Economist Says Health Care Bill “Is Just Another Bailout Of The Financial System”

[girl gone mad]

http://www.nakedcapitalism.com/2009/12/guest-post-economist-says-health-care-bill-is-just-another-bailout-of-the-financial-system.html">Economist Says Health Care Bill “Is Just Another Bailout Of The Financial System”
Yves Smith, Naked Capitalism

It is obvious that many republicans oppose the proposed health care bill. But many liberals and progressives oppose it as well.

For example, economist L. Randall Wray http://neweconomicperspectives.blogspot.com/2009/10/healthcare-diversions-part-3.html">writes:

Here’s the opportunity, Wall Street’s newest and bestest gamble: there is a huge untapped market of some 50 million people who are not paying insurance premiums—and the number grows every year because employers drop coverage and people can’t afford premiums. Solution? Health insurance “reform” that requires everyone to turn over their pay to Wall Street. Can’t afford the premiums? That is OK—Uncle Sam will kick in a few hundred billion to help out the insurers. Of course, do not expect more health care or better health outcomes because that has nothing to do with “reform” … Wall Street’s insurers… see a missed opportunity. They’ll collect the extra premiums and deny the claims. This is just another bailout of the financial system, because the tens of trillions of dollars already committed are not nearly enough.

Wray points out that – with the repeal of Glass Steagall – the financial sector and the insurance businesses (the “f” and “i” in the “fire” sector) are somewhat merged.

Wray is no conservative. He is Ph.D. is Professor of Economics at the University of Missouri-Kansas City, Research Director with the Center for Full Employment and Price Stability and Senior Research Scholar at The Levy Economics Institute – which focuses on inequality in the distribution of earnings, income, and wealth.

Dr. Andrew Coates describes the bill as “a guarantee of insurance industry dominance and the continued privatization of health care in every arena.” Dr. Coates is no conservative. He is a medical doctor, a member of the Public Employees Federation, AFL-CIO, secretary of the Capital District chapter of Physicians for a National Health Program, and teaches at Albany Medical College.

And – as I have previously pointed out – progressives such as law school professor Sheldon Laskin, anti-war activist David Swanson, and Miles Mogulescu are calling the bill authoritarian and unconstitutional because the government cannot legally force people to buy private health insurance.

http://www.nakedcapitalism.com/2009/12/guest-post-economist-says-health-care-bill-is-just-another-bailout-of-the-financial-system.html">more...

The Wray piece is worth reading in its entirety at his blog, http://neweconomicperspectives.blogspot.com/2009/10/healthcare-diversions-part-3.html">Economic Perspectives from Kansas City.

[ixion]

1. yep, that's exactly what it is

and why it needs to go away.

[evan2]

2. Change "they" believe in! And HOW. n/t

[notesdev]

3. Yup yup

it's all about the financing, it has nothing to do with health care... they sucked so much money from people, people started to go bankrupt en masse, that scam ran its course, now this "reform" is the next scam they got lined up.

Having the government be your collection agent, not a bad line of business if you can get it.

[Thickasabrick]

4. K&R

[JDPriestly]

He is absolutely right. That's all this is about.

We are all hostages of Wall Street.

[Cleita]

5. Duoh! The establishment is finally starting to see through the

Kabuki theater antics.

[Warpy]

6. He's right, but it will also give 10% of the population access

to insured health care, something they haven't had.

It's better than nothing, but not by much.

We have to start electing people on the promise they will revisit this issue, folks.

[evan2]

7. Force everyone to have to BUY a place to live and that

would make MORE than 10% of the population "home" owners. Same with cars: No one allowed to drive one that's more than five
years old or has 100K+ miles on it.

[Warpy]

8. What a silly post.

The buy in is the same type that safe drivers who have never had a moving violation or accident are "forced" to do for car insurance. It means that young, healthy people will have to buy a policy at a reasonably low cost in order to spread the pool of insured widely enough to afford to cover people who are already sick.

[bvar22]

12. I'm SURE that the "young, healthy people"

...are going to be very happy being forced to buy something they don't think they need so that Old People won't have to pay so much.
They WILL blame the Democrats.
Oh YES they will.

[Hippo_Tron]

17. Well I'm glad that I will be able to stay on my parents' plan until age 27

Although I don't plan on needing it for that long, it certainly takes a lot of the fear out of not being able to find a job right away and enables me to take a job without benefits for a period of time.

