Mugged By Obamacare, then Hugging the Mugger

There’s the old adage that a conservative is a liberal who’s been mugged by reality. A twist on that is a liberal is a liberal who’s been mugged by reality. That is, even those who are victims of measures that they support are so stuck on their ideology that they keep supporting those same measures.

A recent WSJ article (“Health Law Pinches Colleges”) describes colleges and universities that are cutting back on the hours of their adjunct professors in order to avoid having to provide them with health insurance coverage under Obamacare. The article points to a professor whose hours are being cut, resulting in a salary cut of $2,000. The professor said in response, ”I think it goes against the spirit of the [health-care] law,” Mr. Balla said. “In education, we’re working for the public good, we are public employees at a public institution; we should be the first ones to uphold the law, to set the example.”

That sounds like somebody who was a big supporter of Obamacare. And I bet that person is still a big supporter of Obamacare. He seems upset with his employer for not abiding by the spirit of Obamacare. He probably doesn’t realize that his employer, also probably run by Obamacare supporters (given that it’s a college), just cannot afford to abide by that spirit and has no other choice but to cut his hours. The alternative would be to resort to more drastic measures like laying people off.

I bet lots of Obamacare supporters who’ve been victims of Obamacare are thinking in the back of their mind, “I’m a sacrificial lamb for the public good; there must be a greater good in Obamacare despite being personally negatively affected.”

Little do they realize there are millions of sacrificial lambs all across the nation. So many such lambs mean that Obamacare is not a public good, but a public bad.

An Incomplete Apology to the Posterperson of the Gimme Generation

If there’s one thing that the whole Rush Limbaugh flap has made apparent, it’s that society holds conservatives to much higher standards of decency than it holds liberals.

When a Bill Maher or an Ed Schultz or others on the left make gratuitous and vulgar remarks about women, it’s met with a shrug, a laugh, or silence. People don’t expect them to have high moral standards. When a Rush Limbaugh does the same thing, there’s hell to pay. That’s because the right is expected to have higher moral standards than the left.

And I’ve no beef with that. I’d much rather be a part of the group to which society holds a higher standard.

As for Rush, in his apology he said he descended to the left’s level when he used the disparaging words to describe Sandra Fluke. He became like them, he said, instead of maintaining a high degree of integrity on his radio program.

OK Rush, that’s a good start, but demonstrating your sincerity requires more than just renouncing the use of those disparaging words. You have to go beyond that. If you mean what you say about not adopting the tactics of the left, you have to pledge to renounce the use of the term “feminazis” to describe feminists, “Chicago thug” to describe President Obama and any similar words you’ve used to describe those on the left. You can’t just not say those words in the future. As part of your pledge, you have to explicitly say that you’ve been wrong to use those words, that you were adopting the tactics of the left in using those words (many, but certainly not all, of them sickeningly call their political opponents “nazis”), and that integrity means erasing those words from your lexicon forever – unless of course you’re talking about actual National Socialists or actual thugs.

Regarding Sandra Fluke herself, in the 1980s young people were said to be in the “me generation” because all they wanted to do was make money and supposedly not share it with others. Well 30 years later, Sandra Fluke is the posterperson for the gimme generation, a large and growing group of Americans who expect other people to give them money – even money for accessories (i.e. contraception) that enable them to engage in pleasures of the flesh!

Note that the gimme generation, aka the entitlement generation, doesn’t just include people in Fluke’s age group, and doesn’t imply that all of them are of that mentality. There are many in the younger generation who shun the entitlement culture and who prize independence and self-reliance. The gimme generation refers to anyone, of any age, who accepts welfare but who doesn’t need it. Remember, two-thirds of welfare goes to the middle class and rich.

Wow – so with Obamacare, we Americans are not only being coerced into financing the routine healthcare costs of rich and middle class Americans, including law students who attend expensive, elite universities, but we’re also being coerced into financing what enables them to engage in their worldly pleasures.

Yes the boiling frog principle is alive and well. Five or 10 years ago if someone were to tell you that’s what’s in store for Americans, you’d think they’d be out of their minds. But that reality is here. And the water boils on.

