Compassionate Liberals – Unintended Consequences

Six months after passing the effects of ObamaCare, A.K.A. Patient Protection and Affordable Care Act, are starting to be felt. They are of course not what President Obama, and the compassionate liberals that passed ObamaCare either promised or expected. Like lots of legislation, ObamaCare was passed assuming that people would change the way they act as a result of the new law. The assumptions were that health care costs would go down and that the historic economic response to government mandated regulations and associated increased costs would magically not pertain to this legislation. The unintended consequences of ObamaCare are hurting far more than it will ever help. The results will be less not more of everything it touches. The only thing ObamaCare will likely increase is government control of our everyday lives.

President Obama promised that under ObamaCare no one will have to change medical plans. Already 840,000 Americans have lost their coverage. The reason nearly one million people who had insurance are now uninsured is because their insurer, the Principal Financial Group, left the insurance market. New York Times reports, "The company's decision reflected its assessment of its ability to compete in the environment created by the new law, Principal's decision closely tracks moves by other insurers that have indicated in recent weeks that they plan to drop out of certain segments of the market. ..."

Those nasty evil health insurers Wellpoint, Cigna, Aetna, Humana and CoventryOne no longer write policies for all children. Faced with a promised exclusion from future markets by the Health Czar if they raise their rates and inform their customers and share holders why, their choice is to lose money or drop child only coverage. Why are they faced with the choice of losing money or dropping child only coverage? Because Obamacare requires that they insure already sick children for the same price as well children.

It sounds very compassionate to guarantee that sick children be covered for the same price as healthy children. What the compassionate ObamaCare fanatics haven’t noticed or ignore is that paying for the health services and products of sick children is guaranteed to cost more than for the healthy. 100% of sick children will need health services and products when coverage begins. Insurance is about risk, so if the government mandates that insurance companies cover sick children at the lower well-children price, insurers must mitigate the know risk, they are forced to quit that market.

They did not leave the child only insurance market because of greed, lack of caring, or other avariced reasoning. They left because it’s just moral and fiduciary responsibility to those whom they are accountable. Insurance companies exist to provide a services to clients and to return profits to their investors, they are not charities. Although the total dollars of profits an insurance company makes is huge and so large some call obscene, their relative profit is low. If you make lemonade and sell it for $1 a glass on the corner nobody would accuse you of greed even though the lemonade only cost you about 20 cents per glass and you are making a 500% profit. The reason is nobody would begrudge you making 80 cents per glass is that if you sold $100 of lemonade per day you’d only make $80. Even if you became a giant like Snapple and made millions selling lemonade at hundreds of percent profit nobody would care. Why is it when insurance companies sell their product for a minimal 10% profit they are vilified? Liberals talk about gross dollars of profits, not profit rates, because they try to fool us into thinking insurance companies are greedy uncaring, and evil. The fact is insurance profits based on gross sales are neither exorbanate nor abusive. If you spend $100 and the return is $110 you made $10, no big deal. If you and 10 of your friends each invest $100 each (total$1000) and the return is $1100 and you made $100 ($10 each) it’s no big deal. Why is it evil or immoral or greedy if you collect $110 Billion and spend $100Billion in providing a service and retain $10Billion as profit?

Compassionate liberals have saved the parents of sick children from having to purchase expensive insurance. Parents will simply be unable to buy insurance for their child (sick or healthy) at any price! That's a typical unintended consequence of government compassion. At least it’s fair; whether you are rich or poor, black or white, liberal or conservative, citizen or alien, you equally have zero access to child only health insurance. Unlike liberal’s expectations and promises the reality of ObamaCare is neither Patient Protection nor Affordable Care.

The Obama Administrations response to the news that insurance companies will have to raise rates because of the new law is to clamp down on the first amendment. Obama's Health Czar, Sebelius wrote there would be "zero tolerance" for companies that attribute "unjustified rate increases" to Obamacare. The Obama Health Czar wrote, " we will not stand idly by as insurers blame their premium hikes and increased profits on the requirement that they provide consumers with basic protections."

John Stossel accurately translated this into plain English, "We have repealed the basic laws of economics. Insurance companies must now give people more but not charge them for it. If you do charge more, you must not tell your customers why. Shut up, obey, and don't complain. We are your rulers."

The limit on free speech is just another unintended consequence of liberal’s good intentions. You would have to use very tortured logic to think that threats to exclude companies who express their valid reasoning for raising their rates from being allowed to do business in the future is not limiting free speech.

Another unintended consequence people will start feeling when they get their first paycheck of 2011. There will be less money in their check. Employers who hire workers to produce a product or service that they can sell competitively are going to have increased health insurance costs because of this law. They will have a few choices, reduce benefits offered, increase employee contribution to health insurance, drop health insurance all together, or raise the prices of their product/service. No matter what happens the average employee will have less money in his pocket. Local government workers will have the same choices with one exception, local governments may raise local property or sales taxes to cover the increased health insurance costs, thus taxes will be raised on everybody but it won’t be called a “health care” tax.

I’ve already been notified by my employer to expect about $40 per month increase in my portion of the health insurance increase. That means I’m going to have to spend that much less someplace else. To make up for the loss I’ll probably quit going to the movie theater. In fact to make up for the increased costs of food, fuel, health care, etc. in my area a lot of people have quit going to the movies. So many that the local theaters have quit all late night showings except for Friday and Saturday nights. This allows them to cut back on part time employees significantly. The local theater hires high school kids and young adults for minimum wage, unemployment for that sector in my community is well over 50%.

Liberals act as if people don’t change their behavior based on their compassionate government plans to make life better for everybody. Like raising taxes on the rich, liberals make their estimates on returns assuming nobody will change their behavior. As I noted in previous articles Maryland raised taxes on the rich predicting over $200M increase in tax revenue, the result was an exodus of rich and over $350M loss in revenue. Obama’s and liberals in congress’s claim that if they don’t let the Bush tax cuts expire for those making over $250K per year will result in over $700Billion in lost revenue. That’s BS, those who make over $250K make that much because they are both smart and driven, just like in Maryland they will find a way to hide their money or move to a place where they are not taxed so much. To see the unintended consequences, all you have to do is look at the exodus of business from high tax California to low tax Texas.

The unintended consequences the compassionate but misguided socialistic desires of Obama, Pelosi, Ried, and the liberals in government will be less liberty and more poverty. I would like to think that it’s just their big hearts trying to do what they feel is best for everybody and that they just don’t understand or realize that the reality of their actions will not match their stated promises or expectations. But Obama himself said that raising the taxes on the rich would decrease government revenue but it was about fairness not increasing government revenue. You would almost think he wants to punish success in the name of fairness even if it hurts everybody. Maybe the results are what Obama and liberals expected, knowing that their policies will make everybody more equal. Equally poor that is.

by 2Bfree 10/6/2010