The Beginning of the End of Private Healthcare

Garret Myhan, M.S.N., C.C.R.N., C.R.N.A.

On Tuesday, President Obama signed HR 3200 into law, signaling a major shift in how healthcare services will be delivered in America. Many liberals think this new legislation does not go far enough because it does not include a “public option” or a “single payer system”. As a healthcare provider who deals with insurance companies every day, I can tell those liberals to just be patient. Socialized medicine is coming. This “reform” makes it inevitable.

Let me tell you briefly how I think this will play out.

Very simply, you only need to know the following three things to see where we are headed. First, the law of the land now states that you are required to purchase medical insurance or face a fine of up to 2% of your gross income. Second, the law states that within the next 2-3 years, insurance companies will no longer be allowed to deny anyone coverage due to a pre-existing condition. Third, as of today, insurance companies have already begun raising their premiums in anticipation of this new law.

Let’s think about this logically. Soon insurance companies will not be able to deny coverage to anyone. This means that in 2-3 years they will begin to pay huge disbursements to millions of people with cancer, HIV, and other terminal diseases that would previously have been denied. Accordingly, the insurance companies will continue to raise their rates in anticipation of these massive payouts. As insurance premiums rise, most businesses will not be able to afford insurance coverage for their employees. They will either drop coverage, downsize drastically, or go out of business. In addition, most of us will figure out that it is cheaper for us just to drop our expensive insurance, pay the government fine, and wait to get sick before buying insurance again; after all, we can’t be denied for a pre-existing illness. Eventually, only those who need insurance for disastrous illnesses will buy it, and, lacking paying healthy customers, the private insurers will go bankrupt. At this point our benevolent government will step in to become the single payer and…

BOOM

we’ve got ourselves European-style socialized medicine.

President Obama and the Democrats know all this. They know that there was no reason to push for a public option NOW when they can force through a milder bill that will assure a single payer LATER. Very sneaky.

As I see it, this situation is fairly hopeless for the private healthcare industry. There are only three ways out: repeal, the court system, and reclamation of State sovereignty under the 10th amendment. Repeal is unlikely. The Republicans, even if they take back a majority in Congress in November, will not be able or willing to repeal Obamacare. They will lack the numbers to override a Presidential veto, and they will lack the fortitude to refuse to appropriate funds for a popular and entrenched entitlement. By the time the GOP has an opportunity to reclaim the White House in 2012, the welfare state will be so dependent on Obamacare that to repeal it will mean political suicide. The courts are a long shot. Several states filed lawsuits today claiming that HR 3200 is unconstitutional. Several others (including Arkansas) are considering legal action. Needless to say, this litigation will take years to reach the Supreme Court, during which time President Obama will have ample opportunity to stack the court with liberal justices. I just don’t see this being struck down in the courts. Finally we have the 10th amendment. If enough States pass laws blocking Obamacare, we could have hope. But again I consider this to be unlikely. When push comes to shove, I just don’t think the several States have the necessary will to stand up to Uncle Sam.

I only see one other way out, and it isn’t pretty. A full scale economic meltdown, currency crisis, or other such event could derail this legislation. If the United States is suddenly unable to pay for Obamacare, it might go away, especially if we have massive inflation or civil unrest on a large scale. As a libertarian, I find myself almost wishing for this terrible event. It seems to me that the only way the people of the United States will return to limited government is if limited government is forced upon them.

_____________________________________________________________________

Garret Myhan is a guest contributor to The Arkansas Patriot.  He is a Certified Registered Nurse Anesthetist in group practice in Searcy, AR.   Garret is married, the father of 3 children, an active blogger, and an advocate for Constitutional limited government.  Garret blogs at Sleepy G’s.

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4 comments

  1. Emmitt Langley

    I’m not sure the measures passed Sunday will inevitably move us to complete socialized medicine. The truth is there are many more Americans who love the free market than who want to be socialists. When things like this happen, a lot of them are awakened from their slumber.

    I tell you this, the November election is perhaps one of the more important ones in our nation’s history. But it’s not too late. We shall see…

  2. Garret Myhan

    I appreciate your comments and your sentiment on this topic. I am sure many citizens will base their vote on this single issue in November. Be this as it may, I don’t see Obamacare ever going away.

    I have to look at this from a logical and realistic standpoint. Consider:

    1. Even if the new Congress can manage to pass repeal legislation in 2011, it still takes a 2/3 majority in both the House and Senate to override a Presidential veto. Not even the best estimates give the GOP that much power after the 2010 election. So…

    2. That leaves us with 2012. IF the new GOP-controlled Congress can avoid angering the American people for 2 years (doubtful), there may end up being a large conservative majority in both chambers in 2013, along with a Republican in the White House. This would be the most opportune time to repeal Obamacare. Will they do it then? I don’t think so. How are you going to justify taking away “free” insurance from 20-30 million Americans? How will you tell countless poor cancer patients that they can no longer have coverage due to a pre-existing condition? They would have to be willing to commit political suicide on principle, and politicians just don’t do that.