[NoUsername]

14. Yes, but there are no price controls.

Which means that anyone that develops a health problem can be slammed with premiums that they can't afford to pay and as a result, they may be forced to drop their coverage and either pay the "fine" or pony up for the "public option." As a result, the so-called "public option" could very well wind up being nothing more than a dumping ground for anyone and everyone that the private insurers see as "less then profitable" to insure. IOW, they will suck up their premiums as long as there is a profit in doing so. The second the "insured" develops any health problem that might possibly cut into corporate profits, their premiums will skyrocket and they will be forced to drop the policy and either pay the fine and go without or wind up on the more "affordable" public option. Either way, the health insurance companies win and the taxpayers lose.

OTOH, if we had a national single-payer health care plan, that would more fit the bill as far as what you are talking about re: spreading the risk. As HCR stands now, it's nothing more than a financial boon to the health insurance industry. One need only look at the recent surge in their stock prices to see that this is true.

[Hippo_Tron]

16. Speaking from experience, young and healthy people want health insurance

Because without it, routine medications and doctors visits are unaffordable and even healthy people need those. The reason they don't have it is that once they graduate from college (or high school for that matter if they don't go to college) it can be difficult to find a job in this economy.

This bill helps by raising the age that one can stay on their parents' insurance (which actually makes their parents' premiums cheaper because it lowers the risk in their group) and provides subsidies for low income people.

I'm sure there are people out there who have the money but simply choose to buy other things rather than insurance but IMO they are few and far between and the President was right when he said that mandating health insurance isn't the solution to covering more people. The reason for the mandate is not to cover people, it's to eliminate a free rider problem that will be created once you make it illegal to deny people for a pre-existing condition. People could simply wait until they have a serious illness and then buy insurance, which defeats the purpose of insurance.

[girl gone mad]

19. People can still wait until they have a serious illness to purchase insurance.

They simply choose to pay the ~$700 fine, which will be far cheaper than insurance for most people, then get insurance once they get sick.

There are too many loopholes in the bill which will allow insurers to deny pre-existing conditions, anyhow, and force people into the high-risk pool, which will most certainly be unaffordable to the vast majority.

[Little Star]

20. I don't think that pay the fine and then get insurance thing will

work for everybody. Just one hypothetical, what if person is in coma for a month? They would be destroyed before they woke up. Can just anyone pay their fine and sign them up for insurance?

[girl gone mad]

21. If people worried about that, we wouldn't have so many uninsured now.

I think many, if not most, of the people who currently are uninsured will simply pay the fine and stay uninsured. This bill does nothing to lower costs, nothing to reign in the excesses and dirty dealings of the insurers and nothing that will entice young and healthy people who aren't covered by their employers to buy a product that they've already widely judged to be defective.

[Little Star]

22. Many people work at jobs without insurance. They live

paycheck to paycheck and cannot afford to purchase insurance even with a subsidy. I'm sure they worry but have no choices.

I guess my point would simply be that having to pay a fine is nothing for our leaders to brag about. Its a tragedy. If GWB could ram through every stinking lousy thing he did, Democrats with a majority and a mandate could have done anything we wanted with HCR. It makes me sick thinking of people having to twist themselves into pretzels just to have access to health care. Democrats should have done better than this.

[amborin]

9. KNR needs more publicity!

[truedelphi]

10. As someone who has watched how hospital care has severely declined since about 1994

I have no hesitation in saying my Crystal Ball scryves that although our per capita expenditure is far greater than any other nation on earth can claim for health care, the care will decline.

Obama offered me hope at the very beginning of the summer when he stated that HCR had to be "deficit neutral." Well the only way that that could occur would be for a serious examination of all the inflated costs.

But no - it turned out that "deficit neutral" meant "cost containment," which was translated to mean: how much care would each and every one of us want or need. So once again, it is We the Consumers that are to blame, just as it was We the Consumers who bought such expensive houses and used our credit cards too often that resulted in the 500 trillion dollar derivative collapse. (or so the Talking Heads would have us believe.)

Never mind the 30 to 50% increase in health insurance premiums that many Americans saw in the last two years. Never kind that middle aged women paying $ 1,100 a month are sent home the day of their masectomy with swollen lymph glands and arms that won't work due to swelling, but told by hospital staff to do their own wound care. Never mind that people undergoing quadruple heart bypass operations aren't given meds to keep infections at bay (although such meds would only cost $ 6,000 bucks.)

It is all going to get worse, and the blame rests solely on our sold out, Corporate whores who answer to the titles of Senator, Congress person, and President.

[area51]

13. +1

[truedelphi]

11. I often insert a key sentence from the OP that has me fascinated

In my reply to help keep an OP kicked.

Cannot do it in this case - he is a superb writer and his entire piece should be required reading of all Americans.

[blue97keet]

15. Sounds just like the subprime lenders' business model

bilk the poor

[golfguru]

18. K&R n/t

[westerebus]

23. Welcome to DU.

[golfguru]

24. Thanks, happy to be here!

This site seems to have some of the most intelligent and thoughtful posters.