The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions.
NO MATERIAL HERE CONSTITUTES "INVESTMENT ADVICE" NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANCIAL INSTRUMENT, INCLUDING BUT NOT LIMITED TO STOCKS, OPTIONS, BONDS OR FUTURES.
The author may have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.
Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein.
The Market Ticker content may be sent unmodified to lawmakers via print or electronic means or excerpted online for non-commercial purposes provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media, to republish full articles, or for any commercial use (which includes any site where advertising is displayed.)
Submissions or tips on matters of economic or political interest may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must include full and correct contact information and be related to an economic or political matter of the day. All submissions become the property of The Market Ticker.
Considering sending spam? Read this first.
Health care "reform" is the current hot-button, with the Obama administration now talking about a "public" health-insurance system to "keep the system honest."
Look folks, you want to know why we have the health cost problems we have? I'll lay it out for you - in a way you can't refute or argue with:
#1 and #2 exist because of explicit efforts by the "health care" industry to exempt themselves from the laws that every other merchant of every other good and service in the United States must adhere to.
To put this bluntly the medical industry has intentionally put forward a system by which it can screw you with impunity, obtaining exemptions from the laws that cover every other area of commerce, thereby effectively forcing you to buy overpriced services you do not want to purchase lest an unexpected life event literally wipe you out.
This is an extortion racket and absolutely none of the proposals being put forward have done a thing to address any of it.
If we want to fix the health care pricing problem we can do so. It isn't very difficult. Here's the prescription:
Now clearly #1 doesn't work so well when you're unconscious due to a heart attack or just wrecking your car. But setting your broken leg or performing a cardiac procedure is something that's done for people who aren't incapacitated too, so guess what - the price is already published and thus the charge known.
This prevents the common practice of hospitals gouging private payers, it exposes prices and brings competition to pricing, and allows the free market to work. It ends the preference for "insurance" on routine procedures.
Next up, if you want to sell "insurance" in a market you must sell it to all persons in that market, defined as an area of at least one US State. You may discriminate in your pricing only based on age and gender - nothing else. If you sell that "insurance" product to any person you must sell to all persons within that state at the same price, and you must publish all your plans and offering prices.
"Insurance" products that are not true insurance products may not discriminate on reimbursement dependent on where the service is performed. The practice of requiring "in network" doctors or even hospitals lest you get "rejected" must end. In addition pre-qualification for any bona-fide non-elective procedure must be absolutely barred as a matter of law.
Finally, all providers of "insurance" must sell a true insurance product. Common HMO/PPO plans are not insurance - they are pre-paid medical care. Insurance is the purchase of a contract to cover damage caused by an unexpected event. Everyone needs health care of some form. Those who want to sell "pre-paid health plans" may do so, but they must also offer true insurance (e.g. covering ONLY hospitalization and related events, etc.)
These changes instantly destroy the connection between health "insurance" and employment. If you leave your job you have the absolute right to keep your health plan by continuing to pay for it. If you don't like your health plan or move out of the state you can buy any plan offered to anyone in your state, at your choice, for the same price they pay.
All mandates to provide specific services and products under "insurance" are federally preempted. Women should be able to choose a health plan that does not include abortion (and/or pre-natal!) services, for example, if they would never use either. Some women (e.g. those who have chosen to have a tubal ligation!) can't use these services, yet they often wind up paying for them in their premiums. Men should be able to choose a plan that does not cover things like Viagra - or, if they choose, perhaps they do want "ED" coverage.
If the health lobby won't cut out the nonsense and work for this sort of change to the system then I am forced to advocate for full nationalization of the entire health system, effectively placing everyone under Medicare. This will lead to forced rationing due to cost but that's happening already, and such a forced system will put a stop to the discriminatory practices of insurers, physicians, hospitals and others in the medical field who commonly bill private parties ten times what health "insurance" plans or Medicare pay for the very same procedure, while playing "let's deny coverage any time we think we can get away with it."
It is my opinion that we should be treating those in the health-insurance lobby, including hospitals, physicians and health-insurance providers, as co-conspirators in a racketeering scheme that effectively trades on the fear of disease and imminent bankruptcy to bamboozle and screw the population, while waving around their "hippocratic oath" - something better described as the "hypocritic oath."