Defenestrating Thoughts from the Bivouac

If the road to hell is paved with good intentions, then the “no denial for pre-existing conditions” clause in the current healthcare bill is sufficient to pave a 12-lane superhighway.

Prohibiting insurers from denying coverage based on a pre-existing medical condition is a very noble-sounding idea. But it’s as naive and myopic as the idea of eliminating poverty by giving everyone a million dollars and a pony.

To understand why, we need to think about how insurance actually works. Let’s look at auto insurance. For example, Crissy and I pay around $100 per month to have $500,000 of coverage per incident. It’s very unlikely that either one of us will ever cause that much damage in an accident, but if we did, it would financially catastrophic. So, we voluntarily buy insurance even though we don’t really expect to ever collect.

The insurance company collects $100 premiums from lots of people and pools the money so that a large sum of money is available if the low-probability event happens to one of us.

The system works since people pay small sums to protect against a low probability event.

If you wrecked your car yesterday and bought insurance today, would the insurance replace your car? Of course not. You would be asking them, “How about I give you $100 and you give me $25,000 to replace my car?”

Basically, you’re asking them to charge you the small premium of low probability event, even though the event already happened. You’re just asking for free money.

The same holds true for healthcare. If we pass a law that says you can’t be denied for pre-existing conditions, then people will just wait until they are sick and then buy insurance. The latest proposal from Congress has a penalty if you don’t hold insurance, but the penalty is a measly $750/year. So healthy individuals would still wait to buy insurance until they need it.

In this world, every policy holder will be filing claims. Which means every customer will be saying, “How about I give you $100 and you give me $25,000 to replace my car?” and the company will be required by law to say yes. The law essentially dictates that private companies have to give you free money to pay for your medical expenses.

In this system, all the companies will either go out of business or raise their rates drastically. And the whole private sector of insurance providers would collapse.

And though the government will claim this is a “market failure”, it should be clear that the cause is government meddling.

Once the private sector is gone, all we’ll have left is a government “single payer” system. And despite the touted theoretical benefits of a “single payer” system, does anyone actually believe that the same bureaucrats that brought us the the TSA, FEMA, the DMV, and the IRS can run a nationalized healthcare system that is cost-effective and also provides high quality care?

The sad thing is that politicians are using the “pre-existing condition” issue to distract people from the real problems: government bans of insurance competition, out of control malpractice lawsuits, and government subsidies that forced us to have a “3rd party payer system”.

Remember, a single-payer nationalized system has rationing by definition. Anytime something is provided for free, it is rationed. Every existing single payer system in the world and every single US government program is rationed. This includes Social Security, Medicare, Cash for Clunkers, $40 vouchers for digital to analog converter boxes, welfare, subsidized CFLs, tax credits for hybrids, and so on.

There’s no way anyone can claim that healthcare would be any different.

Finally, while I shouldn’t have to say it, I’m all for fixing healthcare. I’m just against the ideas coming from Washington. Those plans won’t make things better; they will make things much, much worse. If you’re interested in learned why and how to really fix healthcare, check out my earlier posts on this topic:

• The root causes of our healthcare problems
• How to fix healthcare
• Some closing thoughts on healthcare – I guess these didn’t turn out to be “closing” thoughts :-)
• Healthcare reform and Corporatism

This article on healthcare “reform” from a couple weeks ago is fascinating in a rage-inducing sort of way:

WASHINGTON — A measure to allow the importation of cheaper prescription drugs from Canada and some other countries fell short in the Senate Tuesday night, but lawmakers were working on other ways to squeeze concessions from the pharmaceutical industry.

So our Senators had to ask the drug companies if Americans could have permission to buy medicine from non-American companies.

A free people should be able to voluntarily buy goods from whomever they want. The ban on importing drugs is nothing more than corporate welfare thanks to the industry’s liberal bribing of our Congressmen.

The drug companies claim that safety is an issue. But an amendment to allow importation of medicine if it has FDA approval was voted down in the Senate as well, which means the concern about “safety” isn’t valid.

I know we’re told that our economic and political system is Capitalism, but it’s very untrue. Sadly, we really have a system of Corporatism, where companies essentially run the government and write the laws. Heck, even Michael “I hate Capitalism” Moore agrees.

In this case, American pharmaceutical companies bought Congress and got a law passed that makes it illegal to buy products from their competitors. And it can be even more blatant: sometimes companies just get big piles of taxpayer money. A study that shouldn’t surprise anyone found that banks that spent more on lobbying were more likely to get bailouts.

An obvious, simple fix for healthcare is to let Americans voluntarily buy medicine from whoever they and their doctor feel is best. This alone with save Americans over $8,000,000,000 a year! But it’s not on the table; Congress doesn’t work for the people, Congress works for wealthy and powerful corporate interests.

But, don’t lay all the blame on the companies. The majority of the blame should be on our leaders in Washington. If they weren’t for sale in the first place, then they couldn’t be bought.

Merry Christmas everyone! As my Christmas gift to all of you, here are two very entertaining and highly annoying Christmas videos:

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And Happy New Year! :-)

And one more recession indicator to add to the bunch: at Red Lobster, if it’s a customer’s birthday they bring him a biscuit with a candle in it instead of a piece of cake with a candle.

They do, however, sing the actual “Happy Birthday” song instead of some weird made-up song or chant. I’m not sure if they pay royalties or not though.