’ SCHIP (children’s health insurance) programs where somewhere between 1/3 and 2/3 of new enrollees drop private coverage to get on the government plan? (There is a higher level of “crowd out”, i.e. people dropping private coverage, as states increase the income levels of families which are eligible for the programs.) And does he really think that the fact that government “can’t run anything” will keep government from putting private companies out of business?

    I’ve always thought that Obama didn’t understand economics very well. But I underestimated how ignorant he is. Indeed, he’s closer to delusional than ignorant based on his words yesterday.

    As is typical for a liberal, he thinks people are stupid as he downplayed the fact that “up to 80 percent of people ‘are satisfied with the health insurance that they currently have.’”

    The solution to rising health care costs is much simpler than a massive government take-over of our medical system. It is to allow competition into the system, to let people buy policies across state lines and let states compete in terms of the mandates which they’ll require for policies sold by insurers in their states. So someone from California could buy a policy in Idaho at half the cost because it doesn’t have mandatory coverage for in vitro fertilization and hair plugs. Also, allowing people to get together in groups for purposes of buying insurance would be a good step.

    While I oppose Medicare Part D, the prescription drug benefit, there is nevertheless an important lesson in that program’s relative success. In an excellent article, Mort Kondracke notes that the private competition created in Part D has the program coming in dramatically under cost estimates, where no other part of Medicare is doing anything but busting every budget estimate ever made. Even a government program can, if allowed to, prove that competition works.

    But Obama’s conception is, despite all his flowery rhetoric, NOT about real competition. It’s about putting private health insurers out of business and turning our health care system into something like England’s or Canada’s, where people can’t get state of the art medicine or treatments, where surgery has waiting lists of months or years, and where anyone who can afford to comes here for any life-and-death procedure, or any quality of life procedure which can be done here in weeks rather than waiting months or years at home.

    It would also help costs if legislation to curtail frivolous lawsuits and outrageous judgments were passed, but the Democrats are so in debt to the trial lawyers that they won’t engage in any serious tort reform. Indeed, Barack Obama said that to the AMA just last week.

    Finally, a point I’ve made before and will keep making: The game here is not just about a socialist vision of taking over health care. It’s about relieving unions of much or all of their financial responsibility for their members’ and retirees’ health care. After all, if the UAW were suddenly not to need to spend the $20 billion they’re getting from GM on health care, imagine how many Democrats they could get elected with that money suddenly turning into the world’s largest political slush fund.