Dems don't need the public option to take over health care

Rick Moran
John Hinderaker of Powerline lays out a brutally clear case for why even without the public option, Democrats will succeed in federalizing health care:

What strikes me as I read the House bill, however, is how closely it approximates socialized medicine even without the public option. The bill is classic national socialist legislation, in that it takes ostensibly private entities, the health insurance companies, and perverts them into instruments of the state, run top-down and barred from competing among themselves.Under the House bill private health insurance companies will still exist, but to what end? They will be legally prohibited from competing in any meaningful sense. They will be required to issue substantially the same coverages at substantially the same rates, changes in which must be justified to the government. They will be prohibited from underwriting insurance risks in any rational way: they must pay all bills resulting from preexisting conditions, and they will be prohibited from charging lower-risk customers lower rates.

As I wrote here, you can force insurance companies to "cover" preexisting conditions, but the resulting product is not insurance. You cannot insure against something that has already happened. It is merely a bill-paying mechanism. Likewise, the House bill prohibits insurance companies from charging premiums on any rational basis.

I think Hinderaker nails it by saying that paying our premiums under Obamacare is the same as paying a tax:

In the world that the House bill would create, the money we will pay to insurance companies won't really be insurance premiums. Insurance premiums are contractual payments which the parties voluntarily agree upon and which are based on a mutual assessment of risk. Rather, the checks we write to insurance companies will be taxes--legally compelled, at rates set by the federal government that are designed to punish some and subsidize others.

Obama has said that it will take a decade to get rid of private insurance companies. That's nonsense. They will already be gone the moment he signs this bill.


John Hinderaker of Powerline lays out a brutally clear case for why even without the public option, Democrats will succeed in federalizing health care:

What strikes me as I read the House bill, however, is how closely it approximates socialized medicine even without the public option. The bill is classic national socialist legislation, in that it takes ostensibly private entities, the health insurance companies, and perverts them into instruments of the state, run top-down and barred from competing among themselves.

Under the House bill private health insurance companies will still exist, but to what end? They will be legally prohibited from competing in any meaningful sense. They will be required to issue substantially the same coverages at substantially the same rates, changes in which must be justified to the government. They will be prohibited from underwriting insurance risks in any rational way: they must pay all bills resulting from preexisting conditions, and they will be prohibited from charging lower-risk customers lower rates.

As I wrote here, you can force insurance companies to "cover" preexisting conditions, but the resulting product is not insurance. You cannot insure against something that has already happened. It is merely a bill-paying mechanism. Likewise, the House bill prohibits insurance companies from charging premiums on any rational basis.

I think Hinderaker nails it by saying that paying our premiums under Obamacare is the same as paying a tax:

In the world that the House bill would create, the money we will pay to insurance companies won't really be insurance premiums. Insurance premiums are contractual payments which the parties voluntarily agree upon and which are based on a mutual assessment of risk. Rather, the checks we write to insurance companies will be taxes--legally compelled, at rates set by the federal government that are designed to punish some and subsidize others.

Obama has said that it will take a decade to get rid of private insurance companies. That's nonsense. They will already be gone the moment he signs this bill.