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Universal healthcare bill

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The Texas Trigger posted on Sat, Jun 23 2012 3:25 AM

so my buddy in the health insurance business told me the other day that, as the bill stands now, Health insurers love it. This doesn't really surprise me but given the nature of universal healthcare, I dont totally understand why this would be so.

 

It seems like a competitor with unlimited funds would easily outbid you for the business. Why on Earth would this benefit the health insurers. 

 

Thanks,
The Texas Trigger

"If men are not angels, then who shall run the state?" 

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Everyone will be forced to buy healthcare.

Assuming you can compete already, which existing firms can, they're likely to gain many, many new customers, all of which are the healthiest available and thus the least likely to choose to buy insurance if they weren't being forced and low cost.

They existence of healthy people on the rolles will allow them to serve more sick people, together which means way more money flowing through the coffers.

Suppose you made beer. Not everyone drinks beer. Then the government decides to force everyone to buy beer. You wouldn't be happy?

Even if it is evil, companies know where their bread is buttered.

Autarchy: rule of the self by the self; the act of self ruling.
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Simple...they helped write the legislation to make sure it would.  In essense it's what Anenome said, in the end they get more customers.  Either people who can afford it paying directly, or people who can't afford it getting the bills paid for them by everyone else (government subsidy).  Either way, the insurance company and big pharma are getting paid.  Why else would you see them lobbying for it?

Same reason you see Philip Morris lobbying for tobacco regulation.  (And not just any regulation, regs the company helped write). Same reason you see Skype, Google and Amazon.com pushing for government regulation of the Internet.  Or toy companies like Mattel supporting mandatory laws to require toy testing. (Again, the company actually helped write the legislation).

It's classic regulatory capture.

 

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True, true, when companies write the legislation, they usually make it far harder for new companies to get to their level and challenge them in the free market. Which then leads to deterioration of service and other abuses.

Fascism wins again.

The meat packing industry was happy when Sinclair Lewis's Upton Sinclair's The Jungle made a stink about conditions in butcher-plants--the resulting legislation had the effect of creating a large financial burden for compliance. Larger firms were more able to bear these burdens, while smaller ones went bankrupt, thus protecting the position of the larger firms while simultaneously making challenging those positions far more difficult.

Regulatory capture occurs over time because, where are you going to find an expert on meat-packing or health-care or anything else? Why not a CEO from the industry. Or, should you be just some political appointee, play ball while on the commission and you're guaranteed a job in industry after your service term, or as a lobbyist.

In time, the regulatory agency is making all the decisions the industry wants, with the force of law behind it.

It's completely disgusting.

Autarchy: rule of the self by the self; the act of self ruling.
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I think you mean Upton Sinclair.

 

Here's a couple of resources on that:

Ideas and Consequences: Of Meat and Myth

Of Meat and Myth  (2002 update) (YouTube audio reading)

 

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NOOOOOOOOOOOO!

Read this instead. It's my work synthesizing all the sources I've found so far:

http://wiki.mises.org/wiki/Meat_packing

You can find the links to the other sources there

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Yeah, yeah, that Sinclair.

Autarchy: rule of the self by the self; the act of self ruling.
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Isn't the Wiki useful as hell?  Now you know why I link everything I can there (especially books).

 

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Pretty nice. Didn't know we had a wiki.

Autarchy: rule of the self by the self; the act of self ruling.
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Uh oh, Peter Sidor....did you hear that?

 

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I figured that's what was going on. Is the universal mandate a new addition to the original bill passed back in December of 09 (I think)? I thought the original idea was, "we are the government. health insurance is expensive. We will provide health insurance to everyone "for free" through tax dollars. You are free to keep your private insurance, however you can get it through us for free if you'd like." If that were the case, I would think private insurers would hate that idea. "Why would I pay when I can get it for free?" so consumers might think. 

Was that never the plan? Only fairly recently have I heard it been called a universal mandate. I didn't think it was always "YOU MUST BUY INSURANCE FROM SOMEONE!"

"If men are not angels, then who shall run the state?" 