America, Feast Your Eyes On Our Future

One thing I noticed while traveling in Europe is how rude so many waiters were (at least on the Continent) compared with the U.S. Why? Not because Europeans are ruder by nature, but because of lack of market forces in restaurants – i.e. the tip is written into the price of the meal, so what incentive does the waiter have to be nice?

It’s a similar phenomenon in European hospitals: lack of market forces. With heavily unionized government healthcare workers, doing such-and-such like fetching a glass of water isn’t part of their contract, so why do it? (See “Dying Patient Refused a Glass of Water“.) And they likely have little fear of being fired, thanks to their government employees union. So why provide good service?

Lack of market forces in restaurants? Trivial consequences. In hospitals? Tragic consequences.

Opportunity of a Lifetime, Missed

When America embarks on a disastrous policy, as it did last night during the Sunday Night Massacre, when the House voted to pass Obamacare, I think to myself if there’s any little thing I could have done to help stop it. I did write a couple of anti-Obamacare articles. But they were probably read by a few hundred, or if I’m lucky a few thousand people, or about .0001 percent of the population of America. So that didn’t help at all.

But this morning in the shower (where a lot of my ideas come to me, in addition to jogging) I was kicking myself for not trying another strategy. Had I been more astute, it’s something I should have done, in retrospect. To be sure, I’m absolutely sure that it still wouldn’t have changed anything whatsoever, but at least I would have given it my best shot.

In previous weeks I had been toying with researching and writing an article on the Congressional Budget Office’s scoring method. When the CBO determines a certain policy’s effect on the deficit, it doesn’t take the political feasibility of that policy into account. So if Congress says it’s going to raise taxes and cut spending by a certain amount, the CBO uses that amount in its calculations and doesn’t make a judgment regarding how likely those tax increases and spending cuts will come to fruition.

That was the case with Obamacare. Last week the CBO stated that based on Congress’s numbers, Obamacare would cut the deficit due to the massive tax increases and cuts to Medicare payments to doctors. That gave a big shot in the arm to Obamacare supporters in the House, prompting them to call for a vote on Sunday.

But it’s so ludicrous because the reductions in payments to doctors are highly unlikely to happen, based on past experience, and additional government revenues from tax increases will likely be much less than anticipated, also based on past experience (because when taxes go up, people’s behavior changes, prompting them to work less, find tax loopholes, or defer paying taxes).

I should have written an article about that. In addition the the article itself, I would have had a lot more knowledge about the subject under my belt. That would have equipped me to be quite conversant on the topic.

And then I could have approached Doug Elmendorf on the subject. He’s the director of the Congressional Budget Office.

For the past decade or more I’ve been going off and on to a group called the Prosperity Caucus, where a modest-sized group of free-market types meet once a month to hear a speaker. (Anyone can go – you certainly don’t need an exclusive invitation or anything like that.) And they’re usually quite prominent people in the policy world.

Last month, Doug Elmendorf was the speaker. That could have been a great opportunity, during the Q&A, to suggest to him, nay plead with him, that the CBO should report back with two or more sets of numbers, assigning the likelihood of each set. (The Obamacare deficit reduction number certainly would get an “unlikely” scoring. A soaring deficit number, contrary to Obamacare pipe dreams, would have gotten a “likely” scoring.)

After his talk, when everyone was milling about, he surprisingly stayed for quite a long time, willing to take questions and comments from people individually. That would have been a great opportunity for me to hand him my (would-be) article and reiterate to him that the CBO really should take political feasibility into account.

Of course, I’m not so naive as to think that had I done that, it actually would have changed anything at CBO. (For all I know it may require an act of Congress.) But at least my conscience would have been clear.

Opportunity missed. Probably never again will I ever have such close access to such a key figure in the policy world just before such an America-shattering vote.

A Socialist Juices the Greed Machine

In a comment to this article in which I advocate abolishing the tax code monstrosity that favors employer-provided health insurance and instituting health savings accounts, someone with the username “markchrist” went off on a socialist rant. Actually that’s redundant. Socialists only can rant; they have no capacity for logical and reasoned arguments. In the rant, he or she wrote, “You (sic) “plan” is so obviously written and approved by the insurance industry. … bought and paid for for by the GREED MACHINE.”

Actually the health insurance industry likely would be terrified of this “plan” because it actually introduces competition. Companies, especially big ones, hate competition. It forces them to lower their prices and boost quality in order to try to win business. What company wants to reduce its profits and perhaps even go out of business, all in the name of competition?

The other day my new state representative, Virginia delegate Jim LeMunyon, in a telephone town hall observed that the airwaves are rife with car insurance advertisements like those of Geico. Car insurers know you can easily fire your current car insurer and switch to another one, so they do everything in their power to keep their prices as low and quality as high as possible.

But you rarely come across health insurer commercials. Why? Because you can’t fire them. Assuming you get your insurance through your employer – courtesy of the government program called the employer health insurance deduction – you’re stuck with them. They aren’t worried about losing your as a customer, so why should they cut their rates or boost quality?

They’re exceedingly comfortable in their government-protected, competition-scarce cocoon. Why would they want to see an end to the employer health insurance tax deduction, and the resulting boom in people shopping around for the best rates?

The same holds true for hospitals, medical practices, and other healthcare providers. The notion that they would have to start to actually compete for your business by lowering their prices must be a terrifying notion for them indeed.

So no, Mr. Socialist, this plan isn’t bought and paid for by the insurance industry. Just the opposite. Through your support for employer-provided health insurance, ironically it’s folks like you who are making the insurance industry as pleased as punch. You’re satiating their greed. But being a socialist, you’re not able to figure that out.

Now It’s Time to Push for REAL Healthcare Reform

If Scott Brown’s senatorial win in Massachusetts ends up derailing Obamacare, then it’s time for Republicans to push for healthcare reform with just as much enthusiasm as Democrats pushed (and are pushing) for healthcare deform.

Healthcare reform would genuinely substantially lower healthcare costs (and not through price controls, as would happen under deform), resulting in far fewer uninsured.

The key planks of healthcare reform should be: (1) ending the institution of getting one’s health insurance through one’s employer, yet (2) instituting mandatory medical savings accounts (MSAs) through one’s employer (the two are not contradictory), (3) promoting high-deductable insurance combined with MSAs, and (4) health insurance deregulation in order to further bring down costs.

For details, click here.

Smear Alert! Another “If You Oppose Obamacare You Must Be Racist” Canard


Some folks’ bias is so strong, minds are so narrow, and economic illiteracy are so profound that they’re totally incapable of understanding why other folks don’t view Obamacare as a good thing. A big explanation, they surmise, must be racism.

The latest smear comes from an article in today’s Washington Post, written by a Kate Julian, which touts a “study” in which people sorted “stereotypically ‘black’ and ‘white’ words and names (Tyrone and Shaniqua vs. Brett and Jane) into positive and negative categories.” More “black” words in negative categories implied racism. By this logic, the fact that most white people don’t choose “black” names for the kids means that most white people must be racist.

What about the names Matilda or Gertrude or Vladimir? (No offense to anyone named that.) If those are mainly in a research participant’s negative categories, does that make the participant racist against whites?

Hey Kate, I don’t know what race you are or whether you have kids, but if you’re white and you do have kids, are they named Tyrone or Shaniqua or something along those lines? If not, does that make you a racist? (Of course no, but yes if you take Kate’s premise to its logical conclusion.)

The “study” found that people alleged to be racists were more likely to oppose Obamacare. But that can’t hold because the original premise – based on the misleading sorting exercise – was faulty.

What if, say, RNC Chairman Michael Steele, who is black, proposed Steelecare where healthcare is reformed along more free-market lines. What if the alleged “racists” were more likely to support Steelecare? Would that mean support for Steelecare is based on racism?

While I can’t rule out that there isn’t someone, somewhere in the U.S.A. who opposes Obamacare because he or she is genuinely racist, I am confident that at least 99.999 percent of those who oppose Obamacare do so because of legitimate concerns with this monstrosity of a plan.

A Love-Hate Relationship With Spending. And Spending Wins Out.

I’m no stand-up comedian, but I can’t help but run by you this one: Washington Post syndicated columnist David Ignatius is crying out, Spending, No! Obamacare, Yes!

(Audience laughter.)

Yes folks, Ignatius is positively appalled by the U.S. government’s massive spending sprees, and desperately wants someone to do something about it. But first, there’s just one little thing he’d like the government to do: put through the most massive spending spree in the history of the United States.

He does add the caveat that it would be great if the politicians would arrange it so that Obamacare cuts costs – i.e. results in less government spending. (At first his article seemed like he was advocating higher taxes to offset the spending, but then he writes “cuts costs”, which by definition means reducing spending.) But if politicians did that, then it wouldn’t be Obamacare. It would be something far, far different from Obamacare – more along the lines of true healthcare reform like substantially reducing healthcare regulations, decoupling health insurance from employers, and instituting health savings accounts for all combined with high-deductible insurance. (Obamacare is the opposite of all that.)

Gotta love all the folks who express shock – shock! at all the gambling going on in the house, and then happily proceed to hit the blackjack tables themselves.

Condoning Dishonesty

Washington Post blogger Ezra Klein denounces the practice of insurance companies canceling insurance on someone who omitted an illness or pre-existing condition on their application.

Comment by rodhug:
Just to get this straight: You think an applicant for medical insurance should be allowed to lie about their medical history to get lower rates and you think the insurance company (whose business model requires it to make money for its shareholders) should simply have to pay up for that lie. Wonderful.

Another comment, by donaldlevit:
What you fail to discuss is the fact that state government and law enforcement has refused to prosecute individuals that knowingly lie to obtain insurance with false information. When the government refuses to do their job insurers are left with no option but to protect themselves for the good of the company and honest policy holders. I would be pissed to find out my insurance company is charging me inflated rates because they are allowing dishonest people to game the system. Why do you leave this out? You further fail to mention this only applies to the individual market, which is 10-15 million people, this is not happening in the group market which is 10 times larger, meaning this hardly effects anyone, and only those that lie.

NPR’s Rovner: Advocate, Not Journalist

“To compel a man to furnish contributions of money for the propagation of opinions which he disbelieves is sinful and tyrannical.”

That quote by Thomas Jefferson sums up lots of folks’ beef with National Public Radio. They’re forced, through their tax money, to pay for the propagation of wrongheaded opinions, including those of Obamacare cheerleaders.

One such cheerleader is NPR’s “health policy correspondent” Julie Rovner. Recently she took questions from listeners, and based on her answers, she easily could have been mistaken for an Obama administration spokesperson – putting the best face on Obamacare without the slightest hint of skepticism about any aspect of the proposed bill.

A listener asked about the apparent contradictions of the financing of the bill – that it will cost about $1 trillion over 10 years yet save $130 billion and add not a dime to the deficit.

Rovner’s response started out, “All three of those statements are true at the same time, believe it or not.”

A good reporter would have prefaced her response with something like “The Obama administration (or Democratic senators) claims that all three of those statements are true…” Instead, Rovner just stated it as if it were fact – or an Obama administration talking point.

She ended her answer with this Obama talking point: “it adds not one dime to the federal deficit; in fact, takes a whole lot of dimes away.”

Julie, in journalism you’re supposed to preface a statement like that with “so-and-so claims…” or “so-and-so believes that…” and then state some of the counter arguments.

Either that, or NPR should introduce her not as “health policy correspondent” but “health policy advocate” or “Obama administration spokesperson” or at least “NPR commentator,” and then add a disclaimer at the end along the lines of “Ms. Rovner’s opinions are solely her own and do not necessarily represent those of NPR, the station, its owners,” etc.

Taking From the Poor to Give to the Rich

Wouldn’t you consider it unjust if poor and middle class people had to pay for things that rich people consume?

That’s the kind of unjust world we’re moving toward, if Obamacare passes.

Under Obamacare no only will poor people get “free” healthcare as they do now with Medicaid, but rich and middle class people will start to get “free” healthcare as well – “free” meaning it’s paid for by someone other than the end-user.

Funding for Obamacare in large part will come from a new payroll tax. Such taxes aren’t “progressive” where the more you make, the higher percentage you pay. They’re levied on every worker. Under the House bill it will be up to up to 8 percent of salary (depending on how large an employer’s payroll is) and a flat $750 under the Senate version.

So if you’re low-salaried and healthy enough to not consume too much healthcare, you’re paying the bills of rich people who do consume a lot of healthcare. It’s a money transfer from the poor to the rich, literally.

Of course, thanks to ole’ Lyndon Johnson that already happens under Medicare, for rich people over 65. But if Barack Obama gets his way it would happen to a far greater extent – for rich people under 65.

How’s that for unjust?

Driving Health Plans Out of Business

If under Obamacare you can keep your existing health insurance plan, as the president repeatedly declares, how can you do so if there’s no more insurance plan to keep?

When President Obama says you can keep your insurance plan, what he means is that you’ll merely be allowed to do so assuming you still have access to it. He doesn’t guarantee that you’ll still have access to it. In fact, Obamacare ensures that there’s a good chance you won’t.

Why? One reason is because employers will have to pay a payroll tax if they don’t offer health insurance. Given the choice between paying thousands of dollars per employee for health insurance, or the less-expensive payroll tax (up to 8 percent of salary under the House bill, and a flat $750 under the Senate version), in this cut-throat business world, many employers will no doubt opt for the less-expensive tax. And the employees can kiss their health insurance plan goodbye.

Another reason is new mandates on insurance companies that will drive many of them out of business. Notable is the requirement to provide coverage to people with pre-existing conditions – even to people who wait to buy coverage until after they’re sick or injured.

Why pay into an insurance plan at all if you’ll be eligible for the benefits regardless? People will stop paying in droves, so insurance companies’ revenue will plummet. Meanwhile the companies’ expenses will skyrocket because claims will skyrocket. When expenses consistently exceed revenue, they’ll go out of business. That’s what happened to insurance companies located in states that had a similar mandate, and it’s what will happen to insurance companies nationwide if that mandate succeeds. Insurance companies will cease to exist in droves (which of course is the ultimate objective of many if not most Obamacare supporters).

People will say, “Hey Mr. President, you told me I could keep my insurance plan. But because of you, I don’t have one to keep.”

Ultimate Objective of Obamacare?

With Medicare, Medicaid and Social Security already on track to bankrupt America, you’d think that by now our leaders would have gotten responsible and do something about those reckless spending programs. But in this wacky world, it’s just the opposite. Bush pushes through a new prescription drug entitlement program and a trillion-dollar bank bailout, and now Obama makes Bush look like an amateur when it comes to government spending and new entitlement programs.

The single most effective way to reform our healthcare woes would be to decouple the purchasing of health insurance through one’s employer, and instead buy it individually just as we do with car insurance. Were that the case, there would be a highly competitive marketplace for health insurance with much greater affordability – and far fewer uninsured. (There would be far more business start-ups as well.)

But instead of that deficit-friendly route, our leaders now want a massive new entitlement program. An advocate thereof recently confessed to his true motivations, which are no doubt the true motivations of many if not most of the leaders supporting Obamacare: further redistribution of wealth, and more people dependent on government, who tend to vote for Democrats.

Some people on the hard left no doubt support Obamacare because they deliberately want more fiscal recklessness. You don’t have to listen to C-SPAN call-in shows very long to know that there are Americans out there wishing for the “revolution.” The strategy is to overload the government with impossible demands, bringing on economic crisis, social chaos, and hopefully (in their minds) a socialist utopia. Two Columbia University professors, Richard Andrew Cloward and Frances Fox Piven, laid out that strategy in 1966 with an article in The Nation titled “The Weight of the Poor: A Strategy to End Poverty”. It’s now referred to as the Cloward-Piven strategy.

To be sure, I think the Cloward-Piven strategy is a prime motivator for just a small contingent of society – the ultra-loony left – and certainly doesn’t apply to the bulk of Obamacare supporters. The latter only want redistribution, and not necessarily revolution.