    And look at history. The GOP hasn’t taken it upon themselves to repeal any of the other entitlement programs (Medicare/Medicaid, Social Security) that are bankrupting our nation. Why not? Because these programs are overwhelmingly popular, and so will be Obamacare. Woe to the party who messes with entitlements, other than to extend or enlarge them. This is what it means to be a welfare state.

    So Obamacare continues on past 2013 and simple economics and business principles take over. Insurance companies are businesses; they can’t survive without revenue. With the conditions these new laws place upon them, the private health insurance companies are toast. I just don’t see any logical way they can survive. Without them, there is nothing to keep the Federal government from stepping in to fill the void; the welfare addicts will have and want no other recourse.

    This, of course, is just my personal opinion. An asteroid may hit Earth tomorrow, and we won’t have to worry about any of this anymore.

  3. John S.

    G,
    I agree with your assessment that the Democrats crafted this “reform” very cleverly. Private insurance as we know it today will be destroyed, and at some point there will be universal health care. There may have been “backroom deals” and bribes aplenty in getting the bill passed but the objective was clearly laid out by Obama et al. well in advance. Many, and we all know some of these folks, simply didn’t believe Obama would really ever socialize medicine, after all in every public appearance since his election he had flippantly dismissed such allegations.
    One thing I will point out that you didn’t and perhaps you’ll disagree, is the role of the insurance companies during all of this. Early on, insurance companies, their lobby the AHIP and Karen Ignani, president of AHIP were a very active and visible part of the opposition. I believe it was sometime in September that the CBO scored a bill from the House. It was one of the few, perhaps the last, that was scored as being more that the $1T limit and would increase the deficit. At this point the AHIP responded aggressively, decrying the effect the bill would have on the insurance industry and that it would increase the deficit. Quickly and overwhelmingly the Dems, the liberal PACs, and MSM attacked the AHIP and their claims. That was the last time I saw or read anything from Ignani or the AHIP. This, one of the most powerful lobbies in Washington, silenced over the course of about 3-4 days. I encourage anyone to check opensecrets.org to see who the real insurance company shills are.

    My theory is that at this point in the debate, Obama brought the insurance companies in and made a deal. A deal so big you didn’t hear about it because it was the Holy Grail of deals. More egregious then the PHARMA deal. Certainly bigger than the AHA, AMA, and even the AARP deals. Looking back, this whole sharade was a win-win for the insurance companies. If the bill failed… nothing changed. If it passed… 30mil new premium paying customers. The insurance cos. don’t care who paying the premiums. The the subsidies paid in Federal Reserve Notes from the government are as worthless as mine. You might wonder, “Won’t not being able to deny coverage to sick people hurt them?” Probably not initially. As far as I know, I’ve not heard that we will all be paying the same amount in premiums for our mandated coverage. It stands to reason, that while someone can’t be denied a policy, that doesn’t mean they’ll be able to afford it. In the long run, it will be as you say. Costs will continue to rise, exponentially once inflation takes hold. We will be told again in about 10years that the system is again on the verge of collapse. Only this time it will be the truth. At that point socialized medicine will be their solution for the crisis they created, and the people will demand it.

    Why do I think the insurance companies would do this? Corporate greed and corruption is not new, but for the last two years, daily examples can be found on any TV, paper, or media site. The banks always come to mind for me. Obama periodically denounces the “golden parachutes” for CEOs who run their companies into the ground. Are the CEOs of these insurance companies any different. They’ll be gone in less than 10 years. They negotiate their exit when they are hired. THEY DON”T CARE what happens 3,5, or 10 years from now.

    Talk of repeal is just that – Talk. The Republicans aren’t ready to lead and haven’t shown me that deserve my vote yet. Co-opting the Tea Party is tragic not only for the Tea Party, but for the Republicans as well. It was a “fix” that was too easy.

    Sadly, the last point you make, is probably the only “solution” to this particular issue. But a complete financial collapse, really makes discussions about the economics of health care silly. I am one of those who believes it is very possible things will get much worse financially. I believe that things are likely much worse than we are told.

  4. Garret Myhan

    Great comments, John. I have often wondered what could possibly convince the private insurance lobby to preside over the death of its industry without putting up a bigger fight. Like you point out, some kind of huge deal had to have gone down in order to turn them from vocal reform opponents into a silent collaborators. They will continue to collect premiums from old customers for the next few years, as well as subsidies for millions of new customers; the amount of money they will take in boggles the mind. I agree that it must be lucrative enough NOW to make the current insurance leadership care very little about what happens LATER.

    Again, thanks for the insightful comments.

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