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No, that's basically how it's always been.  The ultimate goal is of course to get to that single payer system (they've said so for years), and the invidiual mandate is a good step in that direction.  Basically you force everyone to buy, then quality goes down, and prices go up, and more and more people end up being forced onto the government program, while the government and all the proponents of socialism get to point to the insurance companies and say "look!  They're cutting coverage and raising prices!"  And now they have more ammunition to say government should take over the whole thing.

Plus as expounded here, establishing precedent to be able to force Americans to buy something would be an enormous step toward totalitarian rule, so of course they are in favor of that.

 

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I just responded to your comment on that thread, actually. So, if what your saying is the case, why are the insurance companies not wise enough to see that their days are numbered? It seems like analysts would be on staff just to research that very topic, especially when forming a federally aligned cartel by  getting into bed with a competitor that has infinitely deep pockets.

Seems like the writing would be clearly on the wall. "These guys act nice now, but they can and will outperform us simply because of their ability to print capital investment at will." Is the hope that the bill will make them all rich now, then the government will just buy them all up once they nationalize, putting one more nice little goodbye chunk of change in their pocket? Or are they thinking they will just become rich official bureaucrats when nationalization occurs? I just have to think these guys are too smart not to know what's going on.

look at the big banks back before the housing boom crashed. These guys weren't being stupid when they handed out loans to people with credit so bad that even Michael Jackson wouldn't touch it. Of course this is a bad business move if markets are working as they should. They knew that if things got bad, they would be perfectly fine. They may be thieves, but they aren't stupid.       

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The Texas Trigger:
So, if what your saying is the case, why are the insurance companies not wise enough to see that their days are numbered?

You're asking why corporate suits aren't wise enough to see the long term implications of their advocacies?  wink

Why does China keep taking on our debt, when a blind man could see that there's no way we could ever pay it back?  Why do people use the last of their paycheck to buy lottery tickets when everyone they know has played for as long as they've known them, and never won anything?

I think this guy's response is quite appropriate (and the look on his face is even more articulate than that).

 

a) These guys aren't paid to be forward-looking.

b) They can't afford to be forward-looking (obviously the reality is the company can't afford not to be...but remember...any one person is expendable.)

c) They usually don't have to be forward-looking...as their market dominance (and therefore profits) are largely sured-up by government regulation.

So there's no reason for them to think that far.  And even if the reality does occur to them, they easily can brush it aside with the assumption that they're too big to fail.  The government wouldn't let Aetna go under.  It employs too many people.  It insures too many people.  They'll bail em out, or merge them into whatever single payer system they cook up.  Someone's going to have to handle all this health insurance stuff.  Who is the government going to hire to do it?  Obviously, the people who already do it.  "I'll still have my job.  I'll still get my money."

That's why.

 

It seems like analysts would be on staff just to research that very topic, especially when forming a federally aligned cartel by  getting into bed with a competitor that has infinitely deep pockets.

Oh okay, so Mickey Blue Eyes has been in bed with the Mob for years and all of a sudden realizes "hey...these guys could turn on me at any minute.  Maybe this isn't such a great setup after all...I should work on getting out of this"...and he all of a sudden starts to lobby against the agenda of the leviathan that regulates virtually every single tiny detail of his business?

I don't think so.

 

Seems like the writing would be clearly on the wall.

a) That doesn't mean people read it.

b) That doesn't mean anyone is inclined/ is in a position to do anything about it.

 

I just have to think these guys are too smart not to know what's going on.

The ones who are smart enough to know (which, believe me, are so fewer than you'd think) are the ones with golden parachutes.  Whether they know simply because they're smart enough to have gotten to a position to have a parachute, or they know, and are therefore smart enough to arrange parachutes, one can't really be sure.

 

look at the big banks back before the housing boom crashed. These guys weren't being stupid when they handed out loans to people with credit so bad that even Michael Jackson wouldn't touch it. Of course this is a bad business move if markets are working as they should. They knew that if things got bad, they would be perfectly fine. They may be thieves, but they aren't stupid.

Actually the housing crisis supports my point.  Look at what happened.  A lot of people (including big shot investors, brokers, and dealers, and developers) went belly up...and a small elite at the tip top made out like bandits...even as their companies collapsed.

 

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