Decidedly Unhealthy for Entrepreneurship

(A previous version of this article appeared in The Christian Science Monitor.)

Small business creation is probably the single best thing for the economy. Most jobs come from small businesses. And nearly every big business started out that way, when someone decided to take the plunge and become self-employed. But now, a lot less business creation goes on than could be going on. The culprit? The government subsidy (via the tax code) for employer-provided health insurance.

And President Obama has no plans to change that. In fact, if he gets his way on health care redesign, he’d exacerbate it.

Lots of people decide not to become self-employed because it would mean losing their employer-provided health insurance. Although I know of no studies that estimate the extent to which this happens, anecdotal evidence indicates that it is very common.

And it is totally unacceptable. Traditional barriers to starting a business include taxes and regulations. But health insurance? People should not have to pay more for this when starting a business, just as they do not have to pay more for their car insurance, groceries, or any number of other personal expenses when starting a business.

The problem stems from the bizarre tradition of getting health insurance through one’s employer, thanks (or rather, no thanks) to a quirk in the tax code. Just as people do not get their car insurance through their employer, they should not have to get their health insurance through their employer. Sure, they can try to buy it on their own, but that would mean paying anywhere from a couple hundred to a couple thousand dollars a month. The institution of employer-provided health insurance has practically destroyed the market for individual health insurance.

Because employers are the main purchasers of health insurance, the marketplace is a lot less competitive than would otherwise be the case. By contrast, if everyone had to buy health insurance on their own, health care providers and insurance companies would be forced to compete much more aggressively based on price and quality. A diversity of plans would sprout up tailored to a diversity of individual needs. Many people, for example, would opt for high deductibles and pay out-of-pocket for smaller expenses.

Right now, health care providers are not so incentivized to charge lower prices because they know that patients’ insurance companies will pick up the tab, even for check-ups and other minor procedures. (This is like your car insurance paying for oil changes.) If, on the other hand, there were a large population of out-of-pocket-paying people shopping around based on price and quality, the price of health care would plummet.

The market for veterinary care provides a valuable insight. Columnist James Freeman, writing in USAToday.com a few years ago, points out that the same surgeries performed on humans can be performed on our canine friends for about one-tenth the price. This is mainly because veterinary care providers are forced to aggressively compete for cost-conscious customers. Were the same to happen with human health care, prices probably would not be as low as those of veterinary care, but they still would fall considerably.

So if everyone obtained their health insurance directly rather than through employers, not only would health care be a lot less expensive, but it would play no role in a would-be entrepreneur’s decision to quit a regular job in order to start a business.

The peculiar institution of employer-provided health insurance stems from – what else? – government intervention in the marketplace. During World War II, when government-imposed wage and price controls prevented salaries from being raised, employers started to offer health insurance to attract workers. Politicians and IRS officials then instituted a generous tax break for it. It is essentially a disguised government subsidy favoring employers and employees, at the expense of the self-employed, the non-employed, and those who work for companies that do not offer health insurance. (Note: A subsidy is when a certain group of people gets a government handout paid for by higher taxes on everyone else. A tax break is another way to do the same thing. Taxes on everyone else have to be higher in order to make up for the government’s lost revenue.)

To help correct the wildly distorted health insurance market and achieve a level playing field for the employed, the self-employed, and the non-employed alike, the tax break for employer-provided health insurance should be abolished. Or as a second-best remedy, there should be an equivalent tax break for individuals when buying health insurance.

Incredibly, President Obama and the Left would further burden businesses by requiring them to pay a new payroll tax if they don’t already provide health insurance. They want to start a huge new government program to try to correct the ill effects of another government program, and would only make things a lot worse.

You’d think that if they’re going to socialize healthcare, they at least could decouple it from employment.

A far better solution is to eliminate that original government program – i.e., the tax subsidy. Then, businesses would get out of the business of providing health insurance to their employees (and spend the savings on higher salaries), people would shop around for it on their own, health care prices would plummet, more people would opt for self-employment, and a lot more businesses would be created.

Patrick Chisholm is editor of PolicyDynamics.