Health Insurers Offer to Accept All Applicants, on Condition

From yesterday’s New York Times:

The health insurance industry said Wednesday that it would support a health care overhaul requiring insurers to accept all customers, regardless of illness or disability. But in return, the industry said, Congress should require all Americans to have coverage.

The proposals were put forward by the two leading health insurance industry trade associations, America’s Health Insurance Groups and the Blue Cross and Blue Shield Association.

Entire article here

In the short run at least (we’re all Keynesians now, right?), the proposals represent a great deal for the insurance industry, as adding 57 million people to the ranks of the insured should more than cover the additional cost of claims for pre-existing conditions.

Just a few nitpicky questions:

Who will pay for this mandatory coverage for those who cannot afford it?

What will adding 57 million people to the insurance pool do at a time when the supply of doctors, nurses, hospitals etc. is flat or decreasing for some health services, e.g., OB/GYN, who are already in critically short supply in some places because of skyrocketing insurance premiums, thanks to the trial lawyers and multi-million dollar jury verdicts like this.

Unless Congress also repeals the law of supply and demand, the result of such increased demand can only lead to much higher prices and/or rationing.

A likely scenario: Insurance costs skyrocket within a couple of years — causing more people to join the ranks of those who cannot afford mandatory coverage — in turn leading to an exponential increase in rates for the shrinking group still having the means to pay for their own and other people’s healthcare.

These payers will complain until Congress is forced to impose price controls on the “greedy” insurers, who will respond by reducing benefits to a level commesurate with the artificially low prices.

Consumers will then complain until Congress regulates the entire industry to ensure consumers receive minimum standard level benefits for their money (regardless of whether or not they’re even paying for it). Insurers and providers will figure ways around the new regulations, leading to a new round of increasingly Draconian rules and penalties to fund the regulatory superstructure (on top of the higher healthcare costs).

Each step will drive more insurers and providers out of the market, further increasing the burden on those remaining in business. When the system finally collapses, some genius in Congress will declare: “See, this just proves the free market doesn’t work. We need a single payer system with free healthcare for everybody, just like they have in Cuba.”

A hospital in Placetas. Look at the mattresses.

This is the real Cuban healthcare system where regular Cuban citizens receive their great and wonderful “free” healthcare from — quite different from their Potemkin village counterparts catering exclusively to Communist party leaders and foreign visitors such as “documentary” film-maker Michael Moore.

Check out the link below for more photos of real Cuban hospitals:

The Real Cuba

Turning and turning in the widening gyre 
The falcon cannot hear the falconer; 
Things fall apart; the centre cannot hold; 
Mere anarchy is loosed upon the world, 
The blood-dimmed tide is loosed, and everywhere 
The ceremony of innocence is drowned; 
The best lack all conviction, while the worst 
Are full of passionate intensity.

Surely some revelation is at hand; 
Surely the Second Coming is at hand. 
The Second Coming! Hardly are those words out 
When a vast image out of Spiritus Mundi 
Troubles my sight: a waste of desert sand; 
A shape with lion body and the head of a man, 
A gaze blank and pitiless as the sun, 
Is moving its slow thighs, while all about it 
Wind shadows of the indignant desert birds. 
The darkness drops again but now I know 
That twenty centuries of stony sleep 
Were vexed to nightmare by a rocking cradle, 
And what rough beast, its hour come round at last, 
Slouches towards Bethlehem to be born?

— William Butler Yeats, The Second Coming

Change is coming, folks.

And it’s a hard rain’s a gonna fall.